With Ayurvedic products powered by tech, Vedix eyes Rs 500 cr rev by 2025

Are onions good for hair growth? Do lemons help prevent acne? Social media platforms are filled with all kinds of beauty hacks. But ask anyone who has ever tried to actually make and follow these nature-based concoctions and the answer would likely be that these experiments either resulted in loss of time at best or at worst, caused further damage. 

Demand for health products have led to the emergence of a new segment of startups in India which promise to take the guesswork out of natural beauty and wellness regimen.  Instead of invading kitchens to find the right spices and herbs, users are only required to fill out a detailed online questionnaire to find the right product.

One such company, Hyderabad-based IncNut Digital, which runs platforms like Stylecraze.com,  SkinKraft and Mom & Junction, has tapped into Ayurveda to grow in the direct-to- consumer (D2C) space.

IncNut has been in existence since 2011 as a media and content platform and launched its Ayurvedic brand, Vedix, in 2017. Interestingly, Vedix competes with sister brand Skinkraft in the D2C beauty space. Parent IncNut had secured $4 million (about Rs 29.7 crore) in a Series A round of funding from RPSG Ventures in 2020 to grow the brands. 

Vedix, which soon plans to branch out in the wellness category, claims to already have a Rs 150 crore revenue run rate and aims to reach Rs 500 crore by 2025.  To achieve its ambitious growth plans, Vedix has upped its technology game. 

The Foundation

After working with beauty brands, IncNut founders Chaitanya Nallan, Sangram Simha, and Veerendra Shivhare wanted to take a fresh approach in the online personal care segment.

“And what could be a better way than ayurveda because it inherently believes in the combination of Vata, Pitta and Kapha, which are the three basic elements representing human body. These are the three doshas which determines the prakriti and vikriti of a person. Vata is the energy of movement, pitta is the energy of digestion or metabolism and kapha, the energy of lubrication and structure. So, that is how the brand started.  We leverage on the Ayurvedic principles,” Jatin Gujrati, Business Head, Vedix, told TechCircle.

Vedix has a team of ayurvedic doctors on board to create different products for different prakriti type.

In Ayurveda “prakriti” is considered to be genetically determined, and categorises the population into several subgroups based on phenotypic characters like appearance, temperament and habits. The concept is believed to help predict one’s susceptibility to certain diseases. 

“We took the approach these doctors have in an offline setting, tech-enabled it, took it to our website, and created a questionnaire that helps us understand the prakriti or the vikriti of the person and recommend the right product on our page,” Gujrati added. 

The company has built a subscription model to help consumers find the right product. These plans, which are typically for 2-3 months, not only help customers get used to the product but also are pocket friendly.

“So, the overall idea was to have a customer on board with us for a period of 4-6 months albeit it's not that the subscription is a compulsion in the sense that a customer is not paying upfront, they are still paying at the time of the delivery of each order. And one can cancel the subscription at any time. It's just that it allows us to serve our customers better through this model,” he added. 

Online focus 

Vedix is a digital-first brand and engages a majority of its customers through its website. In April 2021, it also launched on platforms Amazon.in. Over the next few months, Vedix will also showcase its products on Flipkart, Myntra, and Nykaa with select offerings.  

The company has put up their entire regimen on these platforms through some logic where users can self-select based on their hair, character, and issue type.  

Vedix is not focusing on offline retail at least this year. However, the company says it is open to exploring the option of experience centers where customers can see and try out the products and can get them delivered through Vedix’s warehouses.

Powering Ayurveda with technology

Personalising beauty and wellness products is no small task. Depending on age and gender, users have different requirements. Ayurvedic products are especially susceptible to regional and even the seasonal variations. Vedix says it maintains a comprehensive record of user requirements to control its inventory.

The company has responses from more than 3 million Indian customers, filtered by age, gender, and also the time of the year when they took the questionnaire. 

“We are able to manage that inventory very efficiently, and maintain the right amount of inventory,” Gujrati explained.

Vedix has an internal platform, which is yet to be rolled out, that can predict the products for the customers.

“We are working on an app-based analysis tool that can take pictures of your forehead, hair, tongue, skin, and other parameters and generate product recommendations just based on that with a few clicks. The feedback cycles are so quick by leveraging the technology,” Gujrati added. 

The company uses data for optimizing its inventory levels. It is directly put into R&D (research and development) for product development and improvement. The data is also used to test products. 

A perfect fit 

Vedix claims to have 1,50,000 orders a month, out of which, close to 70,000 are first-time customers and 80,000 are repeat ones.  

“If you look at our customer repeat rate, it is significantly higher than what a regular personal care brand would experience, for example, for someone in the general category would be over 25-30%. But we are at 65% in terms of repeat customer rate,” said Gujrati.  

Vedix says it has been profitable with healthy EBITDA margins. “And while we are present and visible on many platforms, in many forms, all of it run very tightly from a P&L perspective, to make sure that every dollar we spend on an ad, generates a certain multiple of that in terms of revenue,” Gujrati added.  

New growth

Vedix has a three-pronged growth strategy. First, it aims to build its brand in the Ayurveda product space. Second, the company wants to strengthen its presence across ecommerce platforms. Third, Vedix is planning an international expansion. 

The company forayed into the skincare segment in April 2021 and aims to enter the wellness category, with a range of detoxes customized according to customers’ Prakriti. It also plans to launch heart, lung, skin, hair, and liver capsules down the line.

“We will also launch weight management along with stress and diabetes management. So basically, in every possible way that we can add value to a customer's life, using Ayurveda, we’ll be aiming to be present in those categories. Other things that are in pipeline include body care, oral care, hair color, along with deepening our existing portfolio on skin and hair,” Gujrati said.

Vedix is also thinking up a geographical expansion with plans of venturing into the Middle East and the US.  

“Both these markets have a huge amount of Indian diaspora and are also more evolved market in terms of customer bent towards natural, herbal and Ayurvedic lifestyle,” he added.

“There's a huge trend towards sustainable living globally, especially in more developed economies. And I think Vedix has a very interesting opportunity ahead of us. We want to be synonymous with India. So, I think what some of the companies have done for their categories, we want to do that for personal care and Ayurveda in specific,” Gujrati said.

Apart from Skinkraft, Vedix competes with Bare Anatomy, Freewill, Freshistry and Emcee in the personalised D2C beauty brand segment. 

Financial services firm Avendus Capital, in a report published in October 2020, said the online beauty and personal care market would grow to become an opportunity worth $4.4 billion over the next five years, growing four-fold from $1.06 billion in FY 2020.

Vedix parent IncNut had secured a seed round of Rs 50 lakh from Venture East in 2013, which was later purchased by Japanese conglomerate Istyle in 2018.

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