The derma space in India is witnessing rapid evolution, particularly post-COVID-19, as consumers become more conscious of their skincare and wellness needs. Akshat Malik, founder of Lukewarm, offers a deep dive into this burgeoning market and reveals ambitious plans for his brand.
“Until COVID-19, the Indian market wasn’t particularly conscious about skin types or ingredients. However, 2021 saw a surge in awareness, with many new brands entering the scene,” says Malik. He adds, “Globally, about 20% of the population is becoming more mindful of what they put into their bodies and onto their skin, but India still has a long way to go.”
Lukewarm, a sister concern of ClickOnCare, focuses on the Cosmeceutical, Nutraceutical and Dermaceuticals segments, primarily targeting the conscious 20% of the population. “Our focus has been on category building along with retailers and emerging brands rather than relying solely on organic demand,” Malik explains.
Social media impacts consumer behaviour
So far, the decade old brand has served over 60 lakh customers, and their avg order value is somewhere between INR 3000-3200. The rise of social media influencers has played a pivotal role in the market’s growth. However, Malik notes a shift in consumer behavior: “People are becoming more skeptical of influencers and are now looking towards founders for genuine insights. This change is driving brands to shift from user-generated content to founder-based content.”
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Malik emphasizes the importance of patience and trust in skincare routines, a principle Lukewarm upholds through its assisted sales model. “60% of our sales come from skincare specialists who guide customers directly, ensuring they give ample time for products to work before switching to new ones. And 40% is organic,” he says.
Competition & formula to success
Despite the competition, Malik remains optimistic. “A lot of players are doing what we have done in the past, which only helps expand the market. The key is to maintain customer stickiness and increase average order values,” he states.
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He reveals one more secret on how his bootstrapped companies are successful despite competition. “Our success lies in adhering to one core principle: discounting doesn’t build sustainable growth. When consumers think of sales and festive seasons, they often expect discounts. However, this is something Lukewarm and ClickOnCare never engage in. We’ve observed brands that initially grew by offering hefty discounts see their average order value plummet from INR 5,000-6,000 to as low as INR 400-500, leading to their eventual disappearance from the market. This experience has reinforced our strategy to prioritize steady and strong growth over quick but unstable gains,” he explains.
Strategic plans for future
With this, Lukewarm’s strategy for the coming months is clear. “We are exploring offline channels and doctor acquisition channels to strengthen our presence. Our focus is on growing steadily rather than resorting to heavy discounting, which can damage long-term brand value,” Malik asserts.
Looking ahead, Malik reveals ambitious targets for the financial year. “For Lukewarm, we are aiming for a 5X increase in revenue, reaching an annual run rate of 3 to 4 crores. Additionally, the brand is delving into nutraceuticals in Q2 of this fiscal year. For ClickOnCare, we are targeting one and a half times our highest revenue to date,” he shares.
