Why is small so big for Indian consumer companies?
FMCG) company, Hindustan Unilever Limited (HUL) is buying a 90.5% stake in beauty brand Minimalist for Rs 2,955 crore through secondary buyouts and primary infusion. The remaining 9.5% will be acquired from the founders — Mohit and Rahul Yadav — within two years. Started in 2018, multi-channel retailer Minimalist offers a range of skin, body and hair products.
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Another D2C beauty and personal care brand Wow Skin Science is looking for a strategic buyer with its investors seeking to exit the venture, people familiar with the matter told ET recently. While such buyouts indicate that there is a growing consolidation underway in the highly crowded D2C beauty segment, it also shows that big consumer companies are increasingly buying D2C brands. From Merico to Tata to Dabur to Emami to ITC, most of the large consumer companies, especially in FMCG and beauty and personal care segments, are bagging D2C brands, many even building their on D2C-only portfolios.
The D2C revolution
The last few years have seen a revolution in the D2C sector as e-commerce ramps up and the new generation is open to try new brands. The Indian D2C brand market is likely to more than triple in four years to reach $61.3 billion by FY27, buoyed by increased targeting by brands, hyper-personalisation, increased competition and rise in per capita earnings, a report by market intelligence firm 1Lattice and venture firm Sorin Investments said last year.
