The Parent Company of Beauty Brand Mamaearth Saw Revenue Contribution from its direction directed instructions 533 Crore.
While Honasa’s Fourth-Quarter Profit Fell 17% from a year earlier to 25 Crore, its distribution model reacted more than 100,000 distributors in 2024-25, Doubling in one year.
“All of this has had a happy decision of the direction different transition that we have done. Varun alagh, co-founder and Chief Executive of Honasa, Said during a post-earnings call with analysts last month.
Mamaearth’s distribution model transition was complete, he added.
Also read | Why mamaearth needs to review its offline distribution strategy
However, the process, which stretched for about a year, Proved cumbersome for some distributors, especially there, with piles of unsold products in tier-2 and 3 records with Slowly.
“My Ties with Mamaearth Ended About Four months ago But the process went on for very long.
A distributor in gurugram, who stopped work with honasa lat last year, said the company tried to make the process as easy as possible but the scale of the shift “I work with large consumer companies so I know the kind of effort it takes to do something like this in offline distribution.
According to Industry Experts, Honasa Needs to Continue Working on Its Relationships With Distributors, Especially that Reporting Excessive Inventory and Delays in replacing in replacing and delays Stock.
“Offline distribution is not child’s play, especially for a consumer-facing brand,” said satish meena, Advisor at Market Research Firm Datum Datum Intelligence. “To Reach Scale and Efficiency, IT’s Important to Develop Long-Term Relationships with Distributors, Including those you no longer do business with.”
Also read | Darling to Doubtful: The Story of Honasa’s Struggles
Honasa’s Painful Path
Alagh Had Warned of Such Challenges very early on. In May Last Year, Alagh Said the company’s Revenue would be impacted in the short term as it worked on improving its processes across the value chain.
Mamaearth’s earlier distribution strategy involved super stockets, a set of intermediaryies who would distrute products sources sourced from the company to Sub-Stocksts and search. However, alagh said in may last year that dealing with super stockists had resulted in poor-Quality Sales and a Lack of Data.
So under ‘Project Neev’, Honasa Shifted to a Direct Distribution Model Seeking More Control. The project’s implementation, however, cost the company nearly 70 Crore in July-September, Leading to a Quarterly Loss of 18.5 Crore.
On the plus side, the distribution overhaul is said to have helped honasa scale up its youth brands.
In the March Quarter, Honasa’s The Derma Co Brand Touched 100 Crore in Annualized Revenue Rate (ARR) – Annual Projection Based on Current Revenues – In Offline Trade, Which Includes General and Modern Trade.
“This is a healthy sign that the distribution system is alive to distribute more brands, as well as (that) the brand is seeing traction in offline, and that will also also become for the levers of all Years, “alagh said last month.
Also read | Honasa to cut inventory holding period for mamaearth distributors by streamlining supply chain
Mamaearth’s products are priced lower than the derma co’s as these target different needs. Mamaearth’s face washes, shampoos, etc., are meant for daily use while the derma co focuses on special ingredients for skincare.
The derma co has in fact trotted ahead of honasa’s flagship brand mamaearth in the offline journey, creating a pipeline for its peers, inclooming aqualogica and Dr SHEthL According to meena of datum intelligence.
“Mamaearth is banking on its offline strategy, but it’s not going to be easy. Scenario for the Derma Co, where its usp of active ingredients have created Decent Recall Amg Consures, “said meena.
Also read | Honasa Denies Distributors’ Claims of Unsold Stock, Says Secondary Dues have been cleared
An ambitious target
The Direct Distribution Model is Followed Largely By Well-Consuced Consumer Goods Companies Including Hindustan Unilever Ltd and ITC LTD. Striking Valuable Partnerships With Well-Connected Distributors in Different Regents of the Country have enabled these firms to solidify their presence beyond tier-1-markets.
However, even Even Even Estableized Companies have had to realign their distribution models.
“Honasa is not the first to go through this pare “In this context, it is useful to note that Several Large FMCG (Fast-Moving Consumer Goods) FIRMS HAVE GONE ThROUGH DISTRIGH DISTRIBUTION Realignment, Despite Decades of Existance.”
Alagh said last month that honasa aimed to add at least 50,000 outlets to its direct distribution or general trade channel, indicating a path for also also scaling up bblunt, the Company”s hairy care products and salon Brand, and Iten-Focused Cosmetics Range Staze.
“So we would want to see this number, which is 100,000, to get to 150,000 as we exit the next year, 12 months from now,” alagh said.
The Honasa Stock is Down Nearly 41% from its lifetime high 547 per share reached in September. On Monday, the stock inched up 0.94% on nse to close at 323.00.