MPW 2022: How Ghazal Alagh turned Mamaearth into a D2C force to reckon with

Ghazal Alagh became an entrepreneur when she couldn’t find toxin-free baby products for her son. A mother’s desperation combined with a clear whitespace in the domestic babycare market prompted her (and her husband Varun Alagh) to start Mamaearth.   

It was in 2016, when direct-to-consumer (D2C) was yet to become a catchphrase, that Mamaearth launched six baby products. Two years on, it expanded into categories like skincare and haircare, which today account for 80 per cent of its sales, according to a Jefferies report.

Alagh says Mamaearth set out to make “just baby products”. But continuously listening to consumers helped it gauge millennial mothers, who wanted toxin-free products for themselves, too. “Suddenly, from operating in babycare, which was fairly small, we started playing in FMCG (fast-moving consumer goods) and beauty & personal care, which was 10x larger,” she says.

“Starting up requires you to change very, very often. That openness and willingness to change was a major growth driver for us,” says Alagh, who debuts on the Business Today Most Powerful Women in Business list this year.

Today, Mamaearth services over 5 million customers in 500-odd cities. Last year, it became a unicorn (it is currently valued at $1.2 billion) and also turned a profit (Rs 14 crore) for the first time. By 2022-end, Mamaearth parent Honasa Consumer (which also houses brands like The Derma Co, Aqualogica, Ayuga, BBlunt, Dr Sheth’s, and Momspresso) filed for an IPO; it is looking to raise Rs 400 crore.

It has been a long journey, says Alagh, but made easier by “small milestones” along the way. “When the larger goal seems unachievable, the smaller milestones make it really easy,” she says. Alagh identifies Covid-19 as a major inflection point in the business. After the initial chaos and uncertainty, Mamaearth went all out in its marketing efforts to gain significant market share. “From an outcome perspective, we grew the most during Covid-19,” she says. “And it changed our perspective on difficult situations. We went aggressive, built new categories, and launched some of our largest-selling products during Covid-19.” Mamaearth’s revenues grew 8x between FY20 and FY22, buoyed by pandemic-induced tailwinds in e-commerce. Jefferies estimates that it could become a Rs 2,000-crore brand by FY24.

As Co-founder and Chief Innovation Officer, Alagh continues to be laser-focussed on product innovation, sampling “each product from each batch” before it goes out in the market. “As founders, you end up doing everything in the initial five to six months of your start-up. It takes a lot of effort to step back and say ‘I have to let this go’. But, in the last three years, I’m trying [to delegate],” she says, “At a product level, I am still very hands-on, but at an execution level, I have taken a step back.”

Alagh is also an active angel investor, backing young start-ups primarily led by women. “It’s not just the money we put in, but it’s the value-add we’re able to bring because of having done that,” she says.

@mittermaniac