Direct-to-consumer (D2C) beauty and personal care brand Wow Skin Science has continued to experience a decline in scale. After a drop of over 23% in revenue in FY23, the company’s scale further reduced by 9.6% in the fiscal year ending March 2024. At the same time, Wow Skin narrowed its losses by over 24% during this period.
Wow Skin Science’s operating revenue declined by 9.6% to Rs 233.49 crore in FY24 from Rs 258.11 crore in FY23, its annual financial statement filed with the Registrar of Companies shows.
Wow Skin is an omnichannel beauty and personal care brand that sells its products through offline stores, its own website, and marketplaces such as Amazon, Flipkart, and Nykaa. The firm operates four brands: WOW Skin Science, WOW Life Science, Body Cupid, and Nature Derma.
In July, the company also ventured into the cosmetic category with the launch of Colour Cupid.
Sales of beauty and personal care products remain the only source of income for Wow Skin Science, which declined by 9.6% to Rs 233.49 crore in FY24. Non-operating activities contributed an additional Rs 13.28 crore, bringing its total revenue to Rs 246.77 crore in FY24.
In terms of expenses, marketing expenses accounted for 28.6% of the total expense which decreased by 46% to Rs 107.84 crore in FY24. The cost of material formed 25% of the total expense and decreased by 23% to Rs 94 crore in FY24. However, employee benefit expenses increased by 35% to Rs 53.5 crore in the last fiscal year. Overall, the firm’s total cost decreased by 22.45% to Rs 377 crore in FY24 from Rs 486 crore in FY23.
At the end, Wow skin’s loss declined by 39% to Rs 130 crore in FY24 from Rs 213 crore in FY23. The company’s ROCE & EBITDA Margin stood at -48.45% and -40.73% respectively. On a unit level, the company spent Rs 1.61 to earn a rupee of operating revenue.
According to TheKredible, Wow Skin Science has raised Rs 788.67 crore in its lifetime. Chrys Capital is the largest stakeholder in the company with over 26% stake, followed by cofounders Manish and Karan Chowdhary.
Wow Skin Science competes with MamaEarth, Minimalist, and a clutch of direct to consumer brands in the personal beauty segments. Jaipur-based Minimalist’s revenue from operations surged 89% to Rs 347 crore in FY24 while MamaEarth posted Rs 1,920 crore of revenue with a net profit of Rs 147 crore in FY24.
The drop in scale goes well beyond the obvious here, as a recovery is likely to be much higher in the category going ahead. Consumers seem to be latching on to the lack of real differentiation in the D2C category in these segments, besides taking the discounts as normal. Wow Skin Science has a long, arduous road to recovery ahead.