L’Oreal SA and Shiseido, two global giants in the cosmetics industry, have said that India is rapidly emerging as a cornerstone of their growth trajectory. This trend is fueled by India’s expanding population and growing penchant for beauty products.
L’Oreal noted that India ranks as its fifth-largest market within the professional products division, which primarily caters to salon-based sales.
“In India, with 50,000 salons, we are covering 400 cities out of 800. We still have a strong untapped potential across the country. We firmly believe that India will soon become our third country worldwide,” Omar Hajeri, president, professional products division at L’Oreal, told investors.
“India and Indonesia alone will see an incremental 250 million people join the global middle class by 2030. And they are very quickly becoming very beauty-savvy, looking for increasingly sophisticated beauty routines. And we have what it takes to continue to outperform. Our well-established local footprint enables us to better understand and cater to consumers’ needs,” he added.
Continue Exploring: SHISEIDO appoints Bollywood star Tamannaah Bhatia as its first brand ambassador for skincare range in India
According to a report by Redseer Strategy Consultants and Peak XV, India’s beauty and personal care market is set to undergo the fastest expansion among comparable countries in terms of size. The compounded growth rate is projected to reach 10% between 2022 and 2027, reaching $30 billion. In contrast, China’s market is expected to grow by 7%, and Indonesia’s by 8% during the same period. Despite India’s significant growth potential, per capita spending in this category remains lower at $14, compared to $38 in China and a fraction of the $313 seen in the US.
In India, the beauty and personal care market is experiencing growth at twice the rate of fast-moving consumer goods-led brands, highlighting the importance of specialized players focused on beauty and personal care. Recently, Shoppers Stop joined forces with Japanese company Shiseido to introduce its premium beauty brand Nars Cosmetics to the Indian market.
“We have entered into India with the Nars makeup products and it is showing much better sales than we had expected. And we expect that Nars cosmetics in India will be another growth driver. So we would like to take a bold challenge in Asia-Pacific regions as well,” chief financial officer Takayuki Yokota said during an earnings call.
Even for Shoppers Stop, the beauty segment reached its highest quarterly sales ever last quarter, representing 18% of its total sales.
Continue Exploring: Shoppers Stop betting big on beauty segment, targets to open 100 stores
According to the report, specialized beauty brands like L’Oreal, Mamaearth, Nivea, and Nykaa currently hold a 33% market share, a figure projected to rise to 42% over the next five years. Meanwhile, established companies like Hindustan Unilever Limited (HUL) and Procter & Gamble, which currently dominate two-thirds of the market, are expected to experience a decline in their share by 9 percentage points, down to 58% by 2027.
Last month, HUL’s Managing Director, Rohit Jawa, emphasized that prioritizing the development of beauty and digital capabilities is crucial and holds disproportionate significance for the company’s future in the country.
Continue Exploring: Hindustan Unilever prioritizes beauty and digital capabilities in strategic restructuring for future growth