How SUGAR COSMETICS Destroyed Its Competitors, Genius Marketing Strategy, And Business Case Study

Sugar Cosmetics Business Case Study

After working hard and clearing ITM, At the age of 23 after rejecting a package of 1 Cr, will you do the job for only 10,000 Rs? Well, similar is the story of Vineeta Singh. A girl from a small district of Gujarat took so many huge steps which you and I can’t think of. No one had ever thought that Sugar Cosmetics started on Shopify with only 2 products beating brands like Maybelline and Lakme and is now a 3000 Crs company.

Sugar Cosmetics with its 3000+ stores is creating a splash in Indian Cosmetics Market. The question is what Vineeta and her team did that a company that started only 5 years ago is defeating big brands today. And most importantly what are those powerful business lessons we can learn and implement in our business?

How Sugar Cosmetics Was Started By Shark Tank Shark Vineeta Singh?

The story starts in 2012 when an investment banking fund offers a 1 Cr package to IIM- Ahmedabad graduated Vineeta Singh. If you or I were at her place at the age of 23 then we would have happily taken that package. But Vineeta Singh didn’t do it.

Sugar Cosmetics 1st Business Strategy.

Many fewer people know but starting Sugar Cosmetics was never the first preference of shark – Vineet Singh. Her first preference was to start a Lingerie Brand. With the motive to start a lingerie brand in India through E-Commerce, Vineeta Singh pitches her idea to investors. But sadly, wherever she went she got the same answer – Why should we give funding to you, why not to someone experienced? Why will people buy from you? And this thing mentally shook Vineeta Singh.

Sugar Cosmetics 2nd Business Strategy

Then she decided that Whatever happens, now the startup would be bootstrapped. ‘I don’t want any investor’s money.’ With empty pockets and no experience, but with perseverance Vineeta Singh starts a small service company. This company provided service to other companies to check the background of their employees. They used to check the background and get money for it. At one time she was getting 1 Cr, now she used to get only 10,000 Rs per month.

The business was growing but there was one problem. The problem was Scalability. Many fewer service businesses are scalable at a large scale. And most importantly, Vineeta Singh was working but had no interest in this work. This was not her passion And from here starts Sugar Cosmetics.

Sugar Cosmetics 3rd Business Strategy

Had anyone thought that a company that hardly had 30 lacs in its bank account will shake the foundation of big brands? The question is what sugar cosmetics did that within 5 years this company’s evaluation is 3000 Crs.? When Vineeta Singh was thinking of leaving her service business At that time she identified a big gap in Indian Cosmetics Market. The gap was missing Mid Range Segment.

In 2015, you would get Maybelline and Lakme at 300 or below. And in the range of 1000 Rs and more, you would get MAC and Estee. But the segment between 300 and 1000 didn’t exist in the Indian Cosmetics Market.No brands thought to launch products in this range. Maybelline, MAC, Lakme, Revlon- all these brands whenever launched products and the products were amazing But b’coz these brands are international, so their products were launched on Global Skin Standards.

But when Vineeta Singh talked to consumers, she got one insight from many customers. The insight was that these international products didn’t suit their skin. B’coz Indian skin type is absolutely different. And then Sugar Cosmetics launched their Matte Range products.

So the makeup that girls applied used to get removed in just half a day. No durability and the product also didn’t suit their skin type. B’coz all products were made on basis of Global Skin Standards. And then Sugar Cosmetics launched their Matte Range products. These products used to suit Indian skin were durable and less expensive.

The range was such that girls could use it anywhere. And this thing skyrocketed Sugar Cosmetics sales. In cosmetics, Innovation is limited. How much can you change lipstick? And Vineeta Singh also knew this. But today as you will see then Nykaa and Sugar Cosmetics are the only two creative brands in the Indian Cosmetic market.

Do you know that in the initial year, Sugar Cosmetics only sold 100 lipsticks? You would be thinking that this brand only sold 100 lipsticks in the initial year, Then what’s so special about it that it grew with such high speed?

Sugar Cosmetics Business Case Study

Sugar Cosmetics Marketing Strategy.

Selling Psychology. Whenever someone buys a product then these 2 things are more important than other things. The 2 things are Gender and Association. Now understand this little carefully. There is a lot of difference between a boy’s and a girl’s buying psychology.

For example, if a boy goes outside with his friends for dinner Then there is a high chance that he will go to a place where they get lots of food at less prices. And the food should be eatable. That’s Enough 🥴 On the other side if a girl goes outside for dinner with her friends, In the majority of cases, they will prefer to eat where the environment and ambiance are good irrespective of the taste of the food. The look and feel should be good. They should feel safe there. Interestingly, No one is wrong. The thing is that our gender highly impacts our buying behavior.

Sugar Cosmetics Branding Business Strategy.

And not only this, be it a boy or a girl, there is one thing on which buying behavior of both depends. The thing is Self Esteem. Everyone wants to feel good about themselves. Everyone wants to become socially dominant.

In the case of boys, they feel socially dominant by earning money and having power. In the case of girls, they feel dominant by looking beautiful.I know you would be thinking that a girl can feel good by buying a 300 Rs product, Then why do they buy Sugar Cosmetics products?

Now she goes to the girl with a beautiful box, and tells her that “Ma’am, the thing in this box is not pricy as your usual makeup but it will give you a look like your usual makeup.” I guarantee you the girl will have a smile on her face. After listening to this, 90% of girls will have a smile on their faces. And sales come when there is a smile on the face.

Sugar Cosmetics 4th Business Strategy

Sugar cosmetics placed their products in the mid-range price product range. But packaged it so beautifully that it looked better than premium products. So when a lady looked at sugar cosmetic products from afar also, she used to get attracted to them. And when you get a product with beautiful packaging which is also durable and suit your skin type, Then do you think that girls will not brag about it to others? And this happened with Sugar Cosmetics.

Sugar Cosmetics 5th Business Strategy

When Lakme and other brands were spending money on celebrity endorsements. On the other side, Sugar made its customers its influencers and marketed its product on social media. And the girls who used Sugar Cosmetic products used to tell about Sugar products automatically. And so Sugar Cosmetics got free publicity. Today Sugar with its Hybrid Model i.e. Online Stores + Offline stores is beating many big brands. And b’coz of this, today their company’s evaluation is more than 3000 Crs.

By identifying market gaps and understanding consumer insights anyone can build a business from scratch. The Creator’s Code, if you had listened to this audiobook then it would be easy for you to understand business and consumers.

Business Lessons From Sugar Cosmetics Business Case Study.

And most importantly, what are those powerful business lessons we can learn and implement in our business?

1) People buy Feelings and not Products.

No one wants to buy a product. This is our misconception that we buy products. But the reality is that we don’t purchase products but the feeling associated with them. No girl buys Sugar Cosmetic’s Lipstick, Liner, or Blush. But they buy Confidence, Happiness, and Social Dominance feeling. Associate feelings with the products which you want to sell. And then see the magic.

2) A Brand is built on Consistency

Why do you buy Adidas or Nike shoes? For a logo? NO! You never buy them for a logo but ‘b’coz Adidas or Nike consistently delivers you a good quality product. So back in the mind, you know that if I buy any product from Adidas or Nike, I will get good quality for sure. Similarly, Sugar Cosmetics consistently delivered good products to their consumers in a good price range. And so their brand is a big hit today. If No Consistency then-No Growth and if No Growth then No Business.

3) The Customers can be your Best Sales People.

Hire any brilliant marketing team, and spend tons of money on bringing celebrities and making good ads. But if your product is not good then It will FAIL. Great Marketing kills a bad product faster. I Repeat! Great Marketing kills a bad product faster. On the other side if your product is good then you don’t need all these things. Your consumers will tell about your product to others. And that is also for free.

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