Honasa targets Gen Z with cosmetics label Staze

Honasa’s Expansion into Colour Cosmetics

Honasa Private Limited, headquartered in Gurugram, has built a strong presence in the Indian BPC sector primarily through its flagship brand Mamaearth. Known for its focus on skincare and natural ingredients, Mamaearth has grown rapidly to become a household name. In 2022, Honasa first ventured into the colour cosmetics category under the Mamaearth label, achieving an impressive annual recurring revenue (ARR) of over Rs 150 crore within a year.

Building on this momentum, Honasa has now introduced Staze, its seventh brand, which is dedicated exclusively to colour cosmetics. Staze targets the 18-24 age group, a segment characterized by college students and young professionals who are beginning to explore makeup products. The label offers a diverse range of products including lipsticks, kajal pens, foundations, compacts, and eyeliners, spanning eight categories with a total of 40 stock-keeping units (SKUs).

Positioning Staze in a Competitive Market

According to Honasa co-founder and CEO Varun Alagh, Staze is strategically priced to compete directly with established brands such as Maybelline (owned by L’Oréal) and Lakme (under Hindustan Unilever). The average unit price for Staze products is set between Rs 300 and Rs 350, aligning with the price points of these leading players. This pricing strategy is intended to attract young consumers who are price-sensitive yet seek quality and trendy cosmetics.

While Staze is not Honasa’s first foray into colour cosmetics, it represents a focused approach to capture the Gen Z demographic with a dedicated brand identity. Alagh emphasized that the colour cosmetics segment is a significant growth driver within the BPC industry, particularly as more women join the workforce and increase their spending on beauty products.

The company’s existing strength lies in skincare, which accounts for over 60% of Honasa’s revenues. The launch of Staze reflects a deliberate effort to diversify and deepen Honasa’s presence in the colour cosmetics space, leveraging insights gained from their earlier Mamaearth offerings.

Market Dynamics and Competitor Landscape

The Indian colour cosmetics market is estimated to be worth around Rs 15,000 crore, with a rapidly growing online segment currently representing 10-12% of the market. Online sales are expanding quickly due to the convenience of e-commerce and the rise of quick delivery platforms such as Blinkit, Swiggy Instamart, and Zepto. These platforms have enabled new-age brands to reach consumers faster and more efficiently.

Within the price segment targeted by Staze (average unit price Rs 300-350), competitors include Blue Heaven, backed by private equity firm Samara Capital, and Perception, owned by Reliance Retail. Above this price range, brands like Sugar Cosmetics (backed by A91 Partners), Mamaearth, and Colorbar Cosmetics operate with average prices exceeding Rs 400 per unit.

Sugar Cosmetics reported revenues of Rs 420 crore in the fiscal year 2023, while Blue Heaven posted Rs 259 crore, indicating robust growth among mid-tier cosmetics brands. Industry analysts note that the lower-priced beauty segment (products under Rs 200) may account for 40-50% of the total market, though precise data is limited.

Karan Taurani, senior vice president at Elara Capital, highlights that the online channel’s growth and consumers’ willingness to try new products are key factors driving the rapid expansion of the colour cosmetics category.

Honasa’s Broader Growth Strategy

Honasa’s portfolio now includes seven brands: Mamaearth, The Derma Co, Aqualogica, Ayuga, Dr Sheth’s, Bblunt, and Staze. Among these, The Derma Co and Aqualogica have also shown strong growth, with ARR figures of Rs 350 crore and Rs 150 crore, respectively. This diversified brand strategy allows Honasa to target different consumer segments and product categories within the BPC market.

Despite the success of existing brands, industry experts suggest that growth rates for mature brands may moderate over time. Therefore, launching new brands and entering new categories will be critical for sustaining Honasa’s overall growth trajectory.

Recently, Honasa announced its entry into the moisturizing soaps segment, positioning itself against established players like Dove, which commands a Rs 2,000 crore market. This move underscores the company’s intent to broaden its product offerings beyond skincare and colour cosmetics.

In its latest earnings presentation, Honasa projected that the masstige segment—mass-produced products marketed as premium—will grow at twice the rate of mass-market products. This trend aligns with the company’s focus on affordable yet aspirational brands like Staze.

Implications for Indian Beauty and Personal Care Market

Honasa’s launch of Staze reflects broader shifts in the Indian BPC market, where younger consumers are driving demand for innovative, affordable, and accessible beauty products. The emphasis on digital-first marketing and distribution channels caters to Gen Z’s shopping preferences and social media influence.

The competitive pricing of Staze positions it well to capture market share from established multinational brands, which may face challenges adapting to rapidly changing consumer tastes and digital trends.

Moreover, the growth of online marketplaces and instant delivery services is lowering barriers to entry for new brands, intensifying competition but also expanding consumer choice.

For consumers, this means greater availability of diverse product options tailored to specific age groups and preferences, potentially leading to more personalized beauty experiences.

What this means

Honasa’s introduction of Staze marks a strategic expansion into the vibrant and competitive colour cosmetics segment, focusing on the digitally native Gen Z demographic. By aligning product offerings and pricing with the preferences of young consumers, the company aims to carve out a significant market share alongside established multinational and emerging domestic brands. This move not only diversifies Honasa’s portfolio but also exemplifies the evolving dynamics of India’s beauty and personal care industry, where innovation, affordability, and digital engagement are key drivers of growth. As the market continues to mature, brands like Staze will play a crucial role in shaping consumer trends and expanding the reach of colour cosmetics across the country.