Beauty and cosmetics businesses remain largely immune from macroeconomic challenges, riding the ‘lipstick effect’ where consumers spend on small indulgences even during economic downturns. This is especially true for India which has the eighth largest beauty and personal care market—$15 billion in size—growing at 10%, according to a Euromonitor International study.
However, inflation negatively impacts the prices of products due to higher costs of transportation and supply chain constraints. This makes the already high-priced items even less affordable—a factor Dheeraj Bansal and Rahul Sachdeva saw contributed to a gap in the market.
“I realised that very few brands delivered world-class quality products in the Indian market. The international products available were costly and beyond the reach of the masses. It propelled me to launch Recode in 2018 to provide international quality products in India at affordable pricing,” Dheeraj Bansal, Co-founder and Director of, tells YourStory.
The Ludhiana-based startup aims to become a household cosmetic and lifestyle marketplace, and a one-stop shop for all cosmetics and hygiene needs.
From bicycles to cosmetics
Dheeraj has been ambitious from a young age. Dropped out of his BCom studies when he was 20 years old, he started manufacturing spare parts for bicycles in Ludhiana in 1998.
He later met Rahul, a cosmetic brand marketing professional who gained expertise in the field while working with Makeup Professional.
“When Rahul approached me with the proposal, I recognised the chance to advance in this field and went from the bicycle to the cosmetic industry,” he says. “Rahul’s marketing expertise in the cosmetics industry and mine in management and operations helped us kick-start our venture.”
After completing market research,started with 5-6 SKUs, including nail paint, eyeliner, kajal, liquid lipstick, and bullet lipsticks. However, the pandemic was a threat to the makeup and lifestyle platform so it came up with a unique strategy—selling products on its website for just Re 1.
“This allowed us to get consumer feedback on the quality of our products while also being economically lucrative. Since everyone we sold to spread the word to their friends and family, we also increased our customer base,” Dheeraj tells.
Now, its platform offers beauty product lines from more than 55 brands, including Wow Skinscience, Colorbar, Shopparel, Power Gummies, Riyo Herbs, and Ofra.
While Recode does not directly manufacture products, it imports from Thailand, Germany, and China, and performs quality checks in-house. “We do private labelling and buy material from Mumbai, Sonipat, and Parwanoo. The manufacturers source their ingredients from France, Taiwan, Japan, and Italy,” he adds.
When Recode Studios entered the market in 2018, Dheeraj says only a handful of brands like Forever52 and PAC Cosmetics offered quality products. However, affordability was an issue.
“Products from global brands like Smashbox, Makeup Forever, Inglot, and Anastasia Beverly Hills offer lipsticks and primers in the range of Rs 1,800 to Rs 2,500, and few even go up to five-digit figures. On the contrary, we provide similar quality for around Rs 600-Rs 800,” he explains.
He cites the example of Ace of Base primer, which is available on Recode for Rs 785 while Smash Box and Makeup Forever sell it for Rs 2,200 and Rs 3,300, respectively. The startup sells 6,000-7,000 units of the product each month.
According to Dheeraj, Recode doesn’t position the brand distinctively on its marketplace. Around half of its revenue comes from its own SKUs while the rest from external brands. It also offers a 30%-50% discount on new products to attract customers, however, that’s subject to occasion and products.
The average basket size is Rs 1,200.
The 55-member team operates pan India, and is accessible in 170 cities, including Chennai, Jammu, Siliguri, and Bhopal, through its app and website—the latter having one lakh monthly active users.
It has tie-ups with 300 offline stores and also sells exclusively through three franchise brick-and-mortar outlets in Delhi, Faridabad, and Raipur. The company also has a presence on Amazon.
Catering to the age group of 18-34, the startup presently has about 30,000 users on the Recode Studios app, which has 30,000 total downloads, and a rating of 4.3 on the Google Play Store.
Funding and monetisation
“We started our business with the investment of Rs 1 crore from our savings,” Dheeraj states. “The brand is bootstrapped as of now, and we will look for funding if we face any difficulties in managing the inventory or if we need to introduce more SKUs.”
The startup claims it has a 50% customer retention rate, and generates 40% of its income online and the rest from offline stores.
In FY22, it recorded sales worth Rs 15 crore and aims to double that figure at the close of the current fiscal year.
“Last year’s growth rate of 3X exhilarated us, but we shall settle for 2X, amounting to Rs 30 crore this year,” he adds.
Recode Studios plans to launch 50-60 SKUs in the near future. It also plans to expand more into northern and southern cities in the next year, along with adding more brick-and-mortar stores.
While it doesn’t sell globally yet, international expansion will be on the cards once Recode becomes a Rs 100 crore turnover company.
The other cosmetic players in the industry include Nykaa, MyGlamm, Purplle, and SUGAR Cosmetics, among others. To keep its head above the rest, Recode also hosts masterclasses with renowned makeup artists including Meenakshi Dutt.
“The beginning was difficult; making enough profit at the start took a bit of work. But our marketing strategies for brand awareness got our brand recognised by potential clients, and the trust that we have lived up to has made it easier for us to survive in the market,” he says.