Estee Lauder Global Presence

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Beauty industry allres with its charisma

It is often said that beauty lies in th eeyes of the beholder, well not any more. Beauty is a relative term and anyone can beautify with the apt use of make up. It enhances our appearance and helps to get the stunning look. We check out this glamourising industry.
The cosmetics industry is valued at Rs 712 crore (Approx.) at present, and is expected to grow to Rs 1,514 crore by 2012. India, along with China, is one of Asia’s largest cosmetics markets, and has had a growth of about 60 per cent since the late 1990s, according to a Euromonitor report. People today do not mind shelling out an extra penny, but prefer to buy the best, be it apparels, shoes, cosmetics or perfumes though its consumption levels are very low compared to other nations despite high penetration levels for cosmetic products.  

Unorganised to organised

The Indian cosmetics market is full of imitations of the original products, which are available at a much lower price than the genuine ones. These imitations could be made out of cheap materials which can be at times harmful for the skin. The growing need to look good, along with the above mentioned reasons, has led people to purchase more of the branded products, leading to a shift from an unorganised sector to an organised one. The increasing availability of domestic and international brands and greater product availability at affordable prices has led consumers to move away from using products from the unorganised channel.  

Boost factors

India is a very price sensitive market and the low per capita expenditure on personal products has offered impressive growth opportunities to this industry. Greater interest in personal grooming, along with increasing disposable incomes has helped the industry reach this stature. Moreover, with enhanced living standards, growing competition, marked shift in consumer attitude towards spending, coupled with aspirational lifestyles and quality products available at affordable prices, cosmetics have grown from being luxury products to necessity products. The increase in the number of working women has definitely led to an increase in the usage of cosmetics. Increased exposure to international splendour, fashion and lifestyle trends all put together is giving a great impetus to the industry. In a nutshell, N V Sivakumar, Leader Retail Practice, PricewaterhouseCoopers says, “The cosmetics and perfume segments are witnessing growth due to a variety of supply and demand drivers. Factors increasing the growth of these segments include increasing incomes, the growth of modern trade, Indian consumers’ desires to look, feel and smell good, increased emphasis on personal grooming and the impact of global lifestyle influencers.” We have also witnessed an enormous role played by Bollywood in the growth of this industry. Actors and actresses are the youth style icons and various companies have roped them in as brand ambassadors to create greater attraction for their products. The growth of the industry is leading to various innovations, to further catch the attention of more people.

Extension to men’s market

A fair complexion tends to be one of a woman’s most prized assets, but men are not far behind in the league. Innovation and aspiration have led to a rise in the men’s grooming market, which is said to be perched at about Rs 1,000 crore. Though the product range for men is not as elaborate as that available for women, it includes shaving creams, aftershaves, fragrances and products for hair styling and skin care. Retailers are fast catching up and introducing new products to lure the male clients. The growth of this category is being attributed to the depiction by Bollywood actors, combined with the exposure to international trends. Many leading MBOs are also granting more shelf space to men’s products.  

Brand accessibility

The cosmetics industry is dominated by the key players who have a strong hold over the market. Hindustan Unilever Limited (HUL), Procter & Gamble, L’Oréal, Garnier, Revlon, Maybelline, Godrej group, Dabur and Lakmé are quintessential elements of this industry. Various others are Lotus Herbals, L’Occitane, Bare Body Essentials, ColorBar, Biotique, etc. Many multinationals are also introducing product ranges from their international portfolios to the Indian market, to capture a greater market share. Direct sellers Amway, Avon and Oriflame also play an important role in the Indian cosmetics market, since their direct selling systems manage to reach even remote areas. Various international brands like H2O, Estée Lauder, Davidoff, MAC, Calvin Klein, The Body Shop, Marks & Spencer, Moschino, Mary Kay and many more are making their presence felt on Indian shores. Most of the brands however are prevalent through MBOs rather than EBOs, however that does not signify that they do not have presence as stand alone stores.  

Future growth

The future prospects for this industry seem to be very good. With increasing awareness, more disposable incomes and the low per capita spend on cosmetics in the country, this industry will surely soar in the time to come. As the Indian cosmetics industry is still small, compared to international markets; it points that there is greater growth potential.  

Wrap up

India has a strong economic performance and youthful demographic structure, ensuring a great future for this industry. All that retailers need to do to be successful, is price their products well and position them intelligently!

About the Author

The author Seema Arora presently is taking care of retail vertical and writes on retail genres and also on retail business opportunity, retail franchise opportunities and franchise retail.

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