Mamaearth Case Study

Table of Contents

1. Key Takeaways
2. How it began
3. Mamaearth’s Business Strategy
4. Mamaearth’s Growth Problem
5. MadeSafe Certification
6. Mamaearth’s Second Strategy
7. Mom’s Psychology
8. Conclusion

Key Takeaways

Let’s take a look at the Mamaearth case study.

Founded in 2016 by Gazhal and Varun Alagh, under the company name Honasa Consumer Private Limited, entered the baby cosmetics products market with their first line of toxic-free products. The couple, found an opening in this industry as they discovered that the baby care products they came across were dangerous to infants and that there were no safe options for babies. 

They made the decision to improve the quality of their after working through nights to develop a brand and acquire the right certifications needed to create one of the first organic baby products in India.

Without business experience, an ITM degree, and crores of funding can you build a 10,000 Crs company? Seeing her child in pain, a helpless mother takes a decision. Who knew that decision would make a 10,000 Cr company? Who thought that this lady from the small town of Chandigarh, who didn’t know the B of Business, would analyze many businesses on the Indian Entrepreneurship show – Shark Tank Mamaearth, how a company that started 5 years ago is beating big brands like Dabur, Johnson & Johnson, and HUL?

What is so special about Mamaearth? And most importantly what are those powerful business lessons we can learn and implement in our business?

How it began

So the story starts in 2016 when 28-year-old Ghazal Alagh became a mom for the very first time. Most of the time when a lady becomes a mother for the first time, they are fear taking care of the child. B’coz of no experience. Ghazal Alagh’s son – Agastya was born with a special kind of skin condition. When she applied anything to his skin, he used to feel irritation and he used to start crying. Ghazal tried every company product, but nothing suited him. And seeing no escape, she shifted to foreign brands. And interestingly all foreign brands used to suit Agastya.

It was a happy thing but there was also a very big problem. The problem was many foreign baby care brands were not available in India. And they had to import these products from foreign and it was very costly. And when something is too costly how can a middle-class family afford it? And this thing pinched Ghazal. Ghazal talks and discusses this problem with her husband. Her husband used to say only one single thing – Try it yourself, and hope things change. And from here Mamaearth started

Mamearth’s Business Strategy

A product that started with only 6 products has now more than 200 products in the market. The question is how Mamaearth did this. So the answer is hidden in this chart. 

The consumer profile looks something like this:

1) Age and Gender

2) Consumer Education – How much do consumers know about the product?

3) Spending Capacity – How much consumers can spend on products?

4) Availability- Is the product available where the consumer lives or not?

Do you know what was the biggest difference between foreign baby care products and Indian products? Foreign brand products were toxin-free products. This means they didn’t include any chemical or ingredient in their product which produced toxins on the baby’s skin. Interestingly there are more than 1500 ingredients banned to use in baby care products in foreign. Unfortunately, there are no such rules and regulations in India. 

While customer profiling, Ghazal Alagh found that 95% of the people who brought baby products were Moms. But Moms don’t have any proper education about which products to use on their baby’s skin and which not. They didn’t know which product is good for their baby’s skin and which is harmful. 

So to solve this problem Ghazal Alagh started talking to many baby care product manufacturers. And asked them, “Can we make baby products using toxin-free products? And everyone gave the same response – “Yes Ma’am, we can make them but no one is making it in India currently” And from here Mamaearth’s journey accelerated. 

Mamaearth’s Growth Problem

Firstly, they worked and made 6 baby care products and launched them in the market. During the initial days, they distributed them to their friends and relatives and asked for reviews. “Use these products and tell us what’s lacking in them, what things we can improve. Are these products suitable for your kids or not?” Use them and tell us, whatever may the response be, Ghazal Alagh took the feedback and made improvements. When all this was going on, the same question was asked many times. 

The question was- Why should we trust you? What’s special about you so that we buy your products? We won’t buy it. B’coz at that time Dabur, HUL, Johnson & Johnson – these brands were ruling the market. People blindly trusted the brands. Then why should they trust Mamaearth?

MadeSafe Certification

For this solution, Mamaearth collaborated with MadeSafe – a US non – profitable company. MagSafe does safety testing of healthcare and beauty products. You will get shocked to know that – Mamaearth is Asia’s first and only brand that has MadeSafe Certification. MadeSafe made the work of Mamaearth easier. But still, there was a big problem in the Indian market. 

They got MadeSafe Certification but many Moms didn’t know that the products they are using on their children are harmful. The situation was such that when Ghazal told people that my products are Sulphate free, People used to ask her – ‘What’s free with your product?’ To tackle this problem, Ghazal started educating their old customers. Most of Mamaearth’s old customers were ladies and you know how ladies are. If a lady knows about a thing that no one knows in her friend circle, She proudly shares that information. 

The things Mamaearth was telling in the market were what’s good for kids and what’s not. Many ladies didn’t know about it. When one lady used to know this, she happily shared it with her group. This thing kept increasing day by day and Mamaearth became very popular among ladies. Then Mamaearth raised some funding and then digital and influencer marketing started capturing the market. But still, the question is – Without any business experience or business background, How did Ghazal Alagh do these things?

Mamaearth’s Second Strategy

See those people who have used Mamaearth products would be knowing that -Mamaearth’s products are expensive compared to normal products. Most of Mamaearth’s products come in the premium category. The question is “How this brand is successful in a country that is price sensitive?”. The answer is Consumer Insights and Personalism. 

Now understand this carefully. If you see any beauty product ad, you would find one thing in common. The common thing is – It’s all about you. In any beauty care ad, any brand will not talk much about the product, they will always talk about you. Do you know why? B’coz Beauty care products are personalized. And so most of the ads are made to target your self-esteem or your insecurities. The question is: How this thing applies to baby care products?

Mom’s Psychology

So the answer is hidden in Mom’s Psychology. The psychology of Indian Moms is set such that they would always think about family and kids first than themselves. And due to this reason, Kid’s Horlicks is hit and Women’s Horlicks failed. Ghazal collected more than 700 ladies’ consumer insights, took feedback, made improvements, and kept going. They introduced such products in the market that Moms can trust blindly. 

When Mamaearth made products based on these consumer insights a message was sent in the market that we are also a part of this product, and our say is there in this product. And then sales of Mamaearth skyrocketed. And ladies didn’t care about cost, either more expensive than normal products or not. Many people still think that you need lots of money to start a business. 

Conclusion 

And most importantly, What are those powerful business lessons we can learn and implement in our business? Be Everywhere and make Profits, Go as far as you can go for profits. Mamaearth is a premium brand whose profit margin varies between 60 – 65% and so it’s a profitable startup. Mamaearth is a D2C brand. They started it by selling online but today they have partnerships with more than 3000 retailers. So they are digital as well as make their presence offline, so they don’t miss any customers. 

Mamaearth started with 6 baby care products and today Mamaearth sells more than 200 products. And shockingly there 20% of the sale is from baby care products. There 80% of sales come from personal care products, not baby care. Mamaearth launched beauty care products for not only kids but for moms, dads, and teenagers. 

And due to this reason, Mamaearth become a 10,000 Crs company. Who thought that 2 people who used to sell meats on scooty will build a company of more than 10,000 Crs within 5 years?

By Splash Media