Why D2C skincare brand Dot & Key is focusing on niche products and targeting Tier II and III markets

A enterprise thought began forming in Kolkata-based Anisha Agarwal’s head when she scoured grocery store cabinets and was unable to discover a pre-swim pores and skin cream. The avid swimmer started considering. “This was not a private drawback. I’d hear from others as properly on their incapability to supply products to guard them from the post-swim tan. The solely possibility was to use oil and nobody actually likes that,” says Anisha, Co-founder of Dot & Key, a direct-to-consumer skincare brand, run by Dot & Key Wellness Pvt. Ltd. Hailing from a enterprise household, she put her considering cap on and researched the thought for a yr earlier than deciding to do one thing about it. She and her husband, Suyash Saraf, then began working on varied products, distributed surveys and pattern products amongst buddies and household, and launched the brand after eight months.The couple, who sorted their household’s actual property enterprise, bootstrapped the sweetness brand with an funding of roughly Rs 3 crore.The Dot & Key Wellness web site went stay in 2018, with a pre-swim cream amongst 16 different products. Since then, the D2C brand has ventured into different SKUS, together with clay masks, face serums, underarm color correction cream, and sleep masks. Currently, products throughout six classes are listed on the web site. “We don’t classify our products into classes as a result of we create them relying on folks’s wants, that are normally fairly niche. Mass shoppers won’t demand a pre-swim product, however a couple of others would,” Anisha says. One of Dot & Key’s evening cream variantsIn the startKolkata-based Dot & Key started by collaborating with third-party producers to provide near 2,500 items. Currently, they promote 80,000-1 lakh items each month on their web site, and different on-line marketplaces resembling Nykaa and Amazon. Dot & Key claims to have a minimum of 5 lakh prospects at current, having grown from 15,000-20,000 prospects through the first yr of enterprise. The agency at the moment has a group of greater than 45 workers.  During the pandemic, many D2C manufacturers noticed a serious spike of their orders and revenues as folks caught at residence had no possibility however to order on-line. Sector leaders noticed improved backside strains, together with beauty brand Sugar, which noticed its highest gross sales in November 2020, and D2C child and mom care brand MamaEarth, which reached a valuation of $300 million after reaching a income run fee of Rs 700 crore. But Dot & Key, being a small enterprise, didn’t see such super development. However, items offered grew greater than 30X in three years. The brand additionally launched 12 new products in March 2020 and is working on introducing a minimum of 50 new SKUs within the subsequent six to eight months, in accordance with the founders. These products can be launched in mass classes, together with hair care, physique care, skincare, and nutraceutical dietary supplements.     Dot & Key’s vitamin C rangeAn eye on the futureAccording to Research and Markets’ Skin Care Market in India 2020 report, the skincare products market was valued at Rs 129.76 billion in 2020 and is anticipated to broaden at a compound annual development fee (CAGR) of ~8.22 p.c through the 2021-2025 interval, to achieve a worth of Rs 191.09 billion by 2025.But regardless of the expansion, greater than 90 p.c of products are nonetheless offered by means of basic and trendy retail shops. Online searching for skincare is nonetheless a nascent market in India and any brand might want to broaden its retail presence to develop past some extent. Dot & Key is additionally trying to do the identical.    Its products, which retail between Rs 395 and Rs 1,500, are thought of “barely premium for these [Tier II and III] markets”. However, the corporate plans to cut back the worth factors by launching smaller variants of current SKUs.  “One of the most important challenges for us is that any participant, with some scale available in the market, can replicate our standard products,” Suyash says. The brand, which competes with different D2C skincare manufacturers, together with Sequoia India-backed Mamaearth, Kerala-based Juicy Chemistry, and Chrys Capital-backed Wow Skin Sciences, must discover a method to maintain launching distinctive products, decrease buyer acquisition prices, and develop its buyer base. The skincare brand, which has primarily serviced shoppers in metro cities until now, is trying to appeal to consumers from Tier II and III cities by coming into 600 shops throughout 14 cities. These could be majorly by means of partnerships with trendy commerce retail shops and a couple of organised pharmacy chains.  “Selling on-line is good and we’re seeing good volumes. But if we actually need to scale our brand then we have to go into retail shops, the place folks can discover, contact, and really feel our product,” Anisha says. 

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