Case Studies - Brand & Marketing - Personal care

Nat Habit Keeps it Fresh

Founded in 2019, the personal care brand has grown to Rs. 100 crore ARR, using a differentiated product strategy that has won it loyal customers.

Three Nat Habit products on a pale green background, hair mask, all day malai and henna paste
ONE BIG THING

Although brands are scrambling to enter the Ayurveda/ Natural category, Nat Habit has found a white space around differentiated products that use fresh ingredients.

It is no secret that the desire for natural products is deeply embedded in the Indian psyche. Dig a little and even the most ardent science lover will be a believer in traditional wisdom and ingredients.

This is the audience that Nat Habit, a personal care brand founded in 2019 by Swagatika Das and Gaurav Agarwal, has tapped into to grow to Rs. 100 crore ARR in 2023-24, on a base of 22 lakh customers.

There is no shortage of brands entering the natural / Ayurvedic / botanical personal care market in India. With brands like Patanjali positioned at the bottom end of the market and Forest Essentials and Kama Ayurveda at the extreme upper end, there is, a large and lucrative space in between for brands that get it right, as Mamaearth has shown. 

What sets Nat Habit apart, is its emphasis on fresh ingredients and processes that don’t follow the typical, outsourced assembly-line manufacturing. The brand is positioned as “Fresh Ayurveda” – and aims to create a world that is rooted in traditional wellness wisdom, but not “brown or medicinal.” 

Nat Habit has raised about INR 114 crores from investors like Fireside and Bertelsmann India. 

Product First

Interestingly, neither Das nor Agarwal have prior experience with personal care and the founders do not see this as a handicap. “It is very easy to build me-too products with little differentiation beyond brand and communication,” says Das, “but we were clear that Nat Habit’s difference would lie in the product.” 

Nomenclature strategy

Nat Habit’s nomenclature strategy reinforces its proposition. From ‘Ubtans,’ to ‘Malai’ and ‘Tiktas’ to ‘Ksheer lepas’– most products sport names that evoke traditional beauty rituals and remedies. The communication is centred around processes that communicate the potency of the formulation in an Ayurvedic kitchen “This is our moat,” says Das, “we want customers to know that there is a big difference between Nat Habit and competitive products that claim the same ingredients.”

Nat Habit’s nomenclature strategy reinforces its brand proposition.

The company has expanded its offering at a rapid clip and offers a wide range of products today – including a range for babies, teens and men. Haircare makes up 55% of the portfolio, with hair oil, hair masks and henna paste being the highest-selling products. The remaining 45% is skincare, where ‘Malai’ and ‘Ubtans’ are the hero products.

How has such a young company created such a large product offering?

Das attributes this to having R&D, product research and manufacturing in-house.

“We have a very fast-moving engine of research and ideation. A lot of difficulties that other companies face due to tech transfer between R&D and manufacturing get ironed out. We are able to cut short that back and forth between different functions because we have everything in-house and a very large customer base  – so it is easy to test out and move the R&D cycles faster.”

Swagatika Das, Co-founder, Nat Habit
2 packs of Nat Habit Under arm ubtan and two bottles of methi jal with raw ingredients
A quick ideation-research-test-launch cycle has allowed Nat Habit to launch some unusual products like an under-arm Ubtan and anti-frizz Methi Jal.

Launch & Growth

The team launched with a Meta campaign in 2019, which gave away free samples to about 25000 potential customers in NCR and seeded the conversation about a brand making ‘fresh products.’ 

Sales started to take off and the company had touched a revenue of Rs. 10 lakh per month, when the pandemic hit.  “Although our revenues took a hit, the unplanned downtime gave us space to work harder on our formulations,” says Das, “For example, we were able to crack a process that does not use emulsifiers.”

While the company has used a well-established D2C playbook to grow, one factor that has spurred their growth is high retention rates. Das says that 52-55% of their customer base repurchases across categories every year. While retention is hard to measure for large offline players, the industry average stands between 30%-35%. (In fact Nat Habit was brought to our attention by a loyal customer and anecdotally, the positive word-of-mouth seems strong).

When we ask about the effectiveness of marketing channels, Das is honest. “Of course, we are doing everything a D2C brand must do to grow, but we know that the traction we have gained comes down to our product – not great storytelling. That is a lever we have yet to focus on fully.” 

Nat Habit currently only sells online, although offline expansion is soon on the cards. 

The Challenges of Scale

Das says that the fresh ingredients in Nat Habit’s products deliver perceivably better sensorials, texture and effectiveness. However she admits that this differentiating factor, which leads to shorter shelf life, is also a challenge as the company prepares to go offline. 

By focusing on all aspects that influence shelf life, from packaging to ingredients, processing and formulation, Nat Habit has found ways to extend shelf-life for a select group of products that will be sold offline across channels, from quick commerce to modern retail. For example, a shampoo launched recently, after two years of product development, has all natural ingredients, but also comes with a 6 month shelf-life. 

Two Nat Habit Shampoo bottles with a bowl of curry leaves and a hibiscus flower
New launches, like this shampoo, have long shelf-lives, suitable for offline distribution

Shelf-life is a key focus for packaging and besides some distinctive pack shapes, the company also works hard on materials that create barriers for contaminants. 

The Next Leap

Preparations for Nat Habit’s next leap, will require an evaluation of  product portfolio and the battle for shelf and mind space in a hyper-competitive market, dominated by big brands. 

The company’s promise so far has been to give the customer what they deserve, not just what they ask for. (As Das says, no customer actually asked for fresh ingredients). They will need to build on the customer love and belief that they have garnered so far, and continue to hammer home this differentiation.   

3 Comments

  1. Something New in Personal Care market/industry, never heard of such thing but kudos to Swagatika Das and Gaurav Agarwal on finding the white space in the industry and aiming it with right products actually lets you to 100cr ARR. Once again PROVEN by D2C Startup “Nat Habit”.
    Keep it up with the great work!

    Cheers
    Jeet Jedhe

  2. Had not heard of Nat Habit and IMHO looking at their packs does not communicate any big difference. Its only reading this story that tells me why they are not like every other brand out there. Unsolicited advice: They will have to work much harder on pack design before they go offline

  3. If these guys can crack fresh ingredients plus shelf life for a mass audience and patent it they’ve hit gold

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