India’s per capita spending on beauty and personal care items is growing. The cosmetic industry in India is not restricted to female consumers anymore. It is increasingly attracting male consumers. Health care and wellness products including skin care and anti-ageing treatments and products are increasingly attracting male consumers.
India is also witnessing a rise in the demand of colour cosmetics and fragrance products. According to a KPMG report, the size of India’s beauty and wellness market would be around Rs. 80,370 crore by 2018. The market analysts are expecting that the cosmeceutical market will grow annually by 8.4% (CAGR 2018-2021) and it is expected to register annual growth of 25% touching $20 billion by 2025. A joint study by ASSOCHAM and MRSS India states that the market size of India’s beauty cosmetics has the potential to touch $35 billion in the near future.
The Indian cosmetic market is witnessing strong competition with domestic, as well as foreign brands competing intensely in various segments. Post-1991, foreign brands entered the Indian cosmetic market and many have performed increasingly well. The rising awareness regarding healthcare and wellness and the increasing popularity of personal and professional grooming is pushing the rapid growth of this industry. Apart from the sale of cosmetic products, beauty care as a service sector is also generating substantial employment and entrepreneurship opportunities in India.
Traditionally, superficial beauty treatments were only used for occasional styling and make-up requirements. It did not recognise that beauty is actually an outcome of long-term care and grooming. Many of the traditional treatments exposed the users to the potential dangers of chemical treatments. The Indian market has now awakened to the potential risks of such beauty treatments. Resultantly, there is a shift in demand towards herbal products and organic products. Famous beautician Shahnaz Husain, who owns a range of frontline beauty products, told BE, “The growth rate of the herbal beauty business is 40% higher as compared to chemical beauty products. In fact, it is the herbal beauty care products that are driving the growth of the beauty business in India.”
The present trend of using herbal products is not limited to the Indian market. Herbal products based on Ayurveda is being increasingly used by global beauty brands like Avon, Burberrys, Calvin Klein, Christian Dior, Estee Lauder, L’Oreal, Max Mara, Body Shop, Maybelline New York, MAC, and Bobbi Brown.
The top three players in the Indian market - Hindustan Unilever, Colgate-Palmolive India, and L'Oréal India – are all foreign collaborations. Major domestic players include Godrej Consumer Products, Dabur India, Marico, Wipro Consumer Care and Lighting, Emami, and Patanjali Ayurved. Indian cosmetics and beauty products segment is witnessing steady growth and can be divided into five major categories like body care, face care, hair care, hand care, and colour cosmetics. Over the last five years, the growth figures have reached 60% for cosmetic products, 35% for beauty salons and 5% for cosmetic treatments. The Spa Association of India evaluated that the spa industry is currently valued at around Rs. 11,000 crore. It is estimated that the salon and spa business as a whole account for 31% of the beauty market. On the other hand, the retail sector for beauty products is also flourishing. Malls are becoming popular shopping destinations, not only in metro cities, but also in Tier II cities. Vivek Bali, COO, Sephora, a global beauty brand, stated, “Around 60% of our revenue comes from the tier – I and metro cities. And the balance 40% actually comes from all the other cities.”
The retail beauty and cosmetics market in India currently estimated at $ 950 million and is trying to reach at $2.68 billion by 2020. Another important driver of the cosmetic market is the remarkable growth of e-commerce platform. According to Pushkaraj Shenai, CEO, Lakmé Lever, “There are three factors driving this growth, which are increasing disposable income, more women coming into the workforce, and rising number of social occasions as compared to the past.” The Indian cosmetic industry is poised for greater growth, riding high on positive consumer preferences and indigenous, innovative products regularly entering the market.