An analyst from Euromonitor in India stated, The per capita total income of Indian consumers is projected to increase by 138% in real terms between 2021 and 2040, thereby boosting their disposable income and ultimately providing further room for beauty brands to penetrate the Indian market. Additionally, due to the heightened influence of social media platforms and shifts in the lifestyle of millennials and younger generations, there has been a greater demand in the country for makeup products.
The beauty giants are increasing their investments in the Indian market
Demands serve as the best driver for investments. With the rapid growth in market size and demand in the Indian beauty market, global beauty industry giants have shifted their focus to India, the country with the world’s largest population.
Unilever was among the first beauty industry giants to enter the Indian market. Its listed subsidiary in India (HUL) holds a dominant position in personal care products like hair care, skin care, bathing, and beauty, making it the largest fast-moving consumer goods company in the country.
Additionally, Maybelline, which delisted last year due to bankruptcy concerns, plans to double its business in India in the 2023 fiscal year, reaching 4 billion rupees. The company intends to open more stores. Maybelline operates in India through a partnership with local player Modi-Mundipharma Beauty Products. It plans to increase its store count from 300 to 600 and expand its outlets from 1,000 to 4,000. Moreover, to diversify its product portfolio in the Indian market, the American cosmetics company is contemplating the launch of Maybelline-branded perfumes.
L’Oréal and Estée Lauder, among other beauty brands, are actively venturing into the Indian market. L’Oréal has introduced 15 beauty and personal care brands in India, including L’Oréal Paris, Kérastase, and Maybelline New York, among others. Additionally, the company has established an advanced research center in India, focusing on the research and development needs of haircare, skincare, and makeup. In November of this year, L’Oréal launched CeraVe in India, collaborating with leading dermatologists and experts across the country.
Apart from introducing new brands, L’Oréal has also acquired several Indian homegrown brands. In 2013, they acquired Mumbai-based skincare brand Cheryl’s Cosmeceuticals, marking their first acquisition in India. In April of this year, L’Oréal made a strategic investment in DSG Consumer Partners, a company specializing in investing in consumer brands in India and Southeast Asia. DSG has invested in enterprises like 82°E, a skincare company founded by Bollywood actress Deepika Padukone.
Estée Lauder announced its collaboration with Indian beauty e-commerce platform NYKAA in 2022, launching the BEAUTY&YOU India program aimed at supporting the development of India’s domestic beauty industry and expanding visibility and influence through brand nurturing. As early as 2008, Estée Lauder acquired a 20% stake in Forest Essentials, a high-end skincare brand based in India.
In mid-October, Shiseido launched its first cosmetics brand in India in nearly a decade, introducing the popular NARS makeup collection in local beauty stores. On October 18th, the Shiseido Group announced the opening of its first Shiseido brand (Shiseido Ginza Tokyo) offline boutique in Mumbai, India, and appointed Indian Bollywood actress Tamannaah Bhatia as the inaugural brand ambassador for Shiseido skincare series in India.
Furthermore, LVMH’s luxury retailer Sephora announced a partnership with Reliance Retail Ventures to expand in India’s rapidly growing beauty market. They plan to leverage RRVL’s extensive retail network to introduce exclusive brands and products. In May last year, L Catterton, LVMH’s consumer-focused private equity firm, led the Series D funding round for Sugar Cosmetics, one of India’s largest omnichannel beauty companies.
The Financial Times states that beauty brands and companies from around the globe are being drawn to the world’s most populous country, betting on India’s young shoppers and ever-growing affluence, believing this will drive long-term expansion in the Indian cosmetics market.
The next breakthrough beauty brand could from India
One significant characteristic of the Indian cosmetics market is its diverse consumer base. The country’s rich cultural heritage and diverse population structure shape a market where beauty ideals vary significantly across different regions, ethnicities, and socioeconomic backgrounds. The beauty industry in India caters not only to urban elites but also to the masses in semi-urban and rural areas, offering a wide array of products to meet diverse needs and preferences.
Cultural influences play a crucial role in shaping beauty trends. Traditional beauty practices like Ayurveda and natural therapies coexist alongside modern beauty innovations. Ayurvedic products emphasizing natural ingredients and holistic health are highly popular among consumers seeking authenticity and health-centric solutions. The principles of Ayurveda might be one of the significant reasons for India’s beauty industry to make its mark on the global stage.
Post-pandemic, there’s a growing interest among consumers in self-care. Indian-style beauty and the alternative medical system of Ayurveda resonate with a global audience more extensively than ever before as consumers increasingly prioritize self-health.
Ayurveda, one of the oldest existing traditional medical systems, originates from the Sanskrit terms “Ayur,” meaning “life,” and “Veda,” meaning “knowledge.” Ayurveda emphasizes the interconnectedness of an individual’s mental, physical, and spiritual states, advocating balanced lifestyle choices and rituals as means to a healthy life and as preventive and therapeutic measures against diseases.
In the Indian market, several well-known Ayurvedic cosmetic brands have emerged.
Kama Ayurveda was launched in New Delhi in 2002 and has since attracted a consumer base due to its focus on holistic health and Ayurvedic products. This brand not only gained popularity within India but also garnered attention from international beauty giants. In September 2022, the Spanish fashion and beauty conglomerate Puig acquired a majority stake in Kama Ayurveda.
It is reported that Kama Ayurveda’s sales have surged ninefold over the past decade. The brand has a distribution network across India, operating 62 standalone stores and 145 shop-in-shops. Starting from June 20th this year, Kama Ayurveda began selling in the UK through its own e-commerce website and plans to establish a physical store in London.
Another Ayurvedic beauty brand, Forest Essentials, established in New Delhi, prioritizes extending its Ayurvedic philosophy globally. With revenues exceeding $50 million and a compound annual growth rate of 40% over the past three years, the brand operates 142 standalone stores in India and retails through outlets such as Sephora, Nykaa, and Tira Beauty.
In June this year, fashion designer Rachel Roy launched her first cosmetics line, a Ayurvedic beauty named “Ancient India by Rachel Roy,” directly selling to consumers through her website.
The beauty products offered on the brand website include a premium moisturizer, facial oil, serum mask, and facial serum that feature key ingredients like niacinamide and hyaluronic acid. The moisturizer contains active ingredients such as turmeric, lotus flower, ginger, carrot root, and pentapeptide. The serum mask is formulated with babchi, triphala, and snow mushrooms, which are known for their anti-inflammatory and antioxidant properties that help to restore the skin’s natural balance and provide a solution for inflammatory skin conditions like rosacea, eczema, and acne.
Additionally, Ranavat, an Ayurvedic skincare and haircare brand founded by American fashion figure Michelle Ranavat, has expanded its influence by entering well-known retailers like Sephora, Goop, and Harrods in the first half of this year. The brand offers a range of facial serums, massage tools, candles, hair oils, and more. Ranavat products contain a blend of ten herbs called dashmool, along with South African marula oil and castor oil, aimed at promoting hair and scalp health. The brand has been working on a comprehensive care regimen, including shampoos, conditioners, and serums.
In conclusion, India’s beauty market serves as a melting pot for traditional, innovative, and diverse consumer preferences. Its journey from ancient practices toward modernity reflects a dynamic industry that continues to evolve to meet the needs of a diverse populace. The distinctly Indian Ayurvedic products not only attract local consumers but also garner the attention of entrepreneurs in the international market. Perhaps, as Estée Lauder has suggested, “The next breakthrough beauty brand could emerge from India.”
