D2C Brand generate huge operational profit

D2C Brand generate huge operational profit

Direct to consumer (D2C) brands in the beauty and grooming segment are more likely to achieve profitability than e-commerce marketplaces. MamaEarth came close to breaking even in FY20 despite a 5.6X increase in operational revenue to Rs 110 crore, while Beardo made a profit for the first time during the same year (FY20).

The financial results of Coimbatore-based Juicy Chemistry in FY21 further demonstrate that D2C businesses may develop swiftly while maintaining strong economics. According to its annual financial accounts submitted with the RoC, the company’s operational revenue increased by more than 5X to Rs 18.8 crore in FY21 from Rs 3.72 crore the previous year.

In FY21, Juicy Chemistry earned Rs 17.38 crore from sales in India and Rs 43.48 lakh from shipping and courier services. With the expansion, the company’s expenses increased 4.7X to Rs 18.6 crore in FY21, up from Rs 3.91 crore in the previous fiscal year.

Marketing and commission (paid to marketplaces and other sales channels) cost Rs 7.22 crore in total, accounting for 38.87 percent of Juicy Chemistry’s total expense in FY21. These expenditures increased by almost 9.25X in FY21, compared to Rs 0.78 crore in FY21. Despite Covid, Juicy Chemistry has seen excellent growth in FY21, because to solid fundamentals and frugality.

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