Sugar Cosmetics’ Sweet Sweet Rise to the Top. A Case Study From IIM Ahmedabad

With a total market size of more than US$6 billion, India is one of the world’s largest cosmetic marketplaces. Foreign corporations dominate the Indian cosmetics sector, with the top ten players accounting for about 90% of the market. Another intriguing trend is the substantial increase expected over the next five years and the growing importance of online sales. A few cosmetic behemoths controlled the Indian beauty sector for a long time. For the customers, brick-and-mortar beauty retailers stocked up on items from these heavyweights. With the advent of e-commerce and direct-to-consumer (D2C) retailing, this scenario underwent a significant upheaval. At the same time, direct-to-consumer firms like Nykaa, Mamaearth, and Sugar Cosmetics, to mention a few, have challenged the market domination of these huge cosmetics labels. These names immediately became the go-to cosmetic brands for individuals in metros, Tier 1 and Tier 2 cities.

They were not, however, immediate successes. For a new brand to create its imprint and sustain a top position in the industry, it must embark on a road of hard work, dedication, and the correct business strategy. Sugar Cosmetics is one cosmetics firm that did everything right to build a fantastic success story for itself.

The firm is one of India’s fastest-growing luxury cosmetics conglomerates. Its net income in January 2020 was Rs 103.71 crores, but the corporation did not start from the bottom. To appreciate Sugar Cosmetics’ success story, it is necessary to understand its inception and its journey from the beginning to the end.

Starting From The Starting

Sugar Cosmetics was founded in 2012 and has been in business for 10 years. The firm began with only two items: a black matte eyeliner and a black kohl pencil. Since then, it has steadily expanded, introducing more goods and amassing about 450 stock-keeping units. So, in only a decade, Sugar has become one of India’s most well-known direct-to-consumer beauty firms.

The Founders: Kaushik Mukherjee and Vineeta Singh

Kaushik Mukherjee, Co-Founder and CEO of SUGAR Cosmetics, holds degrees from BITS Pilani and IIM Ahmedabad. He also speaks at TEDx. Kaushik runs marathons when he is not busy operating one of the country’s biggest cosmetic firms. In addition, he is an Ironman triathlete.

Vineeta Singh, Co-Founder and CEO of SUGAR Cosmetics, is an IIT Madras and IIM Ahmedabad graduate and a TEDx speaker. She competes in triathlons and ultramarathons. Vineeta was a well-known figure on the Indian business reality show Shark Tank, and she has also invested in several businesses.

The Team

Suchit Sikaria, the Chief Business Officer since July 2021, is an IIM-Ahmedabad alumnus with over 14 years of experience in sales, marketing, and business operations leadership with Performics India and Nokia India. Sikaria also comes armed with four years of startup expertise from his entrepreneurial business, Bhukkadpanti, a food startup. The Linkedin profile of Sugar Cosmetics lists a strength of 201-500 employees.

How Everything Fits Together

Before Sugar was incorporated, Kaushik was with McKinsey, and Vineeta was in the process of enhancing her skills at another firm. Although they had no plans yet to work together, they respected and acknowledged each other’s abilities. Eventually, as they both realized they were interested in various arenas: Kaushik’s in technology and Vineeta’s in product development and marketing, it fueled the decision to team up.

As Vineeta took over the conceptualization of a women’s business, Kaushik worked on an e-commerce project. Both budding entrepreneurs felt that they shared a strong bond that could handle their shared interests; that is how Sugar Cosmetic was created. Today, the company is a strong contender for the top position in the fast-growing beauty sector.

Sugar Cosmetics – Business Model

Sugar has a D2C model of business. The company uses an omnichannel approach to sell its products which means that it sells its products in various eCommerce marketplaces like Nykaa, Amazon, etc. Its sales in India and exports constitute significant revenue streams. Sugar Cosmetics has a hybrid online-offline business model with a presence in more than 10,000 sales outlets in more than 130 locations.

The company has been working on devising business strategies that can help them strengthen the client-brand relationship, especially after the pandemic. Their new business model incorporates cutting down expenses, reorganizing the team, giving the company and e-commerce boost, and utilizing social media marketing.

Key Growth Highlights of Sugar Cosmetics:

  • The traffic of more than 2 mn unique visitors each month on the company website and app
  • Sales of 200K+ products each month
  • Products in over 40K retail stores
  • A strong presence on all prominent e-commerce platforms such as Myntra, Nykaa, Amazon, Flipkart, and more
  • Sugar also sells its products in countries like Korea, Italy, Germany, and the US

The Revenue Model

The last two business years have witnessed an income growth of almost 6 times for Sugar. 100 crores in annual revenue was a feat achieved by this beauty and cosmetics brand in just ten years, a mark that was difficult even for biggies like Revlon, which did it only after 20 long years. This achievement can be attributed to Sugar’s omnichannel selling approach. Not only does the company focus on selling its products, but it also works zealously on its content marketing and app development.

FY20 saw a tremendous rise in the growth chart of Sugar Cosmetics. The company’s operations have been excited by 5.6X in the last two fiscal years, with the retail outlets growing up to 1,750 from 87, only in two and a half years. The pandemic threw a spanner in the works for most companies in almost every industry; Sugar was also affected. However, the beauty brand not only managed to stay afloat but also stayed on its success bandwagon.

Its operating income increased by 82% in FY20, a sharp increase from Rs 57.14 crore in FY19 to over Rs 103.71 crore, with overseas sales accounting for 15.4% (Rs 16 crore ) of its revenues. An additional Rs 1.4 crore was generated as revenues from its financial assets. The revenue increased to Rs 126.36 crore in FY21, with a rise of 22% in its operating income.

The company’s success is not just limited to Indian boundaries. Its bestselling goods in the Eyes, Lips, Nails, Face, and Skin categories are shipped worldwide from its state-of-the-art facilities in Italy, Germany, India, Korea, and the United States.

Making The Right Moves All The Way

The company has garnered a strong fan following among millennials. It holds a brand image that makes it a cosmetic company with a -breaking attitude. Sugar Cosmetics have emerged as the cosmetic choice for brave, independent women who are not ready to be categorized into stereotypes anymore. The beauty brand has carved a niche in the industry with its unique low-poly packaging and chart-topping products.


FAB BAG is a cosmetic subscription service and another brainchild of Kaushik Mukherjee and Vineeta Singh. It was started in 2012, and for Rs 599 every month, users get a “surprise” beauty box that includes a mix of five goods from the categories of cosmetics, fragrances, bath and body, skincare, and hair care.

SUGAR wanted a premium brand image to catapult its growth by encouraging mass consumers to upgrade themselves and luxury clients to try something less expensive. FAB BAG gave Sugar the space, place, and data they needed to figure out this target market.

  • Premium Products

SUGAR decided to develop a matte eyeliner when the beauty market was inundated with glossy eyeliners. It was a move to give the customers a product they could use daily. The product became a bestseller and helped Sugar become a customer favourite.

  • Instagram influencers

The ‘unwrapping videos’ and ‘before and after makeovers helped Sugar create awareness among people about its new products. One of their most popular videos features Anmol Rodriguez, an acid attack survivor. Today, the brand has over 2 million Instagram followers, much higher than its counterparts, such as Colorbar.

  • Presence in online stores

In 2016, SUGAR debuted on Nykaa, the beauty website. Nykaa was in a nascent stage then, with a far smaller number of businesses than it does now. Come 2017, sales from Nykaa accounted for roughly 80% of Sugar’s income. The company scaled its distribution and went to other online platforms like Flipkart and Amazon.

Success speaks for itself.

Sugar Cosmetics is a part of a case study at the IIM-A case centre, which is a testimony of their success. Founders Vineeta Singh and her husband Kaushik Mukherji, also alma mater of the top management institute of the country, are excited in the wake of this news.

The case study has been filed and posted on the Indian Institute of Management website, Ahmedabad. Kaushik Mukherji has expressed his joy through Linkedin, stating that this was something he could not have imagined even in his ‘wildest dream’.

Kaushik Mukherji said, “We first met 16 years ago in a business school. Numerous plans and strategies were developed. Some aspirations were realized during the project and our time together, while others weren’t.” The founders have expressed their gratitude toward their colleagues, beauty consultant, and researchers, who have been a part of their success journey.

This beauty startup is expecting a growth of 2X in revenues and targeting a revenue mark of Rs 300 crore in FY22. Sugar Cosmetics is here to stay and a success story that must be referred to by every retail brand.

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