Personal Care-India

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Outlook for personal care ingredients industry: An Indian perspective The Indian personal care ingredients (PCI) industry has taken rapid strides in the last few years, as more and more personal care products (PCP) incorporate specialty ingredients in their formulation. However, a comparison with per capita consumption of PCP in China reflects the largely untapped nature of the Indian market. Favorable demographic factors and increasing beauty consciousness indicate high future demand for personal care products and specifically for active ingredients. Key trends, including nanotechnology and green chemistry besides others, will influence the strategies of PCP and consequently PCI players. The eventual winners would be those who ensure better value offerings to meet the needs of the Indian consumer say Pratik Kadakia, Abhishek Nigam and Ashwin Rao of Tata Strategic Management Group Chemicals & personal care From soaps and shampoos in the morning to overnight repair face creams, from sunscreen products in summers to moisturising lotions in winters; personal care products literally touch our daily lives. The personal care products we use are in some measure the signature of our lifestyles and standards of living. The awareness about ubiquitous personal care products is perhaps matched only by the total ignorance or misinformation about the chemicals that make these products what they are. From the metallic salts of fatty acids used to make the common bath soaps to the high end cosmoceuticals that combine the beauty related properties of cosmetics with the functional benefits of pharmaceuticals, chemicals (whether derived from natural or synthetic sources) are an integral part of personal care products. Specialty chemicals are widely used in personal care products as active ingredients in the form of emollients, foaming agents, and stabilizers. Their performance characteristics like thickening, foaming, imparting smoothness and conditioning are the key functionalities sought in several personal care products. Before we delve into the personal care ingredients (PCI) industry, let us present an overview of the Indian personal care products (PCP) market and its key trends. Indian personal care products market 31%

Each of these segments exhibits its unique trends and growth patterns. For example, the largest segment of personal hygiene products, largely dominated by bar soaps has grown at ~5% p.a. over the last five years. In comparison, the second largest segment, hair care products has seen a much higher growth of ~9-10% p.a. during the same period. The skin care market is relatively smaller and is growing at a relatively high rate while moving away from basic creams and moisturizers to specialized products such as anti-wrinkle and dark circle removing creams. For example, the antiageing segment, though only 2% of the skin care market has been growing at a rate of greater than 90% p.a. over the last few years. Key trends and growth drivers in India As in other parts of the world, the driving force behind personal care products has evolved considerably in India. Starting from purely health notions and moving on to fitness, the current Fig 1: Segmental breakup of personal care market

6% 1% 16% 46%

The personal care products (PCP) market in India is estimated to be worth ~USD 4 Bn p.a. Personal hygiene products (including bath and shower products, deodorants etc.), hair care, skin care, colour cosmetics and fragrances are the key segments of the personal care market (Refer Fig

Bath & shower products Skincare Fragrances
Source: Morgan Stanley Report
© Tata Strategic Management Group

Haircare Colour Cosmetics

1).
1 Tata Strategic Management Group

Fig 2: Demographics & Economic Drivers, India vs China
4,429
4,363
Personal disposable income per household (USD)

6,250 7,307

178

219

Female population- 25 to 44 years (Mn)

191 217

1,166 2008 India 2008 China
Source: EIU, CIA world fact book
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