MUMBAI: WOW Skin Science boomed during the pandemic, riding the naturals wave with its breakout onion shampoos and apple cider vinegar (ACV) products. However, the Bengaluru-based company quickly lost relevance, as consumers shifted to science-backed skincare products that delivered results.
An early-mover in chemical-free skincare segment, WOW continued to rely on a few hero ingredients—onion, ACV, aloe—long after markets became saturated with near-identical offerings. “Our differentiation was gone,” founder Manish Chowdhary told Mint. “Everyone was making some version of the same thing.”
Buoyed by initial success, the digital-first company ventured into costly offline expansion even as the beauty market was making a decisive shift to clinical, actives-driven products, which contain a high concentration of active ingredients that target specific skin problems.
“Our formulations were advanced five years ago. Today, they are obsolete,” Chowdhary said, as he attempts a comeback by revamping formulations, adding actives, launching new categories, without necessarily abandoning naturals. “Naturals became a commodity. Everyone was selling onion shampoo, our differentiation got diluted.”
Sharp reset
Over the past three years, India’s beauty and personal care market has undergone one of its sharpest resets since the naturals boom. Categories rooted in clinical efficacy are now among the fastest-growing, expanding at 14–15% annually, far outpacing mass naturals, according to BDO India’s 2024 sector report.
Masstige - a blend of mass and prestige that signifies affordable luxury - and premium segments, where science-backed formulations dominate, are projected to grow at a compounded annual growth rate (CAGR) of 11–13% through 2027, while mass naturals trail at 6–9%.
Actives-first labels such as Minimalist, Fixderma and Pilgrim are recording 50–70% growth, underscoring a decisive consumer pivot towards problem-solution skincare.
WOW's struggles were made worse by its poorly-planned expansion into general trade (GT) - neighbourhood retail outlets - during 2021–23. Like many digital-first brands, WOW underestimated the difficulty of offline distribution. It extended credit, hired heavily, and assumed online popularity would automatically translate into heavy store footfalls.
“We went ahead of our time,” Chowdhary said. “GT customers are not online customers. We gave too much credit, expanded too fast, and didn’t plan secondary sales well.”
Meanwhile, consumer literacy around actives—percentages, molecule names, derm claims—accelerated rapidly. WOW’s formulations, unchanged for years, no longer matched the expectations of an increasingly informed customer. “The technology and formulations we used earlier are obsolete today,” he said.
Where WOW struggled to pivot, some peers recalibrated more quickly.
Plum, one of India’s earliest clean-beauty brands, transitioned from naturals-first storytelling to a clear problem-solution pitch grounded in meaningful actives. Founder Shankar Prasad said the shift is not about chasing trends but meeting evolved expectations.
“People are still looking for actives, but they’re not chasing single ingredients anymore. They want solutions,” he said. “Those solutions can come from actives, natural sources, or hybrids like exosomes. What matters is results—and safety.”
Plum updates formulations regularly, validates claims, and focuses on texture innovation—gel creams, jellies, multi-step routines—speaking the beauty language that today’s consumers understand.
Juicy Chemistry doubled down on organic, high-potency skincare but with rigorous scientific backing. Pritesh Asher, its founder, has long warned against blind overuse of acids—a message now resonating as more consumers deal with barrier damage.
“People are exfoliating every day, even two or three times a day,” he said. “Now many have irritated, inflamed skin—and that’s why the natural segment is rising again.”
The brand focuses on both lab testing (in-vitro) and real-world testing (in-vivo), traceability and biotech-first formulation, achieving one of the industry’s highest repeat rates at 55% month-on-month. Its discipline on SKU strategy—reducing clutter and offering concern-specific kits—has maintained loyalty in a crowded market.
Even category leaders are leaning hard into actives.
Honasa, the parent comapny of Mamaearth, is doubling down on science-led beauty, and reported ₹538 crore in revenue in the July-September period, a 22% growth from a year ago. Earnings before interest, taxes, depreciation, and amortization (Ebitda) recovered to ₹48 crore, with gross margins above 70%. Its fastest-growing engines are actives-first brands—The Derma Co, Aqualogica and Dr Sheth’s. The Derma Co alone has reached a ₹750-crore annual recurring revenue (ARR) and recently became India’s No.1 sunscreen brand.
Honasa’s new bets and acquisitions—including prestige actives brand Lumineve and an investment in dermatologist-led Fang Oral—show a clear strategic shift: the company is placing its biggest chips on efficacy-driven, clinical positioning, not naturals.
This widening gap between actives-heavy growth and naturals-heavy stagnation sets the context - and compulsion - for WOW’s reinvention.
The naturals category itself is evolving. Shubham Virmani, co-founder of Esskay Beauty, said that early naturals failed primarily because the actives lacked stability and potency. “Consumers tried natural products, didn’t see results, and shifted to acids,” he said.
But technology is changing that. “With nano-encapsulation and better extraction, natural formulas can now deliver visible results,” Virmani added. “If it’s natural and gives results, it becomes a win-win.”
He also pointed to rampant greenwashing as a reason for naturals’ earlier downfall. “Every brand suddenly became ‘natural’. People tried them, didn’t get results, and moved back to chemicals.”
Today, naturals are being paired with clinically-validated actives and sensorial upgrades—fragrances, textures, rituals. Esskay is also seeing traction in neurocosmetics, which combine efficacy with de-stressing experiences, and in vegan beauty—now 20% of India’s cosmetics market, making the country the world’s third-largest vegan cosmetics consumer.
Vegan beauty refers to personal care products free of animal-derived ingredients.
The financials underline these divergent strategic choices. WOW Skin Science’s revenue surged from ₹6.5 crore (FY20) to ₹343.9 crore (FY22), but has since declined to ₹246.8 crore (FY24), with losses of ₹130 crore. Despite raising $98 million (including a $48 million Series C led by GIC in 2022), the company has struggled for profitability as its naturals-heavy portfolio lost relevance and its GT gamble misfired.
Plum, aligned early with the actives shift, grew from ₹91.8 crore revenue in FY21 to ₹418.6 crore in FY25, turning profitable with ₹24.7 crore in earnings last fiscal. Juicy Chemistry, though smaller, has kept revenue steady between ₹19–25 crore while narrowing losses from ₹32.5 crore in FY22 to ₹5.6 crore in FY25, supported by disciplined SKU rationalisation and high repeat users.
Over the past year, WOW has embarked on an internal overhaul—formulations, packaging, claims and channels—under what it calls “WOW 2.0.” The new model blends naturals with actives, signalled through “activity tags” on packaging. Early launches pair glycolic acid with apple cider vinegar, peptides with coconut milk, and niacinamide with rice water.
“We’re staying at the centre,” Chowdhary said. “We’re not abandoning naturals, but customers now want performance, not just stories.”
The company is slowing its GT expansion, tightening credit discipline, and reducing marketplace discounting. WOW is also betting on category-creation plays—a pre-shampoo scalp range, advanced hydration lines, and a still-confidential hygiene-adjacent launch slated for 2025.
Rebuilding credibility will take time. “Trust erodes fast,” Chowdhary said. Repeat rates on revamped products have improved, but WOW still trails actives-first brands in metros—the category’s bellwether segment.