Esme is excited about the cosmetics brand Blue Heaven

Samara Capital had in 2019 bought majority stake in two Delhi-based fast moving consumer goods firms, Blue Heaven Cosmetics Pvt Ltd and Nature Essence Pvt. Ltd, with an aim to build a mass-market personal care platform on a large scale. Samara later created Esme which includes the two acquired businesses.

Blue Heaven, the larger of the two, sells a range of color cosmetics such as kajal, lip colour, foundation sticks, compact powders; Nature’s essence has little catering for the salon.

“In this financial year, Blue Heaven will be a 300 crore brand; we acquired for 140 crores in 2019. So, despite Covid-19, we more than doubled the business. I believe in a five-year horizon, Blue Heave has the opportunity to be a 1,000 crore brand, said Amit Chopra, CEO and MD, Esme Consumer. The penetration of makeup in India is still very low.

India’s beauty and personal care market has exploded in recent years, driven by consumer awareness and wide availability of products. E-commerce sites have further increased the demand for such products.

Motilal Oswal Financial Services Ltd. estimates show the country’s beauty and personal care market is set to reach 2 trillion by 2025.

However, India still remains a value market. Chopra points out that the company’s target consumer could be anywhere between 200-300 million individuals. These can be first time makeup consumers who want to experiment with affordable brands and try different formats.

Large existing players already dominate the market with brands such as Hindustan Unilever Limited’s Lakme and L’Oréal’s Maybelline. These brands have also moved to premiumize their portfolio to reach consumers demanding a wider variety of products and formats. With multinational companies serving the high end of the market, Chopra said that an affordable play in the beauty and personal care space, was an opportunity that had to be tapped.

“In 2018, while everyone was talking about premiumisation; We found that consumers in ‘Bharat’ i.e. Tier Two, Tier Three India (and SEC B and C) were growing big time, especially women. Literacy was on the rise, social media was exploding, women had access to a variety of content through social media platforms such as Facebook and Instagram etc. So, it was our belief that the beauty and personal care category would grow, and within that, the bottom end of the consumer would grow even more dramatically,” he said.

For example, a Blue Heaven lipstick costs 165; Maybelline Lipsticks starting from Rs.329 599 and more. American brand MAC sells lipstick in India for Rs 1950.

Chopra said in-house manufacturing capabilities including an R&D center as well as tie-ups with local vendors for packaging help keep manufacturing costs down.

Meanwhile, the company is looking at expanding the categories as well as improving the geographical spread of the brand. Currently the populous states of Bihar and Uttar Pradesh are among the top blue haven markets. The main focus going forward will be on increasing penetration in the southern markets.

It recently created another blue haven and attempted to upgrade consumers to emerging categories like cheek tints, primers and brow gels. “The ranges we are in are still few. We believe that increasing penetration and getting more people to consume our products will continue to be the cornerstone of how Blue Heaven or Nature’s Essence will grow. This will require innovations to improve accessibility and harness digital influencers,” he said.

Meanwhile, ESME Group’s revenue grew 332.4 cr in FY22 as against Rs248.15 cr in FY21. The company has a substantial market share in Tier 1 and Tier 2 cities, mainly in the North and East regions. According to a report by India Ratings & Research, ESME is planning to diversify its geographical presence in South and West through its distribution channels.