SUGAR Cosmetics’ FY22 Loss Rises 255% Due To Advertising Expenses
SUGAR Cosmetics is one of the leading beauty ecommerce startups. Due to its 2.8x rising advertising & promotional expenses, its losses jumped to 255%.
Vellvette Lifestyle’s digital-first beauty e-commerce company SUGAR Cosmetics reported a widening in its loss to ₹75 Cr in the financial years 2021-2022 (FY22), from ₹ 21.1 Cro in the previous fiscal year despite a rise of its sales.
SUGAR Cosmetics had been able to reduce its year-on-year loss (YoY), in FY21. It was hampered by a significant increase in advertising and promotion expenses that slowed the company’s momentum.
The startup posted a 255% YoY increase in its losses despite posting nearly a 75% rise in operating revenues – from the sale of cosmetic and beauty products – to ₹ 221.1 Cro in FY22. In FY21, the figure was ₹ 126.4 Cr.
The startup was founded in 2015. It offers a variety of beauty products, including skincare and makeup. SUGAR Cosmetics began as a D2C brand in 2015. In 2017, the company adopted an omnichannel strategy.
Vineeta and Kaushik Mukherjee have led SUGAR Cosmetics in forming partnerships with a number of stores across India and opening over 45K retail outlets. It also sells products on online marketplaces like Amazon, Flipkart and Nykaa.
Although the startup has an international presence it still earns most of its revenue in India.
SUGAR Cosmetics’ total operating revenue in FY22 was ₹ 210.9 Cro from India, compared to ₹ 117.6 Cro in FY21. India was responsible for more than 95% of its total operations revenue.
The rest of the world contributed ₹ 10.2 Cr to the company’s total operating revenue for FY22, an increase over 16% YoY. SUGAR Cosmetics extended its offline presence in Russia in 2019. The brand has also established an online presence in the United States.
The startup’s aggressive expansion in India and overseas came at the expense of significant increases in its expenses. SUGAR Cosmetics’ total expenditures doubled to ₹ 298.9 Cr in FY22, from ₹ 148.9 Cro in FY21.
Advertising and promotion expenses rose by 2.8X to ₹ 96.6 Cr in FY22, compared with ₹ 34.4 Cr for FY21.