L’Oréal SA and Shiseido lay emphasis on India’s growing position as one of the key growth drivers in the global beauty sector. The two major cosmetics giants predict that the Indian beauty market can reach a €1 billion revenue mark in the next few years.
L’Oréal has India as its fifth largest market in the professional products division, with significant untapped potential across the country. The increasing affinity towards beauty products is a lucrative characteristic.
A Bird’s Eye Market Overview
Nicolas Hieronimus, the CEO at L’Oréal said to the investors, “From a €500 million business today, I think we can take it to €1 billion in the next foreseeable future. So I am very excited about India. I don’t think India will never ever look like China, but it’s still a very promising market for us. We have high ambitions. Middle classes are rising in a major way. It’s still not as developed as we would like in terms of distribution, but it’s really accelerating and our shares are growing.”
L’Oréal’s Footing In India
Omar Hajeri, president, professional products division at L’Oreal, said, “In India, with 50,000 salons, we are covering 400 cities out of 800. We still have a strong untapped potential across the country. We firmly believe that India will soon become our third country worldwide.
India and Indonesia alone will see an incremental 250 million people join the global middle class by 2030. And they are very quickly becoming very beauty-savvy, looking for increasingly sophisticated beauty routines.”
According to a report by Redseer Strategy Consultants and Peak XV, India’s beauty and personal care market will expand the fastest as
compared to its counterparts. The compounded growth rate is projected to be 10% between 2022 and 2027.
India is expected to account for nearly 5% of the global growth opportunity. It has per capita spending of $14 in this category, which is lower than $38 in China and is monumentally less than $313 in the US.
Further Growth At A Glance
The beauty and personal care market is growing rapidly in India. It is twice as fast as fast-moving consumer goods-led brands. Specialised beauty and personal care-focused players have become more integral. The previous year, Shoppers Stop joined hands with Japanese firm Shiseido and launched its premium beauty brand Nars Cosmetics to India.
As a result, Shoppers Stop’s beauty segment achieved its highest ever quarterly sales last quarter and accounted for 18% of its overall sales.
“We have entered into India with the Nars makeup products and it is showing much better sales than we had expected. And we expect that Nars cosmetics in India will be another growth driver, CFO of Shiseido,” Takayuki Yokota said.
Other focused beauty brands like Mamaearth, Nivea and Nykaa, currently have 33% share, which is expected to expand to 42% in the next five years. While established firms such as Hindustan Unilever Limited (HUL) and Procter & Gamble will see their share fall to 58% by 2027.