Home-grown brands vie for spot in India’s cosmetics and beauty industry

Rebecca Bundhun

Pearl Nimbalkar, 25, a fashion blogger based in Mumbai, spends up to 12,000 rupees (Dh680) a month on make-up.

“I’m a beauty addict,” she says. “Make-up shopping goes right to the top of my list.”

Ms Nimbalkar says there seems to be an ever-growing range of products available in India. She buys both international and Indian brands. Lipsticks are the cosmetic goods she buys most frequently, followed by foundation and eyeliner.

“As long as it looks good on me then I shall be their loyal customer until I find a better ,” Ms Nimbalkar says. MAC, a cosmetics firm headquartered in New York and controlled by Esteé Lauder, and ColorBar – an Indian cosmetics company – are two of her favourite brands.

The cosmetics and beauty products industry is on the rise in India, driven by a growing middle class, changing lifestyles and a surge in availability and promotion of such goods. Both Indian and international brands are looking to tap this market that experts say has enormous potential for further growth. Global names including Clarins, Revlon, and L’Oréal are among those with a major presence in India.

Sales of beauty products in India are expected to rise to 397 billion rupees in 2017 compared to 250bn rupees in 2014, according to a report by KPMG and the National Skill Development Corporation.

“The rise in consumer awareness and changing lifestyles of the population is leading to the growth of colour cosmetics in India,” according to MarketsandMarkets, a market research firm. “The increasing consumer spending in colour cosmetics, innovation of new products, rise in conscience about appearance, growing beauty and personal care industry, technological advancement in colour cosmetics, and rise in demand for cosmetics due to age-related imperfections are a few of the drivers of this market.”

Arvind RP, the vice president and head of marketing and product retail at Kaya India, says that Indians are “now constantly on a quest to improve appearances”. Kaya has skin clinics across India and the Middle East and sells a range of skin and hair care products.

“We believe this trend has been influenced by increased international exposure because the new age Indian is well-travelled, consumes more information on the go and has higher disposable income,” he says. “While traditionally women have naturally been inclined towards being conscious about looks, men have also contributed to the growth of the market. The Indian consumer has a more active lifestyle than earlier. In line with this lifestyle trend, we see a lot of consumers investing in preventive and curative services to look and feel younger.”

Lakmé was India’s first domestic make-up brand and is the largest home-grown company in the segment. It was named after the eponymous French opera, the title of which was derived from Lakshmi, the Hindu goddess of wealth. The cosmetics company was founded in 1952 after the prime minister at the time, Jawaharlal Nehru, asked the industrialist JRD Tata to start making beauty products in India because Indian women were spending heavily on foreign cosmetics. The brand is now owned by Hindustan Unilever.

“Lakmé’s success in India despite increased competitive intensity has been due to the multi-pronged approach of the brand,” says Hindustan Unilever.

This approach includes manufacturing products that are specially crafted for Indian skin, for example in terms if the colour tones that are better suited to Indian complexions.

It also says that its “wide range of products that span across categories and the price pyramid” help to generate strong business, as well as having a wide network of sales points.

“Consistent investment behind the brand” and its title sponsorship of Lakmé Fashion Week, a biennial fashion show in Mumbai, one of the biggest such events in India, are other factors that boost the company’s profile, according to Hindustan Unilever. The Bollywood star Kareena Kapoor is the brand ambassador for Lakmé.

With Bollywood having a major influence over consumers, many companies opt to promote their products by getting actors and actresses on board to endorse them.

Emami, which is based in Kolkata, has Bollywood stars including Amitabh Bachchan and Shah Rukh Khan promoting its products. Emami signed up Khan to endorse its Fair and Handsome brand, a skin fairness cream for men. Skin lightening creams are popular in India, with fairness being widely considered more attractive in the country. Between 30 and 35 per cent of users of skin fairness creams in India are men, according to Emami.

But Indian cosmetics manufacturers have been negatively affected by the entry of global names, says Chytra V Anand, the chief executive and consultant cosmetic dermatologist at Kosmoderma Clinics, an Indian skin, hair and laser clinic with branches in Bangalore, Hyderabad and Chennai.

“As Indians still have a penchant for imported products, this feel has translated into better sales for foreign companies helping them break even faster,” say Dr Anand. “Slowly though this mentality is changing and people are looking for quality. The impact has been good as it has made the local companies invest in quality and control and research.”

Meanwhile, foreign companies are increasingly focusing on expanding in India.

L’Oréal is aiming at becoming a $1 billion company in India by 2020 and plans to make India one of its top five markets over the next few years.

“Men’s grooming and skin care is booming, and we expect fast growth in this category to continue in the next decade,” Jean-Christophe Letellier, the managing director of L’Oréal India told the Press Trust of India.

“We hold a small per cent of the market share. We have a lot of work ahead of us to increase penetration.”

L’Oréal has also invested heavily in its research and development activities in India.

“India is one of five hubs globally where we conduct research,” says Mr Letellier. “Besides the unit in Pune, we have set up a manufacturing unit in Himachal Pradesh in 2013 for hair colour.”

Shrutidhar Paliwal, the vice president and head of corporate communications and affairs at Aptech, an education and training company based in Mumbai which has teamed up with Lakmé to provide beauty training courses to Indians, explains that the sector is actually “one of the fastest-growing providers of job opportunities” in India.

Employment in the beauty sector in India is expected to grow at a compound annual growth rate of 20 per cent between 2013 and 2022, according to the report by KPMG and the National Skill Development Corporation.

“Beauty and grooming is among the most lucrative and glamorous career opportunities for young people,” Mr Paliwal says.

The rural Indian market presents a huge opportunity for growth for cosmetics companies.

The “use of beauty and personal care products is no longer limited to urban India”, Euromonitor says. “Awareness of such products has strongly increased due to television commercials, celebrity endorsements, social media campaigns and print media.”

Another driving factor of rising spending on cosmetics is the increasing popularity of premium brands, according to Euromonitor.

“The growth of premium brands in India can be attributed to higher disposable incomes among urban consumers, which allowed them to spend their discretionary incomes on premium product,” it says.

Sagarika Dutta, 26, a public relations professional based in New Delhi, says that she is happy to pay more for an upmarket makeup brand, with MAC being her favourite.

“It’s a bit expensive but then it’s ‘the brand’.” she says. “I have always been very particular about buying beauty and make-up products since new brands are cropping up all the time, let they be foreign brands or Indian brands.”


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