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Saturday, October 31, 2020

A start-up offering consulting services, sales and manufacturing support

With a business and technology research After background, Vash Mishra along with his core team founded Cosmetics in 2019 with focus on personal care, home care and healthcare. In 9 months of operations, the company has already acquired clientele including Godrej, Nykaa, D-mart, Spykar, Keval Kiran Clothing (Killer and Lawman), Spykar, Wellness Forever and others.

Vash is a business and technology consultant with hands-on experience of 15 years in more than 25 countries across Europe, South America and Asia Pacific. As an engineer with an MBA from the UK, he has domain expertise in FMCG, energy, manufacturing, new technologies and start-ups mentoring.

Private labelling or PBL

This is a series of write-ups exclusively for WOOB starting with basics and eventually moving on more tangible information to make it easier for investors, business owners and decision makers to make an informed decision especially for PBL in home care, personal care and health care.

  1.  What is private labelling in the space of home, health and personal care?
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Third party manufacturing of private labelling or just PBL is outsourcing of manufacturing services mostly exercised by FMCG brand owners and start-ups. There are a few companies who chose to manufacture in-house.

The FMCG giants like HUL, ITC, P&G, Godrej, Patanjali Ayurved, Marico will exercise both the options of manufacturing in-house and outsourcing manufacturing services.

Start-ups like Sugar Cosmetics, M-caffeine, Mama Earth, Pee Safe, Sirona are notable start-ups in the space of personal care. They are known for outsourcing the manufacturing of their products controlling the formulation and quality aspects to offer good quality products at reasonable rates.

Vash Mishra
Vaince Cosmetics
  1. Private labelling business of home care, health care and personal care in India
  1. The start-up ecosystem in India has exploded in the last 10 years making it one of the largest ecosystems in the world with Bangalore and Delhi being constantly ranked in most listings. 
  2. Beauty and personal care (BPC) industry is the fastest growing segment in India according to the ministry of economy and industry and estimated to be worth $ 8 billion.
  3. India is the fastest growing market for cosmetics and estimated to grow to $ 20 billion by 2025.

3. Steps in private labelling

  1. The manufacturers or factory owners will manufacture the finished goods according to the brand owner’s requirements of formulations, fragrances, viscosity, sizes, packaging, Timelines, budget, payment terms, lead time and deadlines, etc.
  2. The specifications and formulations are discussed between the manufacturer and the brand owner. Sampling of the product helps to meet the capability and requirements.
  3. Once the samples are accepted the product is registered with the local FDA authorities and after successful approval of the product manufacturing can start anytime.

4. Benefits of private labelling in India

  1. Localisation and Make in India has given a big boost to local manufacturers.
  2. Emergence of modern trade and e-commerce in India has given a big boost to home care, personal care and healthcare.
  3. Start-ups can focus on online and offline sales of the products while the manufacturing can be outsourced to a factory saving precious time and money for the business owners.
  4. Availability of local raw material and local packaging material reduces turnaround time and ensures effective and improves consistent supply in the local market.
  5. Online sales has opened new opportunities for B2C services. Investments in creating offline distribution are no more detrimental to start a brand.
  6. People are open to price points compared to brand loyalty. Price points are one of the crucial deciding factors for Indian consumers. Brand loyalty is important in only specific segments like perfumes and not home care, personal care and health care.
  7. Covid-19 lockdown exposed the logistics challenge of goods transportation pan India. Major FMCG brands have decided to have multiple manufacturing support to avoid logistics challenges. For example, if goods can’t be supplied due to lockdown in Hyderabad, the FMCG brand can continue to alternatively supply their finished goods from factories located in Himachal and MIDC, Maharashtra. 
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