Harnaaz Sandhu has brought attention back to India as a beauty destination by winning the Miss Universe 2021 title in Eilat, Israel. Harnaaz represents the young Indian populace that is ambitious, conscious about personal care and grooming, willing to experiment and has financial leverage to spend while being environmentally and socially conscious. The social media today is taken by storm with the news of Harnaaz winning the title.
India’s cosmetic market was estimated to grow at fascinating CAGR of 9.7% from 2018 to 2023 before the pandemic hit in 2020. Covid19 outbreak curbed the market’s growth rate at 2.3% aggregating the market value at littler higher than $15 Billion till December 2020. However, the revenue is expected to grow at 2.8% in 2022. Further, with the world’s view changing from China and identifying India as next manufacturing destination, India is now a center of focus for global brands both for setting up production and maximize their revenue leveraging the growing consumer base in the country.
The ever growing disposable income among Indian consumers and focus on personal care coupled with sheer volume of the market makes has made India a lucrative market for global brands. There have been significant developments in Indian market from the policy, technology and infrastructure front that has brought India to a point where is considered the next hot market for cosmetics. An opportunity, every brand worldwide must try to utilize.
1. Technology: The government of India since 2014 has taken digitalization as their topmost priority to integrate the nation by providing access to the technology. This has been achieved by partnering with companies such as Google, Facebook, Reliance and others to provide internet and hardware accessibility to remotest areas of the country.
The background for this push from government was being prepared by a growing Indian technology startup ecosystem that took the challenge head-on in creating a technology driven distribution ecosystem through eCommerce despite lack of supporting infrastructure such as roads, government incentives and others.
Thanks to these visionaries, India has now home to Unicorn start-ups that went public this year with their IPO taking the story of India several steps forward. One such company is Nykaa that has captured the imagination of young consumers of cosmetic and lifestyle products in the country. eCommerce giants such as Flipkart, Amazon, Grofers and many others are making this ecosystem stronger by making delivery of products to villages in India a reality; and thus maximizing the consumer base in the country of 1.2 billion population.
2. Infrastructure: The road and transport ministry now managed by Mr. Nitin Gadkari, the Minister of Transport & Highways, is a visionary, who is propelled the infrastructure development in India by leaps and bounds. This enables faster supply and provides accessibility to more areas in the country that were not accessible just a decade ago. Using this infrastructure, the eCommerce and supply chain companies can now take a step forward to step up their distribution to reach out to consumers in smaller towns and villages where the aspirations of consumers are as high as those in urban areas. Thanks to social media and technology, the lifestyle, expectations and willingness to spend money is comparable in both urban and rural India levelling the playing field.
3. Policy: The government of India has been encouraging ‘Make in India’ as part of their India growth strategy encouraging innovations and businesses to come forward across manufacturing, technology and other sectors to strengthen the commercial ecosystem. This has led to emergence of high quality domestic cosmetic manufacturers, both branded and white label manufacturers that international brands can leverage to produce high quality products at fraction of cost.
The government also introduced New Cosmetic Regulations 2020, streamlining the cosmetic registration process in India and to encourage foreign manufacturers to import products. From the ease of business standpoint, it is much easier for international companies to register a business in India with a local partner with minimal share capital.
4. Rise of Domestic Brands: The rise of consumer demand for high quality products has also raised the bar for domestic manufacturers to capture the imagination of their consumers by creating innovative, high quality products delivered using creative, innovations, sustainable packaging and marketing messages. Some of Indian origin brands making international impact include, Dot & Key, Dr. Sheth’s, ENN, Juicy Chemistry, Just Herbs, Neemli Chemicals, Nuskay, Ohria, Pahadi Local, Paro, PureEarth, RAS Luxury Oils, Sova, Vaunt, Vilvah and others.
5. Manufacturing: The Make In India campaign has propelled production of both brands and while label cosmetic manufacturers in India. The decline in interest in China has also pushed Indian manufacturers to leverage the opportunity to invest in manufacturing and increase their capacity. Further, pharmaceutical manufacturers are also leveraging their chemical production know how to foray in to cosmetic products. This creates opportunity for additional capacity to brands who wish to use third parties for manufacturing in India.
6. Aspirational Brand Representatives: Over 560 million Indians are internet users, making it second largest online market. A sea of content streams in everyday from influencers who are loved and followed by millions of Indians. Reaching out to the right audiences has never been easy. However, increase in content also brings clutter; the onus remains on brands to identify target audience, select the right set of influencers and create and differential and compelling messaging to influence the audience to make that purchase.
It is evident that the playground for cosmetic products has been in making in India for over a decade now. The picture is now complete with necessary pieces in place such as policy, infrastructure, technology, capacity, suppliers and consumers, it is time that both Indian and International brands up their game plan for India.
About Author: Oindrila Ghosal is the Director and heads the global innovation and alliances at Artixio. She works with international cosmetic and pharmaceutical brands helping them manage their innovation portfolio and commercialization in global markets.
Artixio helps global brands import their cosmetic products in India with integrated regulatory, compliance, commercial, creative and communication services. For for information, please write to us at email@example.com