Naandika covers startups, tech, corporate and human interest stories. She holds a postgraduate degree from Indian Institute of Journalism and New Media (IIJNM, Bangalore), with specialisation in Business and Investigative journalism. Apart from writing for the magazine, Naandika also handles social media, events and the Blogs section on forbesindia.com. Outside of work, you will find her traveling and exploring new places, volunteering for NGOs, rescuing animals, and mostly spending time around them.
Jigar Shah and Deepika Padukone, co-founders, 82 East
Following the Covid-19 pandemic, health and wellness became more important to a lot of Indians, with consumers paying more attention to ingredients and formulations. Consequently, a flurry of startups emerged in the beauty and personal care (BPC) segment to cash in on the trend. Actor and investor Deepika Padukone, too, decided to launch her own skincare brand with a vision to marry Indian ingredients with science-based compounds. She discussed the idea with her fund manager and venture capitalist, Jigar Shah, who had just joined her investment entity, Ka Enterprises.
After two years of planning and research, Padukone and Shah launched direct-to-consumer (D2C), self-care brand 82 East in November 2022. “The uniqueness of our formulations sets us apart in not only the highly competitive Indian market but also on a global scale,” says Shah. The formulations are made by in-house scientists at the company’s R&D centre in Bengaluru, while the products are manufactured by third-party companies. “I'm the first one to try any product. Anything that is out there in the market today, rest assured that I have tried it on first and will give my feedback. And then it goes into trials,” Padukone tells Forbes India.
82 East has launched 12 products— inaugural products such as Ashwagandha Bounce moisturiser and Patchouli Glow sunscreen were priced Rs 2,700 and Rs 1,800, respectively—following which they have also launched travel-friendly mini versions.
According to a 2023 report by McKinsey, the beauty industry, including skincare, fragrance, makeup, and hair care, generated around $430 billion in global revenue in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 6 percent through 2027. 82 East is on its way to reach a Rs 100-crore annual run rate (ARR) very soon, claims Shah, and has shipped to about 50 countries so far. Currently, between 5 and 10 percent of sales are from the international market.
In December 2022, 82 East raised $7.5 million in a seed round led by DSG Consumer Partners, IDEO Ventures, and several ultra-high net worth individuals (UHNIs). The founders are targeting a Series A round in 2024. “We are delighted with our investment and very proud of the team for achieving incredible results in just its first year. Jigar's commitment to business-first principles and Deepika's profound grasp of brand and design collectively position this brand to evolve into a truly global brand from India that we will all be proud of,” says Deepak Shahdadpuri, founder and managing director of DSG Consumer Partners.
As 82 East completes its first year, co-founders Padukone and Shah talks about how the last year has been, and what’s coming next. Edited excerpt:
Q. 82 East aimed to simplify the process of choosing and using skincare products, and educating consumers. How have you managed to do that?
Deepika Padukone: We’ve managed to do that by being consistent. We identified a pain point that was actually my pain point. I told Jigar, ‘Why does skincare have to be so complex?’ There are a lot of brands, but everyone is talking about complex routines and ingredients. I wanted beautiful, glowing skin, but wanted it to be simple yet effective. The other issue was having to choose between products based on Ayurveda and those based on science. So, we took all of this together, and that's how 82 East came about. In recent times we've seen other brands talk about simplified skincare. And we're really happy about that.
Q. All 82 East products are sold on its website. Do you plan to be on other marketplaces, or offline stores?
Jigar Shah: The short answer is yes. But the long answer is that this was a conscious call. A business shouldn't exist just because there is a celebrity. A business should exist because there is a consumer pain point. And unless and until consumers buy your solutions, you will never know. Year one for us has been about validating some of our hypothesis: Is our solution of simplification—cleanse, hydrate, and protect—truly working? Now we have that, and so we’re ready to be on other marketplaces.
Q. What's the customer repeat rate on the website?
JS: Our customer repeat rates in the first quarter were about 20 percent; it is now up to 60 percent. That's a number I've not seen in my limited consumer career. Our customer satisfaction scores or product ratings across hundreds of consumers are on average 4.3 or 4.4 on a scale of 5. Our net promoter scores at a brand level was 54 when we launched, and within six months it was 60; this September it was 65. That puts us in the league of some of the top global brands, not just in BPC but even outside BPC.
Q. What's the sales contribution from the domestic and international markets?
JS: It changes from month to month, but the range is 5 to 10 percent from the international market. We've shipped to over 50 countries in the last 12 months and can ship to about 150 countries.
Q. You wear multiple hats. How was your experience of building this brand from scratch?
DP: It's been extremely gratifying. But it's also been a lot of hard work. We keep saying that we launched exactly a year ago. But we were working on this for almost two years or more before that, to get everything up and running. The work after we launched has been far more than any of us expected. But it all feels worth it. When you see a vision come to life and you see consumers embracing the story you're telling, you're telling it not just with authenticity but also with consistency. And then to see consumer feedback for the brand, for the products, and for how we engage with our community, all of it has been extremely satisfying. So, whenever we hit any kind of speed breaker, it's that love and appreciation that keeps us going.
Q. What have been the speed breakers?
DP: Sometimes it's ingredients, sometimes it's packaging, sometimes it's logistics, and sometimes it's a factory deciding to shut down. There are all kinds of things that you don't know, and with experience, you're better prepared. Every month, we're just getting better and better. But there will always be that unexpected curveball that comes at you. And as a team, you come together and decide how you want to tackle that situation the next time around. That's the case with any startup, I would think. It's exciting and fun at the same time to be able to problem-solve.
Q. You've invested in a lot of startups. What are the top three criteria that you look for before investing?
DP: Jigar looks at the business side of things, but for me, eventually, it's just a gut call. It has to be an extension of who I am and what my beliefs are. I feel you have to believe in the founders and co-founders. You have to believe in their vision. You have to feel that connection. And what they're selling has to be an extension of who I am. Beyond that, of course, from a business perspective also, it has to make sense. So, we look at it through two or three different parameters. And then we go ahead and keep our fingers crossed.
Q. As co-founders, how do you complement each other?
JS: We understood each other's strengths and played on that. I look after all the business operations, fundraising, and HR, and her strength is her creative view on things like brand marketing, packaging, and most importantly, the community she’s built over the years. It's very important, as co-founders, to have that understanding and give each other space. We are both people who believe in that, and I think we give each other that space to sort of take those decisions and take those verticals forward.
DP: For example, if there's something packaging-related, if there's something warehouse-related, or if there's something HR-related, he takes the lead on that, and I sit in on that. Similarly, if there's something like marketing or packaging, or a creative or campaign, I take the lead on it. He's sitting. So, while we are aware of what my strengths are and his strengths are, I'm also in on some of his meetings so that I can learn, and he's in on some of my meetings so that he can learn. We both have to feel comfortable that we're making the right decisions.
Q. What's the two-year plan for the company?
JS: Focusing on not only scaling the R&D facility but also launching two categories soon. One is expansion across products. The second is expansion across channels, offline and marketplaces. And third is, while we ship globally from India, we want a more solid presence in other geographies as well. That is something we are really looking forward to over the next two years.