The legendary parable in the fable, “Mirror, mirror, on the wall, who is the fairest of them all,” sought to highlight the role of beauty and youthful appearance, and with this trend becoming widespread in our country, too, it has created a boom in the cosmetics industry. And, in a bid to leverage the long-term growth opportunities in the country, a range of MNC beauty and allied brands including Italy-based Bottega Di Lungavita, Australia-based Natio and Bobbi Brown have entered the local market over the past six to eight months.
And, its not just shoppers in metros who are purchasing a range of beauty-related products, but the mushrooming of salons in smaller towns as well as evolving consumers in the hinterland who are driving the expansion of this sector. This, in turn, has helped the domestic cosmetics industry which has annual sales of Rs 29,000 crore and expanding by more than 10 per cent per annum, as per industry estimates.
Expansion in hinterland
It’s no surprise that with a consumer boom underway in smaller towns, foreign brands are also increasingly making their repertoire available amongst consumers in this segment. For instance, Bottega Di Lungavita has tied up with New Delhi-based businessman Arjun Khurana, and the 30 point-of-sale (POS) that have been set up are mainly focused on UP, Punjab and north eastern region. In addition, plans are on the anvil to expand this distribution network via five more POS, shortly. Khurana, said, “We need to create a world-class experience for consumers.”
Similarly, Spain-based Skeyndor which has an alliance with Ekta Cosmetic is growing by 100 per cent each year, and that has been possible via its distribution network on a pan India basis. Ravi Mittal, Managing Director, Ekta Cosmetic, said, “The purchasing power of consumers in smaller towns is quite large.”
Apart from that, players like US-based Avani Dead Sea Cosmetics derive nearly half of their sales from online distribution channels, and demand from tier-II towns has been encouraging. In addition, even well established players like L'Oreal, Revlon and Maybelline are expanding their presence beyond metros.
Experts also stressed that for long-term success, the products offered in the local market should be relevant for Indian skin tones and lifestyle along with a suitable pricing strategy. However, these cosmetic brands highlighted the high operating costs, especially related to store rentals and allied logistics costs amidst their pan India expansion.
Clearly, the cash registers are abuzz in the beauty-related segment.