It has now become a big trend for Indian film stars to build their own empire away from the screen, but the real world of business is far away from the glamor of films. According to recent market research and corporate reports, about 65% of celebrity brands started in India struggle within their first 5 years.
The data clearly shows that today’s customer buys products not just based on ‘face’ but also wants quality and a good price for their product. For this reason, the brands of many big stars are either incurring huge losses today or have almost disappeared from the market.
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Real superstars of business
Stars like Hrithik Roshan and Katrina Kaif are seen at the forefront on the business pitch. These stars not only invested but also associated the brand with their identity.
HRX (Hrithik Roshan): Started in the year 2013, this brand is today India’s largest domestic activewear brand. According to financial reports, its annual revenue has crossed ₹1,000 crore. The main reason for its success is its 51% strategic partnership with Myntra.
Kay Beauty (Katrina Kaif): This brand, launched in partnership with Nykaa, is now completely profitable. According to reports, it touched a revenue of more than Rs 100 crore in the very first year of its launch and today it is included in the top 3 celebrity makeup brands of India.
Big names and brands which flopped in the market
Just having a big name is not a guarantee of business success. Many ‘A-lister’ stars of Bollywood launched brands which are either defunct or completely unknown today. The main reason behind the failure of these brands has been wrong marketing and lack of understanding of the market.
Nush (Anushka Sharma): This clothing brand, launched in 2017, suffered huge losses due to allegations of design copying. According to reports, within two years of its launch, its sales declined by 40% and gradually its marketing and stock supply was almost stopped.
SKULT (Shahid Kapoor): Shahid Kapoor launched SKULT in the athleisure segment. Despite being associated with the platform of Aditya Birla Group, the brand is almost missing from the market today due to lack of distribution and operations.
Rheson (Sonam and Rhea Kapoor): Sonam Kapoor’s brand ‘Rheson’, known as a fashion diva, did not live up to the expectations. Data shows that more than 70% of its stock had to be sold at huge discounts because customers were not showing interest in buying these products without sales.
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Brands that are still struggling
There are some celebrity brands in the market which are running but their financial condition is worrying. There has been huge investment in these brands but profits are still far away.
82°E (Deepika Padukone): Deepika’s skincare brand is in the premium segment. A research report by Avendus Capital shows that 80% of India’s beauty market is based on products priced below Rs 1,000, while the average price of their products starts from Rs 2,500. Because of this high-priced model, the brand is finding it very difficult to reach the mass-market.
Wrogn (Virat Kohli): Its brand revenue is around Rs 400 crore but audit reports of previous years show that the company has suffered a net loss of Rs 40-50 crore due to its marketing and promotion. That means, more money is being spent on advertising than is being earned.
Prowl (Tiger Shroff): Tiger’s brand is not able to compete with Hrithik’s HRX in the gym wear market. Its market share is less than 2%.
Why are stars’ brands failing?
Market experts and companies like RedSeer say that the biggest reason for the failure of these brands is their being very expensive. Often stars keep the price of goods so high that the common man is unable to buy it. Also, people do not buy the goods again due to relying only on the name and not paying attention to the quality.
Data shows that these brands spend 1.5 times more than ordinary companies on advertising and publicity. Due to this huge expenditure and low profits, even a brand like Virat Kohli’s Wrogn is running at a loss of crores.
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