Quitting their lucrative jobs in the US, these sisters returned to India to start in the D2C beauty space

In 2012, Grishma Teli and Mauli Teli were working in the US as professionals in biotech research and management consulting respectively. However, they felt that something was amiss. So, they decided to quit their jobs and move back to their hometown–Ahmedabad–to try their hand at entrepreneurship. 

Hailing from a business family with a background in pharmaceuticals and wellness, the duo realised that they had a common interest in the personal care and cosmetics space, which also happened to be an exciting, high growth industry in India. 

“But with the market dominated by large players, we needed to identify a unique space that would help us tap into the opportunity that was ‘unmet’ to enable easier entry. The space needed to be large enough to be commercially viable, sustainable, and with high growth potential, i.e. not a ‘fad’, which is very common in the beauty space,” Mauli tells HerStory. 

After doing the primary and secondary study of the market, the duo realised that the Halal cosmetics space was a large niche within the beauty sector. Many Muslim women experienced restrictions and guilt in the pursuit of beauty due to the unavailability of Halal-certified cosmetics and personal care. Realising that the opportunity was ripe to be tapped, Mauli and Grishma founded IBA Cosmetics after two years of research and ideation. 

“We launched in 2014 with two exclusive stores in Ahmedabad, and a presence on Amazon with a range of 60+ products across skincare, haircare, makeup, and fragrances. All Iba products are free of alcohol, pig fat, and other animal-derived ingredients, harsh chemicals such as sulfates and parabens, and certified by PETA as vegan and cruelty-free, along with being Halal-certified,” says Mauli. 

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Why Iba?

Iba operates on a simple motto – ‘what makes us beautiful must also be beautiful!’ The cosmetics brand aims to democratise the pursuit of beauty for everyone by making clean and ethical consumption of beauty products accessible to all. 

The founders say that the word ‘Iba’ means self-respect and the brand aims to enable that for its customers by offering them ethical product choices. Today, Iba Cosmetics has taken the D2C route by selling online through its website, on major ecommerce marketplaces, and through 2,000+ retail outlets in general trade, catering to around two to three lakh customers monthly. 

Mauli explains that the market size for Halal cosmetics globally is estimated to be $39 billion, and is growing rapidly, with the India opportunity itself pegged at Rs 11,500 crore. According to a report by Mordor Intelligence, the global Halal cosmetics market is projected to grow at a CAGR of 9.6 percent between 2020-2025. In addition, Halal cosmetics are gaining traction beyond the core demographics of observant Muslims, thanks to the shift to vegan and ethical beauty products. 

However, when the team started out, they faced challenges such as sourcing the ingredients which would meet their certification criteria, ensuring that the products are formulated such that while they remain free of animal ingredients, alcohol, and harsh chemicals, they are still equally or more efficacious. 

Also making sure that Iba meets GMP as well as Halal standards in hygiene and manufacturing which they solved by setting up their own manufacturing unit in Ahmedabad, Gujarat which is fully Halal Certified. 

“Being first to market with a unique concept, we also had to work towards raising awareness about what Halal and vegan cosmetics are and how they stand apart from others in the market in terms of being more ethical, safe and effective, thereby encouraging trials and encouraging users to switch to Iba,” says Mauli. 

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Team and manufacturing 

Today, Iba Cosmetics is a 66-member strong team that operates across all functions, including R&D, manufacturing, supply chain, marketing, and sales. 

The team started small – with Grishma and Mauli along with Chandan Nath, who is the brand mentor, making up the think tank of the business. Once they zeroed in on Halal and vegan cosmetics as the concept, they set up an in-house R&D lab and hired a couple of research scientists to work with Grishma on formulating products that met the quality, performance, and certification criteria. 

“From there on, we scaled to set up our own manufacturing unit that has pharma-grade equipment for production and packaging of skincare, haircare and makeup, and obtain Halal certification for the entire plant from India’s only government-recognised certification body – Halal India,” says Mauli. 

Market and differentiator 

An Avendus report says the country’s D2C business is going to be worth $100 billion in the next five years. India has as many as 600 D2C brands – a number that will significantly grow in the next five years, and more than 16 brands have an annual turnover of over $60 million. Some of the other startups operating in the segment include Juicy Chemistry, Mamaearth, Sugar Cosmetics, Disguise, Piligrim, Plum, etc. 

“Unlike brands that are launched to solve a specific problem, or rooted in just ingredients, Iba was born out of empathising with the struggle among a niche consumer segment to pursue beauty without ‘guilt’. The entire team at Iba lives by the credo of ‘what makes you beautiful must also be beautiful’! There is zero tolerance to include any ingredient in the formulation that’s harmful or not in line with the stringent guidelines of them being Halal, vegan, and cruelty-free, and yet deliver on efficacy,” says Mauli. 

From monthly sales of less than Rs 10 lakh in 2015, Iba now records sales of Rs 18 crore ARR (annual run rate), 80 percent of which comes by directly selling to consumers online, and through their offline channel of distributors. The founders say it generates 80 percent of the revenue by selling products directly through their own website or through marketplaces such as Amazon, Nykaa, and Flipkart. 

“With current ARR of Rs 18 crore, and a growing presence across channels, we aspire to grow this 8x in the next one to two years,” she adds. 

COVID-19 impact 

“COVID-19 certainly affected a lot of our offline operations, including at our stores and other retail outlets. However, given our strong online presence, loyal customers, and a rapid scaling up of operations through our own website, we were able to pivot to achieving more than 80 percent of our sales as a D2C online brand compared to pre-COVID-19, when more than 60 percent of our sales came through the offline channel,” says Mauli.

The remaining 20 percent comes through offline distribution through super stockists, stockists, and close to 2,000 retail outlets present across India. 

The pandemic also helped consumers get comfortable with the idea of shopping online, including for categories such as makeup. The business has adapted itself with an up-to-date website, increased visibility on ecommerce platforms like Nykaa, Amazon, Flipkart, Myntra, etc, offers flexible payment options including COD, and uses social media influencers as advocates of the brand to build credibility, recall, and announce launches, upgrades, and offers. 

Iba says its gross margins are upwards of 60 percent, and the brand is now working to reach 65 percent in the next eight to 10 months by reducing per unit overheads while increasing sales. The company is funded by existing investors Gujarat Venture Finance Limited (GVFL) and Addvantis Enterprises, LLP. 

Iba’s immediate plan is to further expand its presence within India by catering to a growing consumer base, mainly through the D2C route. They also plan to expand their range of products and fill certain gaps within the portfolio, especially in makeup. 

“The global Halal cosmetics and clean beauty market is also rapidly on the rise and we aim to enter a few key markets such as GCC and South East Asia in the coming years with a goal to grow Iba into a category leader within this space,” Mauli signs off.

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