MUMBAI: This is one minnow who does not fear the whales. Nor the fierce competition in the ugly, competitive world of beauty and personal care products dominated by large players such as Procter & Gamble, Hindustan Unilever, L’Oreal, and smaller hungry-to-grow D2C brands such as Nykaa, Mamaearth, Wow Skin Science. Two-year old Bengaluru-based D2C startup Baypure Lifestyle has been charging into this segment, first online and now into the physical retail space. With 34-35 SKUs in its cosmetics bag ranging from face, hair and body serums to face washes, lip balms under the brand name Deconstruct, it has been clocking up a monthly revenue of Rs 25-27 million per month and is on track to hit Rs 360-400 million by end 2023-24. The target is to touch Rs 1000 million by 2025, and Rs 2000 million by 2026.
“Challenger brands are here to stay. We are going to disrupt the market. I don’t think we are worried about the legacy brands; I think legacy is being redefined,” says Deconstruct founder & CEO Malini Adapureddy, who has almost 12 years of work experience with companies such as P&G, Flipkart and Kraft Heinz and also has an engineering degree and an MBA from Insead, France under her belt.
How did she chance upon the name Deconstruct for a beauty products brand?
“The idea is that we are deconstructing complex skincare products and routines into ingredient/concern-based information to help the consumer understand the purpose of the product and pick the right one to minimize their skincare concerns. Every product manufacturer says we are being transparent but no one is being totally transparent. Deconstruct products are science-based and treatment-focused to tackle acne, ageing, dryness, dandruff, oily scalps, pigmentation, lip dryness etc. Using them you can treat trivial problems without having to go to a dermatologist. They are also evidence-based, that is, we guarantee results as a marketing strategy as well as a promise,” she reveals.
That’s a promise that investors like Kalaari Capital, Flipkart’s Binny Bansal, and Beenext have bought into, pumping in $2.4 million into her venture.
Pricing wise, Deconstruct’s products are in the Rs 300 to Rs 1.900 range (for kits) and are cheaper than most premium international brands but they sell in the price range of L’Oreal’s professional product series. “We are a mass premium brand,” she says.
The products are formulations which are normally found in pharmacy outlets in Europe and have ingredients like niacinamide, hyaluronic acid, alpha alburtin, salicylic acid, potassium-azeloyl-diglycenate and alpha hydroxy acids (AHAs).
Today, 90 per cent of Deconstruct’s sales are from online marketplaces, while only 10 per cent is from offline. Adapureddy says two years from the pandemic and lockdowns, consumption has been moving from digital to physical retail. The company has plans to make a push in that direction. Already it has set up a kiosk in Bangalore’s Vega City Mall on Bannerghatta main road, and is making inroads into the Health & Glow chain in southern India, apart from other retailers.
“We expect to expand our retail presence by five or six in the next three months, but focusing on the south,” says Adapureddy. The rapid growth in physical retail by the likes of Nykaa and Reliance’s Tira Beauty is what has emboldened her to take that route.
She is sanguine Deconstruct is on a good wicket as consumer needs are evolving. “Today, serums as a category have overtaken make up in terms of sales volumes on most online marketplaces whether it’s Amazon or Nykaa,” she points out. “Also we have almost no national competition in products such as scalp, antidandruff, exfoliating serums.”
Deconstruct has contracted four manufacturers in Maharashtra (two), Puducherry (one) and one in north India to roll out 50,000 units of its 35 SKUs every month. “We develop the formulations internally, test them and then do a tech transfer keeping a check on quality with our vendor manufacturers,” explains Adapureddy.
The company spends a lot of time on research and development, testing, before releasing the products for manufacture. (However, product turnaround times are quicker than that for the multinationals which can take up to 36 months to relaunch a product.) A large part of the team of 35 is focused on sales, marketing, and penetrating new markets. That is expected to balloon with the company making a retail push.
“We are having a good revenue run rate, our burn rate is also under control. We have 18 months of our capital raise runway left and our gross margins are healthy. I am pretty gung ho about our future,” she elucidates.
One of the reasons why the company’s burn rate is low relates to the fact that it has not resorted to any large scale print or TV ad spends like many other start ups tend to do. All of Deconstruct’s ad dollars are targeted on Amazon, Google and Meta ecosystems. “We put out a lot of educative ad content but in a manner that appeals to our targeted consumers,” she says. “Amongst these are movie memes around nostalgic pop culture films, which our audiences find quirky.”
Adapureddy admits that the biggest challenge she faces is whether the company can continue to innovate. “We have to be continuously innovative in our ad spends, in products by entering those white niche spaces before anyone gets in. We also need to be agile, continue to have that fire. Deconstruct is building for the knowledge economy what Unilever built for the aspirational economy.”
With high aspirations like that, Adapureddy and Deconstruct could well construct a good growth storyline and script for the consumer, themselves and their investors.
