Daybreak - Minimalist was the glow-up Hindustan Unilever's skincare line needed

Episode Date: April 10, 2025

One of the largest deals to acquire a D2C brand took place in January this year. India’s largest manufacturer of consumer good, Hindustan Unilever acquired the skincare company Minimalist, a 90% shareholding for nearly Rs 3000 crores.Homegrown startup beauty brands have been on a roll in India. Scores and scores of new age skincare brands have cropped up since the pandemic and all of them harp on the science of it. And their whole appeal is transparency. Transparency about the ingredients that go into each of their products.Among all of them, Minimalist is the one that really stands out. It is an active ingredients based skincare company that sells things like niacinamide, retinol, Vit C, glycolic acid, and salicylic acid. It launched around the end of 2020, and within a span of eight months, it built a 1000 crore rupee  business. What’s even more surprising that the brand has remained in the green, meaning profitable, from the very first month itself.For years, legacy brands like, HUL, Ponds, and Loreal have been selling products with similar ingredient--the only difference being they either didn't launch them in India or the kept the names hidden away in tiny fonts at the back of the bottles.It was Minimalist that came around and broke that mould.And now, seeing the success of brands like Minimalist, legacy brands are rethinking their strategy.Case in point: Hindustan UnileverThe company’s has been wanting to turn its beauty and well-being portfolio into a “high-growth" premium category for a while now and the acquisition of Minimalist is a big step in that direction.But how did Minimalist manage something that a giant like HUL couldn't?Tune in.**This episode was first published on January 27, 2025Daybreak is now on WhatsApp at [phone]. Text us and tell us what you thought of the episode!Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcast, you've probably heard me. My interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret source stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Homegrown startup beauty brands have been on a role in India. Scores and scores of new age skincare brands have cropped up since the pandemic and all of them hop on the science of skincare. And their whole appeal is transparency.

transparency about ingredients that go into each of their products. And among all of them, minimalist is the one that really stands out. It is an active ingredients-based skincare company, so it sells things like neosinamide for brightening, retinol, for fine lines, vitamin C, glycolic acid, salicylic acid, and so on and so forth. It launched around the end of 2020, and within a span of eight months, it built a 1,000, thousand-craw-rupy business.

And what's even more surprising is that the brand has remained in the green, meaning profitable, from the very first month itself. But for years, legacy brands like Pons and L'Oreal and HOL have been selling products with similar ingredients. The only difference is that they either did not launch them in India, or they kept the names of the ingredients hidden away in tiny fonts at the back of the bottles. It was minimalist that came around. and broke that mold.

And now, seeing the success of brands like Minimalist, legacy brands are rethinking their strategy. Case in point, Hindustan Unilever. The company has been wanting to turn its beauty and well-being portfolio into a high-growth premium category for a while now. And the acquisition of Minimalist is a big step in that direction. But how did a brand like Minimalist manage to do something that a giant like HUL could not?

Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Das Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rahil Philippos and I will come to you with one business story that is worth understanding and worth your time. Take Near Sinamide, for example. It is one of minimalist star products. Even co-founder Mohit Yadav uses it for his skincare routine. So what exactly is near Sinamide? It is actually a form of vitamin B3, and it is present in the food that you eat,

in your greens, in your eggs, fish, etc., etc. When used on skin, it reduces inflammation and it also helps with brightening. But guess what? Neosinamide is the hero ingredient in your pawns light moisturiser and also in Ole's Total Effects Face Moistreiser. The difference is that minimalist names the chemical up front. In fact, Minimalist's product is named after the chemical itself. So, is this Minimalist's success formula?

My colleague Nuhabweyre asked Anish Shet, the co-founder of Dr. Shets, a dermaturgical skincare company. He said it is nothing new, really. Minimalist is a high-quality brand that comes at a low price, which is what Indians love. So yes, it has hit the bullseye. It came in at the right time, at the right place, with the right kind of messaging. This was a time when skincare was all about natural ingredients. And that is because no beauty and personal care brand

was ready for a conversation about chemicals that they were using. Plus, a big myth that chemicals are bad got busted. We spoke about this extensively in our first special Friday episode, and I will link it to the show notes of this one. So when Minimalists launched its products during the pandemic, the market was ready for it. Nuha spoke to the co-founder Mohit Yadav and he told her and I'm quoting,

initially they felt that it would take a lot of time to create awareness and educate people about active in skincare. But there were a large number of customers already. So the zero to one journey was not very challenging. The company also has the advantage of controlling prices of most of its products in the 300 to 700 rupees range because it manufactures them in-house.

Now, this is a huge advantage for its aquiro, H-UL. But wait, why couldn't a L'Oreel or a pawns or even H-UL for that matter do the same thing? Priyanka Agarwal, who was a brand manager for L'Oreal, explained why. It is because L'Oreal imports its products. She also pointed out how minimalist success also has a lot to do with the rigorous quality checks that the company conducts as compared to other brands. In fact, Mohateyadav told the Ken that Minimalist works with a 25-member research and development team. These are people with prior experience from L'Oreal and Estee-Loder.

They invest 2 to 5% of their business in R&D, and the company has one manufacturing facility in Jaipur and is currently developing a second one. Stay tuned for more on what legacy brands are up to. Before we get into what legacy brands are up to, brands have been doing so far, let us get one thing out of the way. What does this acquisition mean? Number one, it means that active ingredients-based skincare is not just a fad. It is here to stay. Number two, transparency on part of brands can go a long way, especially when it comes to

skincare. And number three, this is a clear sign that 2025 could bring even more consolidation in the consumer space. These like this show that growing consumer brands with a solid user base and decent revenue are definitely worth investing in. Basically, it's a great thing for the industry in general. Now, coming to what legacy brands have been up to. Let's take HUL's Fair and Lovely, for example. It introduced it to the Indian market as early as 1975. And near cyanamide was actually the product's main ingredient. But you know what the packaging said? Advanced multi-vitamin. They did not want to name the chemicals because back then people thought all chemicals are bad.

But even now, when things have changed, fair and lovely, which thankfully is called glow and lovely now, still has the words advanced multivitamin printed on it, not the active ingredients. But the shifting consumer preference from natural ingredients to active ones like retinol and vitamin C and the success that brands like minimalists have seen in India have prompted legacy players to adapt to market trends. I mean, HOL took it so seriously that it has actually gone and acquired minimalist. Others have resorted to changing the packaging of their products like Pons. Even L'Oreal, the world's largest beauty and cosmetics company,

doubled down on the Indian market with the launch of its dermatological beauty brand called Serovi in November 2023. Meanwhile, it also started selling the French brand La Roche Posse in India. It also relaunched its luxury skincare arm, Langombe, in 2022 because of the demand for premium skincare brands. Neutrogena, which is owned by Johnson & Johnson, upgraded its popular moisturiser to add hyluronic acid in 2023. OLE, from Procter & Gamble, also introduced products like regenerous retinol-24 night cream

in its premium range. In fact, even HUL has been on it for a while. It launched Acne Squad an active ingredient-based product in October 2022 and also Novology, a dermaturgical product in May 2023. But being a legacy brand has its own disadvantages. Someone from HUL, who did not want to be named, told my colleague Noha that the company is so big and so bureaucratic in nature that instead of taking a speedy approach like other D2C brands,

they always end up being late to the party. So what can they do? Other legacy brands can take notes from what India's digital first beauty company Honasa consumer has done with its more than a billion dollars worth Mama Earth. Instead of diluting Mama Earth, which has always marketed its products as being toxin-free and natural, Hunasa built brands such as Acologica and Derma Coe and acquired Dr. Shets in May 2020. This was to cater to specific skills. skin concerns and target this demographic.

The company also leveraged the Mama Earth distribution network to penetrate these brands offline. In the six months to September 2020, nearly 13% of Hanasa's revenue came from its new products like salicylic acid serum and face wash, among others, from the active-based ingredient skincare category. Minimalist, meanwhile, needed to scale and grow more categories. And now, it shouldn't be so hard to pull off for the brand thanks to HUL's massive distribution network and packing. Daybreak is produced from the newsroom of the Ken

India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the Ken.com and click on the reds subscribe button on top of the Ken website. Today's episode was hosted by Snika Sharma and edited by Rajir Siyah.