L Catterton Eyes Cosmetics, Toiletries Market in India With Sugar Cosmetics Investment

On the heels of Sugar Cosmetics’ closure of a $50 million Series D funding led by the Asia fund of L Catterton—partly-owned by luxury house LVMH—the India-based omnichannel beauty startup will leverage the value-creation and international brand-building expertise of LVMH and L Catteron to fuel the next phase of its business expansion.  

 

“LVMH invested in Sugar Cosmetics owing to the startup’s product development capabilities, stellar growth in both online and offline retail within a short span of its inception, and good operating metrics,” said Bobby Verghese, consumer analyst at GlobalData. 

 

Sugar Cosmetics reportedly has a network of 40,000 retail outlets across 550 Indian cities. The move comes as the Indian cosmetics and toiletries market is at an inflection point. 

 

The market expanded by 5.6% CAGR during 2015-2020, with value sales rising from $11.1 billion in 2015 to $14.6 billion in 2020, when the Covid-19 pandemic began. With pandemic-imposed restrictions gradually easing, GlobalData forecasts the cosmetics and toiletries sales in India to grow by 7.2% CAGR over 2020-2025 to reach $20.6 billion by 2025.

 

Despite being a niche distribution channel, e-retailing gained popularity during the Covid-19 pandemic and is projected to outpace all other channels, expanding by 13.8% CAGR over 2020-2026. This is reflective in GlobalData’s Q4 2021 consumer survey (published in December 2021 with 495 respondents) wherein 38% consumers said they typically purchased beauty and grooming products from supermarket/retailer websites. 

 

According to Verghese, Sugar Cosmetics and Nykaa are well-positioned to tap the fast-paced growth in online beauty retail through their mastery of the omnichannel distribution model.