In a significant move for the skincare industry, Minimalist, a direct-to-consumer (D2C) skincare brand, has been acquired by Hindustan Unilever (HUL) for an impressive Rs 3,000 crore. This strategic acquisition is set to enhance Minimalist’s distribution capabilities, enabling the brand to expand both domestically and internationally. With HUL’s vast resources, Minimalist aims to boost its manufacturing and research efforts while penetrating offline retail markets.

Expansion Plans for Minimalist

In a recent interview, Minimalist co-founder Mohit Yadav shared insights on the company’s ambitious roadmap following its acquisition. One of the key initiatives includes establishing a new manufacturing facility in Jaipur to meet the growing consumer demand for their active ingredient-based skincare products.

• New Manufacturing Facility: The company is investing around Rs 100 crore in this new plant, a substantial increase from the Rs 30 crore initial investment for its first factory.
• Production Capacity: Currently, Minimalist’s existing facility produces nearly 150,000 units daily and operates at about 60%-65% capacity.

Financial Growth and Global Reach

Minimalist has shown impressive financial performance, generating Rs 350 crore in revenue for FY24, with a profit of Rs 10.84 crore. With HUL’s support, the brand is set to accelerate its growth and aims to penetrate new markets more effectively.

• International Ventures: Since entering the global market in 2021, Minimalist has expanded into regions such as Southeast Asia, the Middle East, the US, and the UK. Approximately 20% of its revenue currently stems from these international markets.
• Market Presence: The brand has made significant strides in the UAE, Malaysia, Indonesia, and Saudi Arabia, utilizing both online and offline sales strategies.

Strengthening Offline Distribution

To strengthen its offline presence, Minimalist plans to build on its existing distribution network, which already includes partnerships with major retailers like Nykaa and Apollo Pharmacy. Transitioning from a digital-first approach to a more comprehensive offline strategy has proven challenging for many D2C brands, but Minimalist is poised to navigate this shift with HUL’s expertise.

• Retail Partnerships: In the UK, Minimalist has partnered with Superdrug, a well-known multi-brand beauty retailer, to enhance its offline distribution channels.

Innovation in Product Development

Product innovation is a cornerstone of Minimalist’s growth strategy. The acquisition by HUL grants the brand access to extensive research and development resources, facilitating quicker and more efficient product launches.

• R&D Facilities: Minimalist operates a dedicated R&D facility in Jaipur, focusing on a variety of skincare products, including a newly introduced baby-care line. The brand is recognized for its use of scientifically backed active ingredients such as hyaluronic acid, niacinamide, and retinol.

“We now have the potential to significantly speed up product development with access to HUL’s global R&D capabilities,” said Yadav. This collaboration is expected to broaden Minimalist’s product offerings and enhance its competitive edge in the skincare market.

Conclusion

The acquisition of Minimalist by HUL signifies a pivotal moment in the skincare industry. With plans to enhance production capabilities and expand into new markets, Minimalist is well-positioned to redefine its growth trajectory, making waves in both domestic and international markets. As they leverage HUL’s extensive resources, the brand is set to innovate and meet the evolving demands of skincare enthusiasts worldwide.