Let Indian Companies Lead The Growth In The Beauty Care Market

During my teenage years, the kitchen pantry doubled up as did my beauty products' closet. Saffron, turmeric, milk cream and gram flour (kesar, haldi, malai and besan) were the staples from which face packs and body scrubs were conjured in minutes. There were no bottles or chemicals, just fresh ingredients. I was not alone. Many from my parent's and grandparents' generation tell stories of 'their improvised beauty products'. My grandmother attributed her most flawless skin to the 'same stuff that went into [her] cooking'. But life-styles in India have been fast changing and the penetration of consumerism has seen a shift from the kitchen cabinet to a surge in the use of bottled lotions and potions.

Today, the beauty and personal care industry in India makes up a staggering 22 per cent of the consumer package goods market which stands at Rs 74,700 crore in retail sales value. With a potential market of over a billion and an enlarging disposable income, it has been growing exponentially at 13  per cent year on year exceeding the average growth rate for the country. Market intelligence suggests that by 2025 the market will be worth 20 billion dollars. 

Led by L'Oreal India, Hindustan Unilever and Colgate-Palmolive, international players continue to be the stalwarts in this space as per the 2016 figures. Procter & Gamble, Gillette India and Johnson & Johnson India also feature prominently. They all boast of a repertoire of myriad products placed at various price points that cater to different categories of the 'consumer pyramid'. India's beauty care segment is being 'worked on' to become more lucrative for existing global players and to allure even more of them to set up shop in India.

But I argue that if the domestic market is signalling inexorable growth, this ought to be led by Indian firms as compared to foreign ones. However, Indian beauty companies, their products and their regulation have some travel to make to reach maturity in processes and practices that will better allow them to compete globally. First, the narrative ought to shift to streamlining and making procedures and processes in India more rigorous and diaphanous so as to benefit Indian companies - so they gain even better traction at 'home' and a stronger foothold aboard. 

A company like VLCC (Vandana Luthra Curves and Curls) is a metonym. An Indian origin company, it not only has an extensive and firm footprint in India but it is also trailblazing its way in the international arena. VLCC 's wellness centres have a presence in 11 countries in Asia and Africa and their products retail in 20 countries. Their expertise lies in delivering beauty and weight loss treatments posited on a therapeutic approach together with manufacturing beauty and wellness products with a specialisation in fortified and functional food products.

Extant challenges for Indian companies in this segment include regulation and labeling. Domestic brands, especially those positioned as 'natural', 'herbal'and 'Ayurvedic' have been seen to be playing catch-up with international players last year. Indians' love affair with natural products explains their edge in this category. However, on inspection, the use of the terms 'natural' and 'herbal' is found to be problematic and oblique. Some brands, and here Biotique is a trailblazer, are genuinely organic and/or preservative free but most are not. Consumer sites and community groups are now populating the internet with the awareness that so called natural and herbal products are laden with arguably harmful, chemical preservatives like parabens. Natural and herbal ingredients termed as the 'active' ingredients are listed while eliding the chemicals such as the preservatives that fall in the group of 'inactive ingredients'. 

Scour the internet and with the exception of diligent consumer posts or select media articles, the list of inactive ingredients of Indian beauty brands is a challenge to find. Labeling requirements need to be revised to come in line with European and USA labeling standards where a comprehensive list of ingredients that include active and inactive ingredients is mandatory for any product applied on the skin or ingested. If the labeling framework follows suit it will both better inform the consumer and allow for a labeling format that will have more international acceptance. This is especially true of the 'natural' care segment that currently forms 6-7 per cent of the market with a growth prediction of 10 per cent by 2020.

Another area of superlative growth in the beauty space in India is that of salons. As far back as 2004, Value Notes Database a research firm in Pune, pegged India at having over 61,000 beauty salons in towns that have a population of over one million alone. Sandeep Ahuja, Director VLCC Healthcare, tells me of how an increasing number of women are coming for beauty treatments to their wellness centres which have a growing presence and currently stand at 300 outlets in 200 Indian cities - tier 1-4 cities.

Extrapolating from the keen sense of family in Indian culture, the Indian consumer takes well to being loyal to a local salon that affords a sense of personalised care. Diksha, a 24 year old from Gujarat studying in Delhi tells me, 'I know my hair stylist and beautician. I always return to the same salon. Being there feels like being with family away from home'.  I understand her sentiment from a recent experience at Bridgette Jones Fashion Salon in Kolkata, a leading salon in the city. I went for a facial - my first in the city. I was struck by the welcome and the 'before and after care'. The facial came replete with a hand, foot, shoulder and neck massage. I have the experience of leading spas across the world yet this experience both in technical finesse and customer relations was outstanding.

Bridgette Jones, the owner of the salon explained how to achieve the level of expertise her salon prides itself in, she takes the training of every beauty therapist under her own wings. Despite phenomenal growth in this segment, training courses and institutes run by the Government are largely found to be wanting while private courses are prohibitively expensive. Training centres are mushrooming across the country but laws to regulate them and even the enforcement of the existing weak framework of laws is conspicuous by its absence.

Regulation in beauty care products and services and its enforcement is where urgent action is needed to empower Indian businesses in this sector to sustain the loyalty of their consumers and to best position themselves to compete with the international players for 'a growing slice' of the forecasted exuberant growth.