ESME's beauty transformation
When we talk about beauty and personal care in India, the spotlight usually shines on the fancy brands, the online sensations driven by influencers, and the glamorous launches aimed at the big-city crowd. But away from the dazzling lights and high-end stores, a quieter, yet far-reaching, transformation is happening. This silent revolution holds the key to understanding the future of how India buys its beauty products.
Leading this change is ESME Consumer, a company that’s growing fast and thinking big in the mass-market beauty space. It all started in 2019 when Samara Capital, a private equity firm, brought together two well-established Delhi-based FMCG players: Blue Heaven Cosmetics and Nature’s Essence. ESME’s mission is clear: to serve the vast majority of India, the consumers in Tier II and III cities. They are rewriting the rules of how aspirational beauty is created, distributed, and scaled for the hundreds of millions of consumers who live beyond the major metropolises.
“Our idea was simple,” explains Rohit Gothi, MD & CEO of ESME. “We wanted to build a brand that offered the same level of quality and the same feeling of aspiration that the premium brands do, but make it affordable and accessible to the real India – the India that lives in Tier II and III towns.”
Today, ESME’s way of doing business – profitable, efficient, and based on solid commercial sense – provides a compelling roadmap for where the Indian beauty market is headed. This is not about fleeting trends or burning cash to grab customers; it’s about building a strong brand with deep roots in the market.
India’s beauty and personal care market is already huge, worth close to $30 billion in 2024. And it’s set to grow even bigger, reaching an estimated $48.5 billion by 2033, with an annual growth rate of around 10-11 per cent. While the big cities still account for a lot of the spending, the real surge in growth comes from Tier II and III cities. According to Redseer, almost half of the new online beauty shoppers are now from these smaller markets. What’s more, physical stores – where ESME has a strong foothold – still make up over 70 per cent of all beauty sales.
This growth is not just about more people having access to beauty products; it’s about their rising aspirations. Small-town India is changing rapidly. “Tier II and III cities are not just the next place to sell more; they represent a fundamentally different kind of consumer,” says Abhishek Kabra, Managing Director at Samara Capital.
“They want good quality, they recognise brands, but they also demand value for their money. And that’s where ESME really shines,” he adds. Samara Capital saw the immense potential in these often-overlooked markets and understood the need for a company that truly understood and catered to these consumers.
Building a brand
ESME Consumer’s strategy has been sharply defined from the start. Their current range includes over 240 different products, covering everything from skincare and personal care to colour cosmetics. Whether it’s facial kits and serums from Nature’s Essence or the wide array of lipsticks and foundations from Blue Heaven, ESME’s products are designed to meet the specific needs and desires of these emerging consumers.
Blue Heaven Cosmetics, the brand’s flagship, has a history stretching back almost 50 years. It’s a brand with deep roots in the Indian beauty market, and ESME has carefully modernised it to appeal to today’s younger consumers who are looking for trendy, vibrant, and affordable make-up options.
Nature’s Essence is a leading professional skincare brand, known for its commitment to natural ingredients and ethical practices. Renowned for its effective and affordable products, the brand has the widest reach across mass-market salons and parlours. With the introduction of ESME, Nature’s Essence has expanded its portfolio to include innovative skincare and haircare solutions.
A key factor is their strong commercial discipline. Unlike many new companies that are focused on rapid growth at any cost, ESME made a conscious decision to prioritise profitability. “From day one, we were clear: we were not just chasing sales numbers if it means losing money,” says Gothi. “Every rupee we spend has to make good business sense.”
In 2024, ESME launched an impressive 27 new products while still maintaining profitability – a significant achievement in a market where many new beauty brands struggle with high customer acquisition costs. ESME’s approach to building their brand relies on smart, targeted strategies rather than massive, expensive marketing campaigns. For example, Blue Heaven’s partnership with the hugely popular Bigg Boss Season 18 as a ‘Beauty Partner’ and their collaboration with actress Radhika Madan have proven to be very effective in increasing brand awareness and connecting with their target audience.
By focusing on creating products that are relevant to their consumers, keeping prices affordable without sacrificing quality, and building a strong and widespread retail presence in Tier II and III cities, ESME Consumer is bringing organisation to what was once a very scattered and unstructured beauty market in small-town India. They provide the reliability and consistency of organised retail to consumers who previously had limited access to good quality, branded beauty products.
A smart approach – selling online
A crucial part of ESME Consumer’s success and their ability to grow sustainably lies in their own manufacturing and research facilities. The company operates four factories across three regions – two in Haridwar, one in Manesar, and one in Baddi – giving it complete control over the entire process of making its products. This ‘backward integration’ is not just about saving money; it ensures consistent product quality, allows for faster innovation, and helps manage costs effectively. This means they can offer products that feel and perform like higher-end brands, but at prices that the mass market can afford.
“Having our own manufacturing is not just about being efficient with costs – it’s about making sure our quality is top-notch, being able to adapt quickly, and building a strong foundation for the future,” Gothi explains. This control over their supply chain gives ESME a significant advantage in a market where offering consistent quality at affordable prices is key to success.
ESME Consumer’s approach to selling online has also been smart and strategic. Starting from a very small online presence just 3 years ago, their e-commerce sales have grown to around 15 per cent of their total revenue. This growth has been driven by strong performance on major online platforms like Amazon, Nykaa, Blinkit, and Purplle. However, ESME’s main focus remains on achieving online growth that is profitable and sustainable, ensuring that their digital sales contribute meaningfully to their overall business rather than just boosting their top-line numbers. Their online strategy involves carefully selecting the products they offer online and focusing on platforms that align with their target consumer and brand image.
A significant, though often overlooked, aspect of ESME Consumer’s impressive growth story is their commitment to operating like a professional, technologically advanced, and ethical company, on par with multinational corporations. With the active guidance and support of Samara Capital, ESME has built a strong leadership team with experienced professionals across all key areas, from sales and marketing to supply chain, HR, and finance. This focus on professional management has allowed ESME to implement and adhere to strong governance practices.
“Our approach to transforming ESME was to build it for the long term, focusing on strong governance, leveraging technology, developing our leadership, and prioritising sustainability. It’s now a solid platform ready for many years of growth,” states Kabra. This commitment to good governance provides a strong and stable base for their continued expansion.
Furthermore, sustainability is a core value at ESME Consumer. They have actively integrated environmentally friendly practices into their manufacturing operations, showing their commitment to protecting the planet. ESME also strongly believes in diversity and inclusion in their workforce, a commitment that earned them the prestigious DEI Power Award in 2024. Beyond their direct business activities, ESME has launched impactful social programmes like Esme Paathshala, which provides skills training for workers in the beauty industry.
The company’s growing manufacturing operations have also created hundreds of jobs, particularly empowering women in Tier II and III cities. This not only contributes to ESME’s growth but also aligns with India’s broader goals of promoting inclusive and sustainable economic development, demonstrating their commitment to making a positive impact on the communities where they operate.
ESME Consumer’s strategic position in the Indian beauty market couldn’t be better. India’s economy is projected to continue its strong growth, with rural areas and Tier I and III cities now driving more of the demand for everyday goods than the major cities. These smaller markets currently account for over half of all FMCG sales in India, and people are increasingly looking for higher-value products, including in beauty, even outside the big metros.
ESME Consumer’s plans for the future are ambitious but built on the same solid foundation that has led to their success so far. Over the next year and a half, they aim to double their manufacturing capacity to meet the growing demand. They also plan to introduce more innovative and targeted products to cater to the evolving needs of their consumers.
Additionally, ESME intends to significantly expand their physical retail presence, reaching over 100 new Tier II and III cities, while continuing to grow their online sales in a way that is both profitable and sustainable.
“Beauty in India is not just about the big cities and glamour – it’s about understanding, respecting, and serving the real consumers of Bharat. That’s the heart of ESME’s journey,” concludes Gothi.
As India’s vast consumer market continues to evolve, the companies that succeed in the beauty and personal care sector won’t be the ones chasing every fleeting trend or solely focused on the urban elite. Instead, the winners will be those who build strong, trusted brands based on efficient operations, a deep understanding of the Indian consumer, and a genuine commitment to delivering value. In this dynamic and rapidly changing landscape, ESME Consumer stands out not just as a successful brand – but as a new and effective model for how to grow beauty, profitability, and purpose together, for the heart of India.