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• Country Overview
• Beauty Market Overview
• Beauty & Personal Care Market Segmentation
• Compliances / Operations
• Pricing
• Investments / Go-to-Market Overview
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Content
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•Sub-continental in area 3.3 M km2
•5,653 km of coastline
•3214 km N-S, 2944 km E-W
•Desert,plain,tropic,mountain,ice
Geographical size :
•1.3 Billion (2nd)
•65 % <35 Population :
•8 major religions
•29 States & 7 Union Territories
•22 official languages
•800+ major dialects
Diversity & complexity
•Secular & plurality
•Active Outspoken press >35k publications
• > 800 M registered voters
• 75% of population, mobile users
Largest democracy:
•Growth Expected to grow at 7.6% in 2015 & 7.7% in 2016 surpassing Chin
•Service >50% ; Private =75% of GDP
•Increasingly investment friendly
Economic Emerging
Superpower:
India – Some Key Facts
1.2 Billion people 1.5% growth p.a. 65 years life expectancy 46 cities > 1 million 65% (793m) of population < 35 year 81% (988m) of population < 45 years Median age 25 years
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504M 42% 312M 26% 264 M 22% 144 M 12%
0-19 years Techno Babies
20-34 years Impatient Aspirers
35-54 years Balance Seekers
55+ years Arrived
Veterans
350 M Middle Class
17 M earn > $ 90,000 p.a.
Urban population : 32%
Gender ratio: 1:1
80% Hindu; 14% Muslim
Literacy 82% Male; 65% Females
Per capita income 2014 $ 1627 compared to $ 1508 in 2013
India – Demographics
North
• Delhi
• Political seat & capital
• Agrarian
• Cult of landed gentry
• Flamboyant & flashy
• Strong in cosmetics
• 28% of Retail sales
• Greatest mall density
East
• Kolkatta
• Culturally rich
• Marxist/communist
• Subdued consumerism
• Discreet wealth
• Strong in skincare
• 8% of Retail sales
• Largely untapped
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South
• Bangalore
• Lush & tropical
• Heart of IT India
• Service industries
• Gulf money a driver
• Colourful
• Highest level of literacy
• Matriarchal family structure
• Strong in skincare
West
• Mumbai
• Commercial hub
• Cosmopolitan (Mumbai)
• Better infrastructure
• Strong in fragrances & cosmetics
• 40% of Retail sales
India is more than the sum of its parts – “it is the sum of its contradictions”
Classification of Indian Cities
Tier I
(> 1m Popn)
Tier II
(= 1m Popn)
Tier III
(< 1m Popn)
Delhi, Mumbai Kolkatta, Bangalore, Chennai
Congested realty sector, High property prices
Major international brands present, Self indulgence on the rise, High
brand awareness, High media consumption, Saturated markets.
Pune, Hyderabad, Jaipur, Lucknow, Ludhiana, Chandigarh, Noida…
Available properties. However, prices on a rise.
Govt. of respective states focusing on infrastructural facilities and SEZ’s.
Aspirant consumers, high disposable income, Lack of competition.
Nasik, Trichy, Amravati, Raipur, Kanpur, Guwahati, Bhubhaneshwar…
Real estate markets yet to establish. Substantial potential demand
Consumers are exposed to brands thru sachet marketing.
Early mover advantage in terms of market entry.
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Currently…
smaller than we can think
But….
Future…
probably larger than we can imagine
India – Beauty Market
Total Retail Market: $ 600.0 Billion (2015 est.)
Organized Retail: $ 48.0 Billion 8.0% of Total Retail
E Commerce : $ 6 Billion 1.0% of Total Retail
Personal Care market : $ 8 Billion 1.3% of Total Retail & 17%of Org. Retail
Beauty & Cosmetics : $ 1.8 Billion 22.5% of Personal Care
10/1/2015 10 Source : BCG, RAI, Industry Estimates & Industry News
India – Estimated Beauty Market Size
Products supplied on consignment in most cases
BAs, Fittings & Marketing on distributors’ account
Strong wholesale & grey market
Dept store type & high street retail is limited.
Large net work of small multi product retailer, local tertiary city stores
Little opportunity for large visual space; all of it on hire
Price sensitive. Low switching costs for consumers
Distinction between mass, masstige & prestige is hazy
The unorganized market size is 3-4 times of organized retail market.
Heavy launch costs on new products (in
terms of advtg, launch promotions, free
samples)
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Characteristics of Indian Beauty Market
Wellness
Cosmetic Beauty
Technology
Growth Drivers of Indian Beauty Market
Focus on Natural &
Organic products.
Growth in demand
of essential oils.
Increased
awareness about
Cosmetic centers ,
Cosmetic products
Upsurge in
services at Spas &
Wellness centers
Urban population
is more focused
on Health &
Fitness
Growth in skincare
awareness .
Increase in demand
of treatment prods.
Aspirational
consumers willing
to experiment with
hair colors &
treatment
90% of population
are mobile users of
which > 70% are
smart phone users
Digitally connected
consumers. Social
Media very popular
Videos, Virtual
demos, bloggers
very popular in the
Beauty segment
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Skin Care, $1.28 , 16%
Cosmetics, $0.48 , 6%
Fragrances, $0.08 ,
1%
Bath, $3.68 , 46%
Hair Care, $2.48 , 31%
Indian Personal Care Market ~ $ 8.0 Bn The skincare
market is still small but growing at a high rate and away from basic creams & moisturizers to specialized products such anti-wrinkle, eye defence
Speciality products, cosmetics & deodorants are growing at 20%+ per annum, propelling the total personal care market in India to double by 2016-18
Personal Care Market Segmentation in India
based on category
Super Prestige
(above $100)
Prestige ($60- $100)
Premium ( $30-$60)
Mass Premium ($10 - $30)
Mass (Below $10)
Source: Market Segmentation is on the basis of avg. price of a beauty product or service (Survey by Argus CMPO)
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Beauty Market Segmentation in India
based on pricing
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1. Mandatory Registration. 2. Time taken : 90 to 180 days depending upon documents clearance by the
FDA authorities. 3. General documents required are as follows :
• Power of Attorney in the name of the Importer / Distributor • Original or copy of the labels bearing the name & address of the
manufacturer. • Free Sale Certificate (FSC)/Marketing Authorization
letter/Manufacturing License, if any • Product specification and testing protocol. • List of countries where Market Authorization or import permission
or registration was granted. • Pack insert, if any • Soft copies of the information about the brands, products and
manufacturer. • Composition for Lab Analysis of the products • Declaration that the products are not animal tested.
Registration of Beauty Brands in India
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Cosmetic products which are imported into India as bulk for repackaging for 100% export to other countries will not require registration certificate. In such cases the importer has to obtain the necessary permission from CDSCO HQ. Importer must give written undertaking that these products are not released for domestic sale. FDI for Beauty Retail : 100% on single brand 51% on multibrand retail Operations in India Brands can also set up their operations in India through :
• Liaison /Representative Office • Project Office • Branch Office • Pvt. Ltd. Co.
Opportunities for Salon brands could be : • Franchising • JV Partners
Other Operation Opportunities in India
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Summary of Coefficients in Pricing
Note : Pricing coefficients will vary depending upon various factors like margin
terms with distributors & marketing investments. Above chart is indicative.
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• Product Registration
• Product Trainings
• Technical Trainer (Important for professional products)
• Trade Offers
• On Counter Promotions
• Sales Incentives
• Brand Building (online / offline )
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Areas of Investment
Brand
Regional
Distributor Wholesaler SuperStockist
Consumer Small
Retailers
Sub -
Distributor Retailer
Exclusive Distributor/ Importer
Channels of Distribution
BRAND
Price
Positioning Market Roll
Out
Distributor
Assessment Brand
Building
Competition
Price
Retail Price
Export Price
Brand
Portfolio
Financial
Stability
Sales
Distribution
Network
Establish Tier 2
& Tier 3 cities
Invest in
Trainings
Invest in
counter
promotions
Leverage
technology
Online/Offline
integration
PR and Media
Spend
Smooth Entry to Indian Beauty Market
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