Svatvak bets on digital economy to tap $ 2.57 billion skin care market
As consumers turn to natural and organic products after pandemic, organic skin care market is growing rapidly
Svatvak, a skin care brand, offers preservative-free herbal products to exploit this growing opportunity
The home business leveraged social media marketing and partnered with logistics player Shiprocket to enable its D2C journey
Among the major changes seen in consumer behavior after the Covid-19 pandemic hit India in early 2020, the shift towards organic and natural products was perhaps the most significant. As the pandemic has served as an indispensable introspection tool for self-care and healthy lifestyle choices, many self-conscious and product-conscious consumers have moved away from chemicals and opted for the organic line. In addition, “vegans” and environmentalists also prefer sustainable and cruelty-free products, even at a higher cost.
In line with the âgreenâ lean, encouraged by healthcare professionals and wellness experts, the demand for organic products in the skin care segment is growing rapidly. India’s historic association with Ayurveda, the natural science of healing dating back almost 5,000 years, has further reinforced this trend and spawned a multitude of organic cosmetic brands.
Although Haridwar-based Patanjali was one of the first companies to enter this niche market in 2006, companies like Belle Vita Organics, Mamearth, Svatvak and many others have entered the space in recent years to capitalize on taken from the thrust of this category.
A look at consumer mindset and aggregate market data also validates a good opportunity for growth. According to a 2019 survey by Statista, 41.96% of Indian consumers were prepared to pay up to 25% more for organic products. In addition, the overall skin care market amounted to $ 1.74 billion in 2021 and is expected to grow at a CAGR of 8.22% to reach $ 2.57 billion by 2025, according to Allied Market Research.
What Ailed Svatvak’s Homemade Organic Skin Care Line
Started by Shashi Jain in November 2020, Svatvak is a small office / home office (SOHO) company specializing in organic skin care products. The name includes two Sanskrit words – sva (my) and tvak (skin). Jain’s family made a line of skin care and self-care products using formulas passed down from generation to generation. But sensing the growing demand for organic products, Shashi launched his brand with an emphasis on transparency and sustainability.
Svatvak is run by a team of 15 women and sources most of its ingredients from family farms in Delhi-RCN. The startup claims that all of its products are handmade and that no large machines are used in the process. Currently, it offers up to 12 products such as body butter, soap, face and hair oil, lip balm and more in the mid to high end price range. The startup is positioning itself as an organic brand, however, it has not yet been certified.
However, navigation has not been easy in a market already dominated by deep-pocketed brands (old and others) enjoying deep-rooted customer loyalty. In addition to gaining market share, the startup had its share of startup issues. For example, Svatvak initially struggled to reach its target customers when it launched amid the pandemic and lockdowns.
Also, it was difficult to get people to switch to organic handmade products as most consumers were used to using commercial high octane products. Additionally, the skincare brand did not use preservatives, which reduced the average shelf life of its products to 4 to 12 months and created inventory issues. Svatvak could only manufacture its products if it had guaranteed sales.
What Svatvak did to break down barriers to growth
Much like thousands of micro home businesses across India, the skin care brand got off to a slow start and struggled to scale offline due to lack of funds. But unlike many of these companies, Svatvak decided to go the direct-to-consumer (D2C) route to remove the usual bottlenecks.
A full-fledged website launched in November 2020, and the advertising was done on social media to create brand awareness. It also offered 200 free samples to random customers as part of its brand marketing initiative. The goal was twofold. First, it helped the brand gain product feedback for further improvements in manufacturing, packaging, and marketing. Second, the initiative sparked word of mouth and accelerated customer acquisition.
Svatvak was also keen to capitalize on the growing trend of influencer marketing and approached social media influencers to review his products. The conversations thus generated on social platforms focused on the benefits of organic skincare and the reasons why consumers should adopt it.
How D2C Facilitators Helped
Scaling wasn’t the only issue plaguing startup at this point. With more customers and higher sales generated by online and offline commerce, it faced greater logistical challenges. Initially, the company intended to use local suppliers for sales and distribution. But given the short shelf life of its products and the time the company takes to sell its inventory, Svatvak had to abandon the plan and seek a suitable alternative.
On the recommendation of a friend, Jain has teamed up with Shiprocket, a Delhi-based third-party logistics player, which has the option to ship glass containers with extra precautions. As the skin care brand only uses glass and paper packaging, the 3PL player special offer has largely solved such issues as breakage / product damage / waste and return to the home. ‘origin.
As a result, the company was able to sell throughout India, reduce COD transactions (due to increased consumer confidence in product quality and safe delivery), and increase its overall sales volume.
Today, Shiprocket is an integral part of the ecosystem that supports small and medium D2C brands and plays a key role in accelerating their growth. Also known as D2C Enablers, these players offer their own third party solutions / solutions, including platform, marketing, logistics, payments, etc. to ensure a seamless operational flow.
Essentially, enablers bring their infrastructure and domain expertise to brands that can’t afford to develop operations in-house. Besides Shiprocket, some major players in the D2C activation space include Tel Aviv-based website developer Wix, Mumbai-based marketing automation company WebEngage, Bengaluru-based payment gateway platform Razorpay and more.
The bottom line
Besides its main activities, Svatvak is committed to protecting the environment. Unsurprisingly, its packaging materials only include glass containers and paper to reduce plastic waste.
It also plans to add more products in the bath and body care categories to promote a healthy and environmentally friendly lifestyle for all consumers. Ultimately, it wishes to expand abroad and address global markets.