Start-up Ecotrail Personal Care’s cosmetics brand Iba Halal Care to tap West Asian, South African markets
Two young Jain sisters who have ventured into the super niche segment of ‘halal’ cosmetics with the launch of their brand Iba Halal Care in Ahmedabad around a year back, are not only eyeing the national arena but also overseas markets by the end of this fiscal.
Ecotrail Personal Care, a start-up by sisters Mauli and Grishma Teli, is the only company in India that makes halal cosmetics.
Halal refers to something that is ethical, permissible. While usually associated with food, the term extends to cover areas like pharmaceuticals, cosmetics, services among others. Halal cosmetics thus imply a range of cosmetics that do not use any animal derived ingredient (like pig fat, beeswax etc), harsh chemicals (parabanes, sulphates et cetera) or alcohol.
Having already tapped e-commerce sites of Amazon and Flipkart for its products, Iba Halal Care, which currently runs two stores in Ahmedabad and a franchise store in Aurangabad, plans to add one store every month henceforth. First up on the list are cities in Gujarat, like Vadodara and Surat, followed by a store in Chennai by September, and one in Lucknow in near future. Apart from exclusive stores, the start-up is also eyeing presence in shop-in-shop format across smaller cities and is tying up with leading local chains across geographies. As a strategy, Ecotrail does not wish to tap modern trade yet as they are not ready for the scale.
It all started when Mauli, 33, who holds a masters degree in pharmaceutical engineering from the University of Michigan, started toying with the idea of starting something of her own on her return to India from the US. Together with her sister Grishma, who armed with a degree in biotechnology from the University of Houston had already done some courses in cosmetics development, Mauli hired a professional agency to conduct a market research across cities like Ahmedabad, Delhi, Mumbai and Kozhikode.
“Our research showed that there is a latent demand for halal products in the cosmetics space, and we decided to tap this need gap,” Teli says. It has not been a cakewalk though; after floating Ecotrail in 2012, about two years went into product development and R&D. “We not only had to use ingredients that are natural, but also adhere to halal guidelines of not using fermented products. The entire supply chain behind our products uses halal ingredients. For example, if a supplier is giving us a raw material that uses beeswax, we cannot use it, as it has an animal source. We have to think of an alternative,” Teli explained. The products, as well as the manufacturing practice and the manufacturing site (at Changodar near Ahmedabad) are certified by the Halal India Authority. The certification is up for renewal every year.
One of the most common ingredients used in lipsticks is pig fat. The Teli sisters came up with an idea to use coconut butter instead. “Our products are vegan, cruelty-free and devoid of any harsh chemicals like sulphates, gelatin, carmine et cetera,” she claims.
While Iba (which means self esteem in Arabic) might be competition free in India, Mauli anticipates to face some once the start-up takes flight overseas in the form of existing brands like Amara Halal and Crescent Soaps, which are popular in the US and the UK. Globally, the halal market comprising food, pharmaceuticals, cosmetics and services is estimated to be around $1.62 trillion and it is estimated to touch $2.47 trillion in 2018. Of this, the cosmetics segment is currently valued at around $26 billion, and is expected to grow to $39 billion by 2018.
In India, however, the current market potential for halal cosmetics is pegged at at Rs 500-600 crore. Indonesia, Malaysia, West Asian countries, US, UK are geographies where halal cosmetics are popular. With 15 per cent of its population Muslim, India itself is a huge market. Moreover, the market potential does not restrict to one community alone; halal has an appeal for everyone, especially a steadily growing crop of consumers looking for natural products. A look at the visitors’ book at Iba’s flagship store in Ahmedabad confirms the same; its clientele includes a healthy mix of both Muslim and non-Muslim customers. Teli says that it is a 50:50 mix and the age group ranges between 18 to 30 years.
Expansion would also entail more investments into capacity. The current facility near Ahmedabad is running at 50-60 per cent capacity already, and would touch 100 per cent soon. Ecotrail plans to add a bigger facility within the next year. Teli said that they are yet to work out the fund outlay for the next five years, but are already looking for an investor to come on board. The firm has invested close to Rs 8-10 crore so far and aims to break even by end of FY16.
Originally published on www.business-standard.com