Mamaearth To Restructure Offline Distribution Strategy Amid Sluggish Revenue Growth

Honasa Consumer Ltd., the parent company of the beauty and baby care brand Mamaearth, is planning to restructure its offline distribution model, Chief Executive Officer Varun Alagh told analysts on May 23. This decision follows financial results indicating a sequential decline in quarterly revenue

The company now intends to directly collaborate with distributors in the top 50 cities, aiming for enhanced control, Alagh said.

"When we commenced, we were predominantly an online entity. Consequently, we had to establish a distribution infrastructure involving super stockists, who served as bulk breakers," the CEO said. "However, their quality did not meet our expectations."

This approach resulted in lower quality sales and increased costs.

The company has nearly 1.9 lakh retail outlets in the country as of March, increasing the distribution by 34% on a yearly basis.

"We have now embarked on a project to build a more robust infrastructure for direct distribution. This endeavour will be accelerated over the next three quarters," Alagh said.

Honasa—also the owner of Derma Co—reported a consolidated net profit of Rs 30.5 crore in the fourth quarter of the financial year 2024, compared to a loss of Rs 161.6 crore in the preceding year, according to an exchange filing.

Mamaearth experienced single-digit growth in the last financial year, trailing behind the double-digit growth of Honasa's overall portfolio. Conversely, the company's newer brands are demonstrating better performance.