How to build a Perfume Brand in India | Startup | Sarthak Ahuja

This is how one makes a new perfume business profitable in India.
There are mainly 3 types of notes: Fresh, Citrus and Woody.
Woody notes tend to last almost twice as much as the other ones, and thus tend to sell more in India.
This is also evidenced by data from a perfume D2C brand, @house_of_em5 , whose best selling product is Nomade Unisex, again a woody scent.
The business started in July 2022 and crossed Rs 1 crore of monthly sales by Aug 2023.
About +40% its sales come from its own website and a little over 60L from marketplaces
Now, while there’s a lot of competition in the price category of Rs 500-700, EM5’s perfumes are priced at Rs 899 and the average order value is Rs ~1200
While Gross Margins in this category are about 70%…
Shipping takes between 11-15% and the rest goes into Customer Acquisition Cost (CAC)
The reason the business makes a profit is because of high repeat rates of over 35% - that’s where CAC comes down and a margin is made.
They also tend to advertise their solid wax based perfumes a lot, which acts as a differentiator to attract customers to the website.
Now, other ways to make a margin are vertical integration. The business procures raw material from European factories, but manufactures the final scent in house, which saves costs of outsourcing to a contract manufacturer.
The business started with a capex of about Rs 25L
The largest players in the world are IFF (American), Givaudan (Swiss), Firmenich (Swiss), MANE (French)
Most customer orders are seen from Delhi, Mum, Bangalore, Hyderabad, Pune... and then from Ahmedabad, Chennai, Kolkata, Lucknow, Jaipur and Indore
I’ve received this data because I’ve done consulting for the business, and am posting this with their permission.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.

[@PankajDoharey]

WoW undervalued channel.

[@Sigmaalphab]

I think you are in switzerland

[@muhadeez]

Great Explanation Bro 👍

[@Isudhanshu_biswas]

My friend use My made nomade and EM5 nomad and he said it's useless in front of my Nomad.

[@nikhilkhamkar4589]

Amazing. But you said you will give some places or companies in Europe from where we can outsource raw materials ? Can you please help with that ? Grateful 🙏 😊

[@sniperace393]

Someone teach him how to edit a video and audio what's with the flickering and windy audio we don't care about the shoot location you could give the best content but if its distracting what's the point

[@funoonfragrances]

Are you sure they don't even hy 300 followers on Facebook

[@mukulsharma3212]

Ignorance is bliss.