this skincare company makes more than 360 crores in annual revenue and has taken India's entire beauty industry by storm in just three freaking years minimalist is a new agdc profitable startup that is on its way to disrupt India's 16,000 CR skin care Market but what makes this startup super interesting is the fact that they made 100 crores in just 8 months of inception by creating a loyal fan base all across the country so what are the interesting insights that work for minimalist and why is Beauty and personal care a super hot industry right now we'll get into that but if you're new to the channel then hello you've landed at growthx an invite only community of over 3,000 members who are product marketing and Business Leaders and also Founders from the startup ecosystem coming back to minimalist see minimalist was started by Two Brothers Mohit and Rahul yadov both of them are serial entrepreneurs who have tried their hands in entrepreneurship together more than once and had seen some ups but also some great Downs of starting up they had built and sold one kids fashion company called Mango Street back in 2012 worked at startups like cardo in senior roles to scale the company and also started a beauty and personal care brand called free well in 2017 this again by the way was interesting because they were doing something very few people were focusing on serving custom Hair Solutions as per problem of different customers this did not work out really well but help them spot a great opportunity in India's interesting Beauty and personal care market and let's get down to some context see India's BBC Market is going through a very interesting time right now India is seeing the fastest expected growth rate of 10% among all the countries that you see on the chart here and is expected to reach a $30 billion Mark by 2030 from $20 billion Mark to where it is today it's so huge that it can literally be broken down into 10 categories and minimalist could have entered any of these you have B skin care Hair Care Oil care cosmetics and so much more that you see right now but the top three categories however have been bath and shower hair care and skincare categories and Yad Brothers wanted to come after the Skin Care category first and that to in a completely unique way that had never been done before by entering the category of active ingredients which brings me to the very first Insight the Insight of category creation but what are active ingredients really in a nutshell these are the skincare chemicals like these that are used to solve specific skincare problems like wrinkles dryness smoothness Etc and minimalist was the first brand in India to go after this category and it's not as that these chemicals were not present in other products around us most of the products you and I have used have a mix of both active ingredients and inactive ingredients by the way inactive ingredients are the chemicals that are used to improve the performance of active ingredients in a particular product but selling active ingredients alone was not something any major brand was doing at the time why because these products require a certain discipline and effort on skincare from the users's end these customers are a very serious coot of users who need to follow a certain routine and might even have to apply another cream the next day if needed and they might even have to take a recommendation from a dermatologist in many cases earlier on people would buy creams only as for three criterias one is easy accessibility which means buying on the basis of known brand names like L'Oreal and Uno second buying on the basis of gimmicky claims like natural AA Etc which by the way most brands ride just for the sake of it and are using chemicals inside and third insecurity probably the reason why fairness scams have done so well in the country historically in fact fair and lovely was one of the hottest selling products for HL for quite a long time but Yad Brothers saw that Indians were transitioning rapidly and so was the need but before we discuss the transition just like all other Founders and leaders out there I'm sure that Yad Brothers also face the painful problem of building a solid growth team that drives Revenue impact Founders struggle to hire they want guidance and they have absolutely no structure to involving one of the costliest business decisions you can ever take which is why we have built the craft of building growth teams over the course of this craft you learn how to solve the five biggest problems Founders and leaders face starting with attracting bar raiser grow talent and making sure that the best are on your side second making sure that your team never has a motivation problem you learn how to prioritize whom to hire and never ever over hire again you'll get a Playbook to filter talent that actually performs on the job and not just in interviews and finally ensure that your hires are creating impact without the need of handholding by the way Global giants like Facebook slack Uber and even Indian disruptors like Razer Bay Flipkart and zomato have been known for building massively impactful growth teams now you can build yours too the link to check out the craft is in the description and of course it's part of the growthx membership coming back to the transition c as India's disposable income rle was in the last decade more people wanted to upgrade in their life in fact India's middle class that is the people who earn somewhere between 5 to 30 lakh per anom will go from 31% to 47% from 2020 to 2030 as per the research by Price 360 and each of these income classes have been decided on the basis of different annual incomes that you can see on the screen so while this progress is happening customers have started to solve problems by actually knowing what they're putting on the Skins it's pretty much similar to how we have started becoming more conscious and started reading label on packs in fact skincare has now become popular among males too minimalist went bullish on this new India by selling the scientific angle of Cosmetics along with educating customers telling the active ingredient as is in the boring medical looking packaging in fact they literally put out all the details in front of the pack for users so let's say you are buying a vitamin C serum you would also know the concentration or how powerful that particular ingredient is in the pack for context when they did this this was a successful customer Trend already in the west a Canadian brand known as theordinary founded in 2016 had already made this entire angle of talking about science and skincare popular and cool timing also helped them because L'Oreal also tried entering this category in 2016 and 17 with these two products but had to withdraw due to limited customer awareness which brings me to the next interesting Insight is how they cracked trust see in a category like this the competition is super intensive in fact in The Last 5 Years many new Brands like foxtail deconstruct Pilgrim and dermaco which is a brand by Mama by the way have also popped up even the Western giant the ordinary that we talked about has entered into India the game is intensifying everyone is super bullish on India's Beauty and personal care so much so that out of $1.4 billion flown into d2c brands in India between 2014 to 2020 54% of that went to beauty and fashion segment so now customers have lot of choices so the only mode a company has in the long run is to crack repeat rates from the loyal customers this is where minimalist has done a really great job because they have cracked a high repeat rate of 60% for this they have actually CED the insane product depth how well while most of the DTC Brands including Mama Earth even rely on third party manufacturers they have taken the high kex call of moving the production in-house this vertical integration again has taken a hit on the balance sheet since they need to own plants and machines but they have done this since they are very confident of their product and want to control control everything so well that there is no room for mistake and probably rahul's chemical engineering degree of understanding formulation must have held the brothers in fact they're planning to get another plant in jaur that will take their capacity five times of what it is today this High Capital part is probably also the part where funding they receive from seoa and uni Ventures must have helped them this same philosophy of quality also applies to their sourcing their sourcing means 40% to 50% more expensive than most Beauty Brands out there this makes their cost of good sold which is the cost of obtaining raw materials more expensive but this is a deliberate strategy they took because they want to invest high amount in making sure that the product is good so they don't have to invest more in selling the product the idea is simple nail the product with the highest quality invest in making the product and sacrificing gross margin generate aggressively happy customers who will do a lot of Word of Mouth for you spend less on marketing and make a highly profitable business in long run so while most brands in the category spend 40 to 50% of marketing they just spend around 25% and just imagine it right you hear a great review of minimalist from your friend you later saw the ad on Instagram and you want to start taking your skincare seriously you would definitely at least consider checking the brand out this positive sentiment makes the kex investment way better than High Performance Marketing expenses also they've done a stellar job on educating customers on their website which again has made their customers fall in love with them they make sure that customers are educated and remove the intimidation factor from this complic liated skincare but while all this sols a great product and building trust with the consumer you also have to Sol for Access which brings me to the next Insight of access look you can have the best product in the world but it still might not work out if you don't know what customer segment or channels you're going after minimalist has done both very interestingly on the customer segmentation they have made their products affordable for context their bestselling products range from 200 to 600 rupes for better understanding we even took a list of about 10 10 to 15 Brands and compared them on the basis of price of one single product and this is the pyramid that we got and you can see that minimalist is coming at the bottom Mass segment of this pyramid they want to become a brand that everyone can use without getting intimidated by the price too and you can tie this back to the income pyramid point that we discussed sometime back on the midle class go for a bigger market and remove the intimidation both in terms of price and information and deliver the best value for money product that India needs this can be a great inside for any new business out there that are planning to disrupt a new category altogether and on the Channel Side the interesting thing that they have cracked and are aggressively working on is going for the nony markets they don't just want to be an Indian company because they're confident that their products are at the highest International level and they also have some distinction when compared to other International brands for example few of the products that they have are very rare combination of active ingredients that even the international brand that we spoke about the does not have and vice versa and to further spread their wings into this strategy they have now penetrated three categories skin care body care and even hair care now and expanded their product range now have roughly 50 products at the moment this can be a big game changer as so far 10% of the sales are coming from the international markets they're already in UK US Gulf countries and even southeast Asia so even the 1 to10 Journey that they're going for looks very interesting and it will be great to see how things turn out for them and now you must be wondering that we did not talk about physical stores throughout the video so what's their game plan there well they have a strategy for that too they plan to open 100 ebos which are exclusive business Outlets exclusive business Outlets by the way are those stores that are owned and operated by the brand itself and are not worked as franchises they plan to open these stores next year and they're going for ebos because they don't want their products to be just another product on the shelves of big supermarkets they want to educate their customers even in the physical setting a great idea to stick with the philosophy they started with and to go with the tagline they have hide nothing so these were the three insights that the minimalist used to become a successful d2c startup that makes more than 360 crores in annual revenue if you like this video you would 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