‘SUGAR Cosmetics to double its marketing budget in FY24’

D2C beauty brand SUGAR Cosmetics reported a 70 per cent growth in FY22 sales. In the current fiscal, it has logged in over 90 per cent growth. And to continue this momentum, the brand has planned to double its marketing budget in FY24, CBO Suchit Sikaria said in an exclusive chat with e4m.

“Our expectations are to see the revenue grow two-fold in FY24. We aspire for 70-90% growth in the next fiscal. To achieve that, our overall marketing budget may go double in the coming fiscal year,” Sikaria said.

As per media reports, SUGAR posted Rs 222 crore of operating revenue during the fiscal year ending March 2022, a nearly 75% increase compared to FY21.

Digital AdEx share

Fintech occupies 10 per cent of SUGAR’s digital AdEx, said Sikaria. “The AdEx on fintech should go up in the future in terms of percentage as this platform is more controllable and dynamic and this cost is pretty comparable to other platforms (Google and Meta),” he noted.

As per Sikaria, the brand’s biggest advantage is that it spends on marketing on fintech platforms and that no one channel has the ability to scale up and return consistently.

“Each platform has a threshold. You have to leverage all platforms according to your needs and changing consumer dynamics. Marketing is primarily a balancing act.”
Asked how much the company spends on Google, Meta and other platforms, Sikaria said: “I may not be able to share the numbers, but proportion wise Google and Meta get about 40 and 40 per cent shares in digital AdEx, respectively. Fintech platforms get 10 per cent of the company’s digital AdEx, the rest 10 per cent is spent on other channels.” The company spends a sizable amount of AdEx on telecom operators and its own eCommerce channel as well, he added.

All three platforms deliver almost similar ROIs, he further said.

On fintech apps, the company’s marketing strategy revolves around discounts, coupons and prizes. “We recently launched two jackpots on PayTm. Over 70 per cent of the participants in the jackpots were new customers. Surprisingly, some of the winners of our make-up kits were men,” he quipped.

Asked how the company is utilizing the fintech platform's data for personalization, Sakaria explained, “We try to understand our consumers based on their transaction data on fintech apps. Then the offers are launched based on consumer cohorts and their demographic profiles.”

TV for overall branding

Sharing insights on being an omnichannel brand with a presence in traditional and modern trade, he said: “We have our own retail stores and an eCommerce channel as well. A sizable portion of our marketing budget goes to TV, mainly to represent the brand overall, not for D2C revenue.”

“As long as you get the ROI, you continue to invest in advertising and promotion. Instead of long-term investments, we have planned to spend in phases by figuring out what works and what does not for our products,” Sikaria explains.