Beauty and Personal Care Industry experiences continuous growth year after year at a pretty stable rate throughout the country and overseas. This opens up new opportunities to innovate within this sector and a need for specialized and customized products.
Competition within this sector is increasing day in and day out and a differentiated product along with targeted marketing efforts is the only way to move forward. Beauty and Personal Care Industry is a diverse industry and contrary to common belief is not restricted to cosmetics, hair colour and perfumes. It expands into other categories too like toiletries, skin care, nail art, hair styling, shower and shaving products, nail clippers, spa treatments and many more. Innovators within this industry have come up with advanced products pertaining to specialized uses for every skin tone, texture, allergy, age, hair type and colour, in fact even the time of the day.
Gender specific products are the new fad and taking the market by storm as more and more men are becoming conscious of their looks. The beauty industry is known to be impervious to the economic fluctuations and even though majority of people are price sensitive, quality is majority of the times given preference over price. The rising Per Capita Income is another factor making this preference a reality.
Brand loyalty within this segment is generally high however customers are open to trying new products that catch their attention as a result of innovative marketing and attractive packaging. Hair Care is the highest revenue generating segment of the industry globally, closely followed by Skincare which can be majorly attributed to the increasing awareness about the harmful effects of the environment and benefits of skincare products in preventing, protecting and curing those effects.
Cosmetics, Perfumes and Toiletries are the segments next in line. Even though innovators are ceaselessly coming up with innovative and improved beauty and personal care products, experts see major opportunities in products such as:
Specialized products for men – Men all around the world are increasingly becoming more and more concerned about their looks. This has created a need for specialized products to cater to this segment of the population. Even though shaving creams, toiletries and hair gels are the common products being used by men till now, companies are developing new specialized products such as moisturizers, shower gels, fairness creams, face masks, hair creams etc. for this segment. According to experts, this demand is expected to increase at a neck-breaking pace thereby providing great deal of opportunities for new companies to enter.
Natural and Organic products – As people are becoming more and more concerned about the harmful effects of the environment and various chemicals on their body, they try to restrict the use of chemicals to bare minimal giving way to natural and organic products that have no damaging effects on their skin. Companies who are able to exploit this opportunity will see high profits in no time.
Premium products over mass products – Sale of Premium products continues to outscore the sale of mass products all around the world. This can be attributed to a decline in price sensitivity among people due to rising Per Capita Income and increasing demand for quality products.
Anti-Agers – The need for anti-ageing creams is only expected to increase as these days’ people focus on prevention rather than cure. Even though the demand for anti-ageing products saw a slight decline in 2015, experts expect it to bounce back this year.
Baby and child-specific products – Children have highly sensitive skin that requires extra care. This creates a need for products that are soft and low in chemical composition. This segment provides many opportunities for businesses to explore.
Venturing further into new categories – Facial masks, serums, edible jellies for collagen and other skin improving benefits etc. are some of the latest trends in the beauty and personal care segment and have a lot of scope for growth and expansion as more and more customers move towards trying out innovative and advanced products.
Scope of Beauty and Skincare industry in India
India has emerged as an exceptionally attractive market for beauty and skincare companies to introduce their products.
According to Euromonitor, 80 per cent of global skin care revenue gains by 2019 will come from Asia, with China set to account for 75 per cent of the total regional absolute growth. Indonesia and India will be the next growth frontiers.
The beauty industry in India is growing at a rapid pace, almost twice as fast as that of the markets in the United States and Europe.
According to a recent research, the overall Indian beauty and cosmetic market is currently pegged at INR 60 billion and is expected to reach INR 170 billion by 2020; growing at the rate of 15-20% per annum. The number of beauty salons in the country is increasing at a rate of almost 35 percent annually.
Being said that, India still has a long way to go as far as the skin care market is concerned. The skin care market is at a primary stage in India. The penetration level of this segment in India is around 20 per cent and many people still prefer to use traditional products to cure skin problems. Moving out of the convenience of using traditional skincare and beauty products will need a lot of push.
However, positive factors remain the influence caused by the exposure to global lifestyle and trends, growing media influence, rising concerns about beauty and looks and rising disposable income levels in the country. Also, the skin care market is not only growing but also transforming in terms of product diversification and exploration of innovative concepts.
According to Euromonitor, technological developments have encouraged a demand for personalisation and unique product engagement, and Asia continues to inspire innovation in terms of new formats, textures and product benefits.
The beauty and personal care market in India has huge growth potential as a large number of products still have only limited penetration in the country. With the major portion of the 1.34 billion population (63.6%) lying within the age bracket of 15 – 64 years signifies a youthful and working class of people who are more concerned about their overall presentation and look.
Another factor pushing demand for Beauty and skin care products is the fact that beauty and skincare products are no longer only for women nowadays; men also are increasingly using the skin care products. They are now social obsessions across age, gender and race worldwide as people are becoming more and more conscious about their looks. India’s incredibly large consumer base has a growing disposable income and places importance on personal care.
The value of imports is projected to increase primarily due to great emphasis on personal grooming and good looks. This increase is driven by high consumerism, increased disposable personal incomes and a strong social pressure on wellness.
The demographic variety of consumers that are spread within India translates into a diverse market that allows companies to offer variety of product across varied price spectrum. With a growing economy that plans to see annual income triple by 2020, the beauty market of India is full of opportunities and is a potential gold mine for many beauty and personal care companies.
What makes India attractive to Beauty and Personal Care Companies
People are now becoming more and more particular about their looks and health. This can be seen across all age groups, genders and cultures. The need to look good and presentable has become a priority amongst people and can be attributed to the increase in people going out to work and their need to look presentable and professional.
India in this context has emerged as an exceptionally attractive market for beauty and skincare products.
This can be attributed to a number of factors including;
• Increasing disposable income levels – This is the most important factor contributing to the increased attractiveness of the country. India’s total disposable personal income has been increasing year after year at a rapid pace and so is the consumer spending. Disposable Personal Income in India is expected to reach INR 147960218.03 million from INR 138192890 million by the end of 2020. High disposable incomes have also brought along with it a strong shopping culture as people can now afford spending more money on luxuries and not just on bare necessities. This makes India a prospective gold mine for all big and small players.
• Younger population – India has a population of 1.3 billion with a wide demographic spread and a population growth rate of 1.25%. 63.6% of the population lies within the age group of 15 – 64 years (male 381,446,079/female 359,802,209). With the major portion of the population lying within the age bracket of 15 – 64 years signifies a youthful and working class of people who are more concerned about their overall presentation and look.
• Increase in number of tourists – The travel and tourism industry has been booming for many decades now and is predicted to grow at an average annual rate of 7.5%. India’s attractiveness as a tourist spot will also help many Indian companies attract potential buyers.
• Exposure to global lifestyle and trends – People travel not only for business but also leisure and learning purposes. This has brought in globalization in every aspect of our lives. Being exposed to global lifestyle and trends brings in demand for international products and innovation.
• Growing media influence – The role of Media is manifold. In today’s time almost all companies are using various modes of media to reach customers all around the globe to market their products and customers too are taking to media to find solutions to their needs.
• Harmful environmental effects – Increased pollution and global warming have innumerable skin and health hazards. Skin problems like tanning, pigment darkening, sunburn, pimples, allergies, skin cancers, and infectious diseases are all a result of these environmental demons. This has created a dire need for preventive skincare products opening up more opportunities.
• Many unexplored segments – However scanty, presence of beauty and healthcare products is there and many international companies are making their way into India to exploit the plethora of opportunities available here. However, advanced products like facial masks, serums, edible beauty jellies, laser treatments and other latest trends and technologies still have only partial existence in the country.
• Increasing use by men – The need to look good is not restricted to women alone anymore and men are becoming equally conscious about their looks. This has brought in a need for expansion of the beauty and healthcare market to cater to these rising demands.