High-speed commerce growing 4-5 times faster than traditional e-comm channels: CEO of Mamaearth

Fast commerce is growing 4-5 times faster compared to other traditional e-commerce channels, said Mamaearth co-founder and CEO Varun Alagh Money control.

“Flash trading started to take off last year and has made its presence felt. However, it has really gained momentum and is now growing faster than mainstream platforms and is more profitable. It is growing 4-5 times faster compared to other e-commerce channels and therefore its contribution to sales has also increased,” the CEO said.

He went on to say, “She wasn’t even in the top 10 in terms of sales contribution last year. Today it is in the top five in the Internet domain and is growing the fastest.”

Alagh’s comment alludes to an industry trend where major D2C brands, including the beauty and personal care and FMCG segments, are looking to ride the rapidly rising wave of the same-day delivery trend and list their products on platforms such as Zepto, Blinkit, Swiggy Instamart and so on next.

Honasa Consumer, the parent company of Mamaearth, reported a 21 per cent jump in revenue to Rs 471 crore in March (Q4) compared to the year-ago period amid weak demand in the retail sector.

It reported its second consecutive profitable quarter at Rs 30 crore in the fourth quarter, compared with a loss of Rs 162 crore in the year-ago period. It closed FY24 with revenues of Rs 1,920 crore, up 28.6% year-on-year (Y-o-Y), and net profit of Rs 110.5 crore.

“We plan to grow at approximately 20 percent compound annual growth rate (CAGR) over the next three years and aim to improve margins by 100-150 basis points,” the CEO told analysts on May 23.

Additionally, the company plans to move from superstores to direct distributors in 50 major cities and hopes to achieve cost efficiency in this way. Quoting a NielsenIQ report, the company said it had reached 1,88,377 FMCG retail outlets in India as of March 24, claiming to have increased distribution by 34 percent year-on-year.

Currently, one third of Honas’ business comes from offline channels and the remainder from online channels. In terms of category share of revenue, Skin products account for approximately 60 percent, followed by hair products, coloring products and children’s products.

To enhance its R&D capabilities, Honasa has acquired the formulation expertise, R&D laboratory and small-scale manufacturing facility of Thane-based Cosmogenesis Cosmetics for Rs 4 crore, according to regulatory filings.

The transaction will likely be finalized within the next 4-6 weeks.