From Japan’s Shiseido to France’s L’Oreal, major global cosmetics companies are intensifying their focus on India. They view the world’s most populous nation as a critical growth market for premium products, especially as sales in more developed economies slow down.
According to a report by consulting firm Kearney and luxury beauty distributor LUXASIA, India’s luxury beauty market is projected to grow fivefold, reaching $4 billion by 2035, up from $800 million in 2023. This growth is driven by young, affluent consumers who are active on social media and have increasing disposable incomes.
Currently, luxury beauty accounts for only 4% of the $21-billion beauty and personal care market in India. This is lower compared to 8% to 24% in leading Southeast Asian nations and 25% to 48% in developed markets like China and the United States.
This indicates a substantial opportunity for expansion.
“India is the final frontier for premium beauty growth,” said Sameer Jindal, managing director at Houlihan Lokey’s corporate finance division in India. “Indian consumers are eager to experiment and try new things.”
US beauty giant Estee Lauder, known for brands like Clinique and MAC, anticipates robust growth and expansion in India, even as it faces declining sales in the Americas and Asia-Pacific regions.
“Within the Estee Lauder network, India is now considered one of the priority emerging markets,” said Rohan Vaziralli, the country general manager, emphasizing plans to initially target 60 million women in the nation of over 1.4 billion people.
Chennai-based homemaker R. Priyanka expressed her excitement about easier access to Estee Lauder’s Jo Malone London fragrances in India, thanks to these efforts.
“It’s more convenient than asking someone abroad to get it for you every time,” she added.
While global beauty brands may need to adapt some products for India’s climate, characterized by hot summers and high humidity, they face limited competition from local brands.
Kearney and LUXASIA identified Forest Essentials and Kama Ayurveda as the main competitors, highlighting that domestic brands account for less than 10% of luxury beauty sales. In contrast, domestic brands hold a 40% share in established markets like China, Japan, and South Korea.
“There is a significant perception gap between globally established brands and Indian brands,” said Devangshu Dutta, founder of retail consultancy Third Eyesight.
Industry experts also note that global beauty giants benefit from large marketing budgets, giving them an edge over local brands.
Captivating Indian Consumers
MAC Cosmetics lipsticks displayed at a store in Mumbai.
Estee Lauder is analyzing online sales patterns to identify smaller cities to target, such as Siliguri in West Bengal. They are partnering with designers like Sabyasachi Mukherjee and launching products like kohl, a popular eyeliner among Indians.
The company has also invested in Forest Essentials, a brand known for herbal ingredients, and a program to fund domestic beauty start-ups.
This year, France’s L’Oreal announced plans to increase its investment in India, capitalizing on the “elevated beauty desires” of young, digitally savvy, and empowered female shoppers to fuel growth. However, they declined to comment further.
South Korea’s Amorepacific, famous for brands like Innisfree and Etude, is leveraging the Korean beauty trend in India with market-specific products.
These include items for the popular “cleanser, serum, moisturizer, and sunscreen” beauty regimen, according to country head Paul Lee.
Japan’s Shiseido, with over 150 years of history, introduced its NARS brand on Indian beauty retailer Nykaa’s website this year and plans to accelerate the growth of its brands in the subcontinent.
Global brands are thrilled about India’s market, where consumers spend more to keep up with trends like “cherry makeup,” said Nykaa co-founder Adwaita Nayar, referencing a look featuring flushed cheeks, glossy lips, and soft pink eyes.
Amazon, witnessing a significant surge in beauty demand in India, aims to identify emerging global trends and introduce more brands, said Siddharth Bhagat, director of beauty and fashion at the e-commerce company in India.
Retailer Shoppers Stop, which also introduces foreign labels, plans to open 15 to 20 new beauty stores annually over the next three years to increase its revenue from this segment to 25%, up from less than 20% currently, stated Biju Kassim, CEO of the beauty business.
