New Delhi: Men’s grooming brand Ustraa pins hopes to cross Rs 130 crore revenue by this fiscal year end as it has started to expand its offline presence aggressively, Rajat Tuli, co-founder of the company shared in an exclusive interview with ETRetail. The brand said that it registered a revenue of Rs 65 crore in FY22.
Sharing about its funding, Rahul Anand, director and co-founder of the company said it raised Rs 7.5 crore from Info Edge’s subsidiary Startup Investments and raised total funds of Rs 9.3 crore from IIFL Seed Ventures Fund-II and Wipro Enterprises.
Moreover, the company said it expects to raise funds of up to USD 10 million in the upcoming months as it plans to invest in marketing and increasing manpower.
Market presence and strategies
On the company’s overall market presence, Tuli said the brand has tapped several marketplaces after the pandemic. And from its pre-pandemic presence on 4-5 online platforms, its products are now placed across 47 marketplaces.
The brand also started expanding offline significantly in the last two years and presently has over 10,000 outlets across the country in traditional general trade as well as regional modern trade. Its offline business is mostly through salons and distributors. And it expects to reach 50,000 outlets by 2023.
As part of its offline strategy, the company introduced 500 beauty advisors at different outlets to guide its consumers at the point of sale and educate them about the product.
Further, Tuli shared that the plan is to grow with an omnichannel approach. Currently, its online sales contribute 65 per cent, and offline adds remaining 35 per cent to the overall business. The startup hopes to have an equal distribution of sales across online and offline channels in the upcoming year. He also shared that the brand doesn’t plan to open its standalone stores as it’s a very high capex model.
The company did not see many ups and down in demand despite geopolitical and inflationary pressures last year. Tuli said, “While we are very cautious, we’re very optimistic about 2023.”
Investment and growth plans
Talking about investments, Tuli said, “We are big spenders on advertising, majorly on Facebook and YouTube, where we spend 25-30 per cent of our topline.” He also shared that the company invests substantial funds into research and product development.
He added, “We want to grow 100 per cent year-on-year for the next 2 years.”
Ustraa targets the 18 to 34 years segment and has a portfolio of hair care, fragrances, beard, and skin care products, touching almost every price point. Presently, it is seeing more growth in the perfumes and fragrances segments.
On profitability, Tuli said, “FMCG businesses have to be at a certain scale to become profitable, and for us, that profitability comes around the Rs 170-180 crore figure.”
Ustraa expects to reach a revenue of Rs 180 crore and become profitable towards the end of the year 2023.
Speaking of its international presence, the company said it is present in countries including Indonesia, Malaysia, Middle East and it is slowly getting into the USA through Amazon.com.
The startup has been selling in the Indonesian market for the last couple of years. During the pandemic when the Indian market was hit, the company’s exports to Indonesia continued, as Covid reached the country much later, Tuli explained.
As Indonesia remains the number two market after India, Ustraa plans to expand there through a health and beauty chain, Watsons. Post that, it plans to target other countries like Malaysia, Vietnam, Philippines, and Australia.