How are Beauty-Focused Platforms Changing The Retail Game in India 
How are Beauty-Focused Platforms Changing The Retail Game in India 

Over the past decade, digitalization has changed almost every industry in the world. It is, therefore, natural to wonder how this has affected the beauty industry in so many ways, from developing more creative marketing strategies to promoting it on various platforms to fostering trusting relationships with clients.

The personal care market has grown dramatically in the last few years and now dominates beauty e-commerce. Your question must be, "How?". Well, many factors are at play. The expansion of digitization in the industry is the first. Online shops developed certain modifications to their operations during the crisis that worked out well for both the businesses and the customers. Making the look and feel of the product as good as going into a physical store was one of the key adjustments made.

Since beauty items are typically trusted to be purchased in stores, customers favor an enriched digital experience. Such strategies help brands draw in potential customers who will buy their products online.

The touch and feel of conventional cosmetic items like lipstick, eye lenses, and other makeup products can now be replicated through technological breakthroughs in e-commerce. As a result, technology helps to close the distance between the seller and the buyer.

How Big is the Beauty E-commerce Market in India?

●    A Redseer analysis predicts that by 2025, e-commerce in India will expand at a CAGR of 25 percent and come close to breaking into the top five global marketplaces by revenue.

●    As per Statista, in 2020, the size of the Indian market for the beauty and personal care industry was valued at one trillion Indian rupees. The market size for this industry is likely to increase to about two trillion Indian rupees by the year 2025. In the beauty and personal care market, 10.7 percent of total revenue will be generated through online sales by 2022.
●    The number of online beauty shoppers in India is expected to cross 122 million by FY25, says a recent study.

The beauty e-commerce sector has been inundated with cash since the launch of platforms like Nykaa on a route to the everyday consumer, and given the overwhelming majority of the increase in customers, the time is right for the next stage of expansion.

Factors Giving Rise to the Growth of E-commerce in the Cosmetic Industry

Influencers - Creators have built huge fan bases through social media since the internet and smartphones have made it easy for them to reach new audiences.

They are commonly referred to as ‘influencers’. These content creators establish ideas about your product or service and produce tutorials, professional counseling, and brand-encouraging content for the general public. With 93 percent of customers who purchase beauty items checking in more than once a month, this showcases the amount of time spent online.

In recent years, influencer marketing has gained strength in the beauty and self-care market. Influencers are able to draw new and potential customers to firms because they have devoted followers who consider them authorities in their field of expertise at a time when social media is at its most popular.

By reading their reviews, buyers can assess how they used the product and are able to develop greater confidence and trust in the company, which is something that businesses perceive as a growing possibility to profit from.

This method has been used by companies like MamaEarth, which provides natural and chemical-free skincare products, to promote their goods through influencer marketing by running a large number of champions on social media sites like Facebook, Instagram, and YouTube.

By investing more in advertising and marketing initiatives, the company's growth from the fiscal year 2019 to the fiscal year 2020 was multiplied by 6.5.

In order to increase sales, platforms like Amazon also introduced the #FountItOnAmazon campaign, in which influencers propose or promote their favorite things to the audience. This method increases audience trust in the brand.

Personalization - Offering personalized services to online shoppers is the main way cosmetic companies draw in new customers.

Leading cosmetic businesses are currently using their data scientists, technologists, and beauty specialists to create online beauty assessment systems. They are able to offer their clients in-person beauty consultations thanks to these technologies.

This is merely an illustration, but businesses are utilizing this level of personalization to close the gap between their online stores and customers all around the world. It's interesting to see that most cosmetic companies are outperforming the experience a customer may have at a physical makeup station.

Personal Care companies are gathering information on new clients and preserving it for existing ones in order to offer them a special and specialized online shopping experience catered precisely to their requirements.

Cost-Effective Pricing - Another important aspect that is altering the beauty sector is competitive pricing. For instance, clever pricing tactics aid companies in maintaining an advantage over rivals and dominating the worldwide market.

Unbelievable as it may seem, finding the best products at the lowest prices is the main goal of online shoppers. Customers prefer purchasing online over in traditional brick-and-mortar stores since the identical item is typically offered at significant discounts. Businesses base their marketing choices on the actions of their customers.

It would be accurate to claim that cosmetic companies use cost as a smart marketing tactic to draw clients. The truth is that they have ample margins to do so. The companies in this market are capable of competitively modifying their prices without sacrificing their profit margins. Simply put, they can maintain competitive pricing while making enormous profits, which is a win-win situation.

D2C Model - Recent years have seen a rise in the popularity of the direct-to-consumer business model. As a result of the lockdown that has been implemented in the majority of countries, brands have discovered a new technique to market directly to customers.

The acceptance of the D2C model has been aided by this move or the transition from direct selling through their own websites to more conventional channels.

In the US and other countries, the D2C model is already popular since it offers consumers personalized, need-to-order products. Many high-end brands also offer to subscribe and save deals via subscription boxes or monthly boxes, which create a wonderful trust between consumer and brand that results in a satisfied customer.

These models are being used by Indian companies, including Sugar, Ustraa, and Bombay Shaving Company, which are growing in popularity and prominence.

The Global Endeavor - The e-commerce market for beauty products operates on a global scale; it is no longer restricted to customers in a single state or nation. Customers can now purchase their preferred products, whether they are domestic or foreign, instantly via their mobile phones.

Because of beauty e-commerce, brands can now reach customers all over the world. It is a fantastic opportunity for businesses to expand internationally. For aficionados of makeup, domestic brands like Mac, Bobbi Brown, Too Faced, etc., are easily available and have become household names.

Technology - The beauty industry is undergoing rapid change, from 3-D printing to AR/VR (augmented reality/virtual reality) to AI in skincare. As a result, demand-driven individualization is critical to providing better beauty services to users.

The current need is for scientifically supported beauty. Whether it is a video consultation with a dermatologist, aesthetician, or cosmetic surgeon, businesses are exploring ways to connect customers with healthcare professionals in order to provide tailored skincare prescriptions.

AR The use of VR and AR in the beauty industry allows for a greater level of individualization. The relationship between online and offline buying is greatly enhanced by these technologies.

Older firms are also reinventing themselves in the same space where newer brands are immersing themselves in cutting-edge technologies such as automatic hair analysis, foundation shading using artificial intelligence, virtual try-ons, and smart mirrors.

What are the Driving Factors Behind the Beauty E-commerce Category Sales

Digital Presence:  The more traction a brand gets online, the more chances it has to grow.

Innovation in Products: Users' requirements are increasingly taken into consideration when developing new products. By utilizing techniques like surveys, internal research, customer feedback, and many more, brands are concentrating on how their products might be more beneficial to consumers.

Pricing Strategies: Because there are many options available on the market for a particular product category, companies are compelled to implement competitive pricing while still considering both growth and profit.

Final Thoughts

The dynamic nature of e-commerce and customers alike have forced the beauty sector to acknowledge that old business practices are no longer effective. The new growth levers are an omnichannel approach and a reactive approach to product and consumer engagement. The majority of brands have greatly expanded their capacity for online and digital marketing. One significant development that is likely to stick around is the potential for digitally communicating with customers, particularly on social media and video platforms. 

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