Honasa widens premium play with oral beauty bet, says quick commerce drives 10% of total revenue

Honasa Consumer, the parent of personal care brands Mamaearth and The Derma Co, said quick commerce now contributes around 10% to its total revenue, emerging as one of its fastest-growing and efficient distribution channels across its focus categories.

"Quick commerce is now about 10% of our revenues already and is the fastest-growing channel for us. From an economics perspective, it has healthy economics. For us, compared to our marketplace business, it has actually relatively healthier economics," said Varun Alagh, Chairman, CEO & Co-founder, Honasa Consumer in a post-earnings call with analysts.

The omnichannel beauty and personal care company, which has a strong presence across ecommerce and general trade, said the rise of quick commerce has helped expand access for smaller-ticket products. “While ecommerce worked well for categories with average order values above Rs 200, sub-Rs 200 products did not benefit as much. Quick commerce has created the right playground for categories under Rs 100 or Rs 200 to scale meaningfully,” Alagh told analysts.

Adding to its portfolio of emerging brands, Honasa has invested Rs 10 crore for a minority stake in oral care startup FANG, marking its entry into the premium oral beauty segment. The company said it sees oral care as the next phase of premiumisation within beauty, following the uptrend already seen in skincare and haircare.

Alagh noted that oral aesthetics will become a key part of the beauty regime over the next decade, with the segment expected to be a $700 million opportunity by 2030.

The investment adds another name to Honasa's growing cohort of young brands, which have clocked a strong 20% yoy growth in the September quarter.

Its second largest brand after Mamaearth, Derma Co has already crossed RS 750 crore in ARR, with its offline foray already bringing in Rs 100 crore.

Mamaearth, one of the earlier digital-first brands to jump on the omnichannel wagon, saw its fortunes back in green again after its inventory correction last year. The turnaround was primarily driven by the growing share of direct distributors in offline retail, currently at 80% of offline retail.

Its colour cosmetic brand Staze has also been clocking triple-digit growth, year over year, despite some initial challenges in the supply chain and product market fit.

"It's also a supply chain where there is some reliance on China supply chain for packaging, and in some cases conversion perspective.So that's been a learning curve in itself. But now we are feeling far more confident in terms of being around the better end of that learning curve," added Alagh.

The company also flagged revenue impact from a new Flipkart Group settlement process. Flipkart now deducts logistics and fulfillment costs directly from revenue, reducing revenue recognition but not profitability. The change has led to a Rs 28 crore reduction in reported revenue for Q2, but no impact on profits.

On a consolidated basis, post-adjustments, the company clocked Rs 566 crore in operating revenue Q2, up 22.5% from last year. During the same period, it clocked a profit after tax to the tune of Rs 39 crore, against a loss of Rs 18.5 crore in the previous year.