Reasons Why The Premium Cosmetics Players Might See A Promising Future In India

by Trefis Team
-1.94%
Downside
42.41
Market
41.59
Trefis
LRLCY
L'Oreal
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It seems that premium cosmetics market demand is not abetting anytime soon. After showing promising growth in emerging nations such as China and Korea, the market for premium beauty is on the rise in India, as well.  According to a 2017 report by Indian Beauty and Hygiene Association, while the mass beauty products market grew by around 1% in 2016, there was a 6% growth in the luxury beauty market in India. The beauty players across the globe are gearing up to take advantage of this trend.

What Are The Factors Boosting The Growth Of Premium Cosmetics In India?

  • According to Euromonitor, the average per capita expenditure in India has risen from around $630 in 2011 to over $1,000 in 2016. The rising purchasing power along with the growing disposable income, a younger population base, and the growing digital penetration are significant contributing factors to this rising demand for premium beauty products.
  • India’s online beauty stores such as Nykaa and Purplle are encouraging customers to buy premium beauty products by offering them a vast array of popular international brands to choose from.
  • Earlier, a lot of international brands might not have been  accessible to Indian beauty users, however, the online boutique stores curate world renowned brands and offer them to Indians. Also, the concept of beauty bags is becoming popular in India wherein websites such as My Envy Box and Fab Bag offer a collection of cosmetics in a mystery bag every month to its subscribers. Through this bag, customers get to try different brands of skincare, makeup, or haircare products and maybe buy bigger packs of the brands they like.
  • The potential for future growth is also very promising with premium beauty contributing to only 10% of the overall Indian beauty market while on average it contributes around 60% in the other international markets.

The premium beauty players in India are gearing up to cater to this trend of rising demand. L’Oreal is planning on opening boutiques for its NYX cosmetics brand. O2 Spa, a spa chain, is set to introduce its premium personal care brand, Ode, and Purplle is launching a host of international beauty brands in India in the near future.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for L’Oreal

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