The Indian cosmetics industry has witnessed rapid growth over the last couple of decades. With every passing year, the range of cosmetic and beauty products in India has widened tremendously. Beauty product manufacturers in India have mostly been catering to the great demand for cosmetics and toiletries that fall into the low- or medium-priced categories as the greatest demand in India always revolves around economically priced products.
Recent cosmetics business market analysis reveals that many international companies are now outsourcing cosmetics to India and that the cosmetics market in India is growing at 15-20% annually, twice as fast as that of the U. S. and European markets. The growth rate in the cosmetics market reflects increasing demand for beauty care products in India.
However, even with the massive surge in the popularity of cosmetic products, statistics show that the average Indian consumer spends much less on cosmetic products than consumers in any other part of the world.
This also implies that the Indian cosmetic industry has an even greater potential for growth than it is currently experiencing.
The Japanese cosmetics market is still the largest Asian buyer, but the growth rate is reaching a stable condition. China, the second largest in Asia Pacific, is witnessing increased demand due to improving lifestyles and rising disposable income of the population. The South Korean market is growing at a faster rate than developed regions. There is a clear trend of the market heading toward premium cosmetic products. The younger populace is looking for general skin care and hair care products while the older generation has more specific needs for their cosmetics products.
Global cosmetic giants are attracted to India’s favorable demographics. The modern, urban Indian women are becoming increasingly conscious about their style and looks, with great emphasis on lightening of skin tone. Skin care and color cosmetics have witnessed solid growth for the last few years, with more than half of the skin care market comprising skin lightening creams. Lip products form a majority of the color cosmetics market. In India, small pack sizes are very popular as they offer a lower cost and the chance to try new products.
Hindustan Unilever is India’s largest cosmetics company, followed by L’Oréal.India’s Story
Driven by growing consumption in rural and semi-urban areas, the fast-moving consumer goods (FMCG) market is set to double from $14.7 billion in 2008-09 to $30 billion in 2012, according to a report by Associated Chambers of Commerce and Industry of India (ASSOCHAM), an industry lobby.
“The FMCG sector will witness more than fifty percent growth in rural and semi-urban India by 2010,” according to a study titled “Prospects in the FMCG sector,” recently made public by ASSOCHAM. The Indian FMCG sector has grown to become the fourth largest sector in the economy with a market size in excess of $14.7 billion.
Skin care and cosmetics account for more than Rs.18.5-billion market size while the hair care market is worth more than Rs.80 billion.
Among the entire range of products that fall within the territory of the Indian cosmetic and toiletries market, the most popular items are color cosmetics, of which nail varnish, lipsticks and lipglosses account for the most sales. In this area, popular local brand names include Lakme and Revlon. Skin care cosmetics experienced a relatively slower growth, and products such as anti-wrinkle creams, cleansers and toners, for instance, are not as popular as facial creams, moisturizers and fairness creams in this genre. Companies like Pond’s and Fair & Lovely rule the roost in this segment.
Half a decade ago, when celebrated Indian film actor Shah Rukh Khan took a dip in a bathtub to endorse Lux, he did much more than just promote a soap brand. He set a precedent.
Back then, the male grooming market was almost...
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