India’s beauty and personal care (BPC) market is experiencing rapid growth, driven by consumer trust, investor interest, and innovation. According to a Redseer-Peak XV estimate, India is projected to achieve the highest compounded annual growth rate (CAGR) of 10% between 2022-2027, outpacing markets like China and the U.S. This surge in demand is expected to elevate India’s BPC sector from $19 billion in 2022 to $30 billion by 2027, contributing to nearly 5% of a $660 billion global market. Amid this expansion, BPC startups have raised over $1 billion in funding since 2014, but the future success of these brands hinges on innovation and resilience in an increasingly competitive market.

India’s Booming Beauty Market

The Indian beauty and personal care (BPC) market is expanding rapidly, driven by a shift in consumer behavior and increased per-capita spending. According to a Redseer-Peak XV report, India is forecasted to grow at a CAGR of 10% from 2022-2027, the fastest among major markets. By 2027, the market is expected to reach $30 billion, compared to $19 billion in 2022, accounting for nearly 5% of the global BPC market, valued at $660 billion.

This growth trajectory is being fueled by a combination of rising demand for premium products, evolving consumer preferences, and an increasing focus on personal grooming and wellness. The emergence of direct-to-consumer (D2C) platforms has also created opportunities for startups to tap into this lucrative sector.

Resilient Funding Environment for BPC Startups

Despite global economic headwinds, BPC startups in India have raised over $1 billion in funding between 2014 and H1 2024. The sector has seen the entry of hundreds of brands, competing for consumer attention. The pandemic, in particular, spurred a wave of D2C ventures, as brands looked to capitalize on the growing e-commerce ecosystem.

However, with increasing competition and the influx of new brands, the question remains whether these startups will set long-term trends or face consolidation and market exits. The key challenge for brands is to sustain growth through continuous innovation and adapt to rapidly changing consumer preferences.

Hyphen: A Strategic Move by PEP Technologies

One notable player in this evolving landscape is Hyphen, a personal care brand launched by PEP Technologies, the parent company of mCaffeine. Unlike many brands in the sector, Hyphen has been launched as a strategic initiative to diversify PEP’s portfolio and maintain the brand identity of mCaffeine. While mCaffeine has focused on caffeine-based body care products, Hyphen aims to carve its own niche with a range of facial care offerings.

mCaffeine has built a strong market presence with a valuation exceeding $119 million and funding surpassing $40 million. The brand claims to have sold over 10 million products across 18,000 pin codes, securing a 65% share of India’s body care market. However, all of its products are based on the core ingredient of caffeine, limiting its expansion into new categories.

Hyphen’s Unique Value Proposition

To avoid diluting mCaffeine’s core brand, Tarun Sharma, cofounder and CEO of mCaffeine and Hyphen, saw the need for a new brand. Hyphen aims to address a different set of consumer needs with products not tied to caffeine, allowing users to enjoy a more diverse skincare range. The brand offers 21 SKUs for facial care, including cleansers, moisturizers, serums, and sunscreens, positioning itself as a 100% vegan and cruelty-free brand.

This strategic pivot ensures that both mCaffeine and Hyphen can coexist in the market without cannibalizing each other’s audience. The introduction of Hyphen enables PEP Technologies to broaden its product offerings and cater to the growing demand for premium skincare products.

Kriti Sanon’s Role and Expansion Strategy

Actor Kriti Sanon has joined Hyphen’s leadership team as a cofounder and Chief Customer Officer, overseeing product development and user engagement. Her involvement not only lends star power to the brand but also helps in shaping Hyphen’s customer experience, addressing queries and reviews directly.

The brand has set ambitious targets, including annualized gross sales of INR 100 crore by July 2024, a user base of 1 million, and distribution across 20,000 pin codes. Hyphen is leveraging mCaffeine’s established omnichannel presence and distribution network to reach these goals. It has already received an infusion of INR 30 crore from PEP Technologies to fuel its expansion.

The Future of India’s BPC Market

As India’s BPC market continues its upward trajectory, brands like Hyphen and mCaffeine are well-positioned to capture market share. However, sustaining long-term growth will depend on continuous product innovation, consumer engagement, and the ability to adapt to changing market dynamics. With increasing competition, only the most strategically agile brands are likely to thrive in this fast-evolving sector.