The $5 Bn direct-to-home (D2C) beauty and personal care (BPC) space in India, decked up to reach $28 Bn in the next five years, looks too tempting for investors to keep off.

The result is foretold. India’s homegrown D2C brands are rapidly scaling up their businesses and even mapping their way to the capital market. Inc42’s State Of Indian Ecommerce Report H1 2024 has found that the BPC market is growing the fastest among all the ecommerce segments in India and stays the course to corner over 7% of the overall ecommerce market by 2030.

D2C beauty brands have garnered over $1 Bn in funding between 2014 and the first half of 2024, while legacy fast-moving consumer goods (FMCG) giants like Marico, ITC, and Emami made a dash for the booming market through strategic acquisitions, leveraging the brand equity and the market presence of the fast-growing D2C players.

The latest in this league was Hindustan Unilever Ltd (HUL), which acquired skincare and personal care brand Minimalist for INR 2,670 Cr.

Minimalist established itself as a clinically backed, performance-driven skincare brand, surpassing INR 100 Cr in revenue within eight months of launch. In FY24, the four-year-old company reported a staggering 89% growth in operating revenue to INR 347.4 Cr.

With this acquisition, as per industry observers, HUL has signalled its strong intent to expand its premium skincare portfolio to address the growing demand for science-backed, problem-solving beauty solutions.

This deal is likely to pave the way for further consolidation, as FMCG players increasingly seek innovative, functional BPC brands to firm up their position in the evolving market.

However, according to Dhruv Kapoor, partner at Anicut Capital, many of these brands need a strong moat if they want to attract big investors including FMCG giants.

“This advantage will only come from factors like scientific research, R&D, and the quality of ingredients used in product development, as customers have become increasingly discerning. Also, any brand without clear differentiation may struggle to scale successfully,” Kapoor said.

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