Indian Market Presentation Ubifrance

8/3/2019 Indian Market Presentation Ubifrance

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An overview of

the personal care

market in India

Information courtesy of:


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The main market segmentsThe main market segments


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The market in figures

Source: Madras Consulting Services


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Skincare

The skincare market value is estimated to be 410 million Euros (2005-06).

Production in 2004-05 amounted to 83,500 tons.

410 millionTotal

87 millionColour Cosmetics

113 millionTalcum Powder

210 millionCreams & Toners

Market size (EUR)Product


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Skincare: sub-segments

Creams and toners account for the main sub-segment in the skincare category:over 48% in volume terms & 51% in value terms.

The market is valued at 210 million euros (2005-06).

This sub-segment also includes fairness creams in particular, a market worth166 million euros (2005-06). Hindustan Unilever Limiteds Fair and lovely brandleads the market (70% share) followed by CavinKares Fairever (9% marketshare).

Creams and toners also include curcuma-based creams, a mass-market product(12 million euro value between 2005 and 2006) with Vicco Laboratories and itsVicco brand as market leaders.


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Creams and toners also include anti-ageing, which is perceived as a luxuryproduct in India where Avon and Garnier Synergie are market leaders.

In India the talcum powder segment is part of the skincare category on account

of its significant penetration in the country.The market is valued at 113 million euros (2005-06) and is dominated by massmarket companies such as H.U.L (with the PONDS brand holding a 53%market share), CavinKare, Godrej, Colgate Palmolive andJohnson & Johnson.

This market is particularly important in the South of Indiawhere talcum powder is used as a cream.


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The make-up sub-segment or colour cosmetics is still small by globalstandards. It is currently valued at 87 million euros (2005-06) but is growingat a rate of 30% annually.

This sub-segment is dominated by lipstick andnail varnish (95% in total).

The LAKME brand is the best seller in India.

Several international brands have also positioned

themselves on the market including Revlon,LOral Paris, Lancome, Nina Ricci, Shiseido,Chanel, MAC, etc


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Haircare: markets and segmentation

The haircare market is valued at 725 million euros.

17 millionConditioner

725 millionTotal

78 millionHair dye

262 millionShampoo

367 millionOils

Market size (EUR)Segments


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Haircare: sub-segmentation

The production of haircare oils (in volume terms) is 80 million litres.

This market is valued at 367 million euros (2005-06) and growing by 8% a year.

72% of oils are coconut-based and MARICO is market leader.


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Shampoo is gradually substituting soapin India (32% penetration in 2005) andis worth 63,000 tons (sales volume).The shampoo market is estimated to be

worth 262 million euros (2005-06) andaccounts for 36% of the haircare market.

Packaging is customised and comes inbottles or sachets (70% of total consumption).

This segment also includes conditioners,a market valued at 17 million euros.

HULP&G

OtherCavin

Kare

Dabur

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

The main players market share


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The hair dye market is an emerging one.

It is worth 78 million euros (2005-06) and is growing rapidly (25% a year).

Godrej is the dominant player with an 86% market share.

LOral has been very instrumentalin the adoption of hair dyes,which are not only used to colourwhite hair but also for cosmetic reasons,

i.e changing ones appearance.


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Fragrances and deodorants

Few Indian nationals can yet tell the difference between deodorants andfragrances.

Official statistics dont make a clear distinction between the two either.

The fragrance market is estimated to be worth 262 million euros and growing by25% annually.

The select segment is dominated by importedforeign brands but the mass market segment

includes a few local players.The deodorant market is valued at 227 million euros(2005-06) and is growing by 20% a year. Leadingthe market is Hindustan Lever with a 58% share.


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Oral care

The oral care market is valued at 638 million euros (2005-06).

The toothpaste market is valued at 437 million euros (2005-06) and is growing ata rate of 8% annually.

Colgate is the market leader (40% share).

The toothpaste market is valued at 104 million euros (2005-06) and is growingby 30% a year.


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Male grooming

The male grooming segment should not be overlooked as it is valued at253 million euros and growing at a 24% annual rate.

Apart from shaving products, the outlook is bright for the care market

whether haircare or skincare segments.Indian consumers are also very keen on spa treatments.


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Soap

Soap penetration is estimated to be approximately 88% but consumption isweak: 800 grams per capita vs 6.5kgs in the USA and 4kgs in China.

There are more than 200 soap brands in India and they are marketed by more

than 70 companies.The market is valued at 909 million euros (2005 06) and is growing at a rate of5% annually.

H.U.L is market leader with a 54% share.


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The main playersThe main players


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Hindustan Unilever Limited (HUL)

HUL has been present in India for about 100 years.Its 2006 turnover was 2.27 billion euros.

Axe, RexonaDeodorants

Denim, AxeAfter-Shave

Denim, AxeShaving Foam

PepsodentToothbrushes

Pepsodent, Close UpToothpaste

Breeze, Fair & Lovely, Liril, Dove, Pears, Rexona, Hamam, Lux, Lifebuoy, AyushSoap

Powder Wheel, Surf-RinDetergents

LakmMake-up

Clinic All-Clera Oil, sunsilk Hot Oil, AyushHaircare oils

Sunsilk, Clinic All Clear, Clinic Plus, Lux, AyushShampoo

Clinic Active, Fair & LovelyCreams and TonersPond, LifebuoyTalcum powder

BrandsProducts


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Colgate Palmolive Pvt Ltd

Present in India since 1937, Colgate Palmolives turnover is213 million euro (2005-06).

PalmoliveShaving Products

Palmolive Extra Care, Palmolive NaturalsSoap

ColgateToothbrushes

Colgate Total, Colgate Gel, Colgate Herbal, Colgate Dental Protection, ColgateMax Fresh

ToothpastePalmolive BrilliantineCreams and Toners

BrandsProducts


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Godrej Consumer Products Limited (GCPL)

Godrej is part of a large Indian group with diversified products/servicesand a 120 million euro turnover (2005-06).

Godrej No 1, Natural, Cinthol, Fair GlowSoap

Godrej Hair Dye, ColorsoftColour/Hair dye

Ezee Liquid DetergentDetergents

Anoop haircare oilsFair GlowCreams and Toners

BrandsProducts


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Nirma Ltd

The company was founded in 1969 andits 2005-06 turnover was 391 million euros.

Nirma Lime Fresh, Nirma BeautySoapNirma Blue, Nirma Fabric WashDetergents

BrandsProducts


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Procter & Gamble Hygiene & Health Care Ltd

P&G had been trading in India since 1964 and achieveda 104 million euro turnover (2005-2006)

Gillette Aeorosol, Gillette Shave FoamShaving Foam

Oral BToothbrushes

7 oclock Ejtek Super Platinum, 7 o clock Ejtel Super Stainless, 7 oclock PII,Mach III

Razors

Pantene, Head & Shoulders, Lively Clean, Rejoice, Pantene Pro-VShampooAriel Compact, Ariel Matic, Ariel, Ariel Power Compact, Gain, TideDetergents

BrandsProducts


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Henkel Spic India Ltd

Created in 1987 in collaboration with Tamilnadu Petroproducts LtdChennai & Henkel KgsA, Germany

The company achieved a 52 million euro turnover in 2005.

Fa Caribbean Lemon, Fa Aqua, Fa Exotic Garden, Fa Sunny Melon, Fa Sport,Fa Purple Rain, Fa Spring Flower

Deodorants

MargoSoap

Henko Matic, Herko Stain Champion, Henko PowerPearl, Mr WhiteDetergents

BrandsProducts


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Modi Revlon

Modi Revlon is a joint venture (74:26) between Modi-Mundi Pharma and Revlon.

Originally positioned as a prestige segment company,Modi Revlon had to review its strategy due to other key players

price-competitiveness, in particular Lakms.

5 years after it launched in India, Modi Revlon has nowbeen repositioned as a mass market player.

Modi Revlons product range comprises make-up, haircare, deodorants,

talcum powder and mass market fragrances (Charlie and Fire & Ice).


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Marico Industries

Marico Lts was founded in 1962 and has built its reputation in Indiaon food oils (Saffola), haircare and body oils (Parachute).

Parachute is a coconut-based body and haircare oil and is one of the mostpopular and most widely distributed oils in India (with a 22% market share).

Marico is also present in approximately 20 other countries andachieved a 183 million euro turnover in 2005-06.


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CavinKare Pvt Ltd

CavinKare started operations in 1983.

Its turnover in 2006-07 was 99.6 million euros.

IndicaHair Dyes

Nyle, Chik, Meera Herbal Powder, Meera Badam Shampoo,

Karthika Shikakai Powder

Shampoo

Electrix, Spinz DeodorantsPerfumes

Fair Ever, Mantra Fairness Cream, Nyle Herbal Cold Cream, Nyle MoisturisingLotion

Creams & Toners

Chik, Talc, SpinzTalcum Powder

BrandsProducts


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Emami Group

Emami Products, whether beauty products (talcum, essential oils,day creams or shampoo) or OTC pertain to traditional Indian

medicine (ayurvedic) and target a mass market audience.

Emamis turnover is 52 million euros (2005-06).


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Reckitt Benckiser Ltd

Created in 1998 following a merger between Reckitt & Colman India,a branch of Reckitt & colman PLC (UK) and Benckiser,

this company ranks as one of the main consumer goods suppliers in India.

Positioned as a cleaning homecare products as well as OTC (including Dettol,Cherry, Harpic, Mortein, Disprin, Robin, Colin, etc), Reckitt Benckiser

(India) Ltd launched VEET, the depilatory cream brand, in 2004.

Sales turnover: 174 million euros (2005-06)


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Dabur India Ltd

Family-run and managed by Dr S.K Burman, Dabur India specialisesin the manufacture of health and beauty care products and in particular

ayurvedic products targeting the mass market (eg shampoos,make-up remover and oral care).

Dabur also markets food spices and exports to approximately 50 countries.

The companys turnover in 2005-06 was 239 million euros.


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LOral India Ltd

LOral has been trading in India since 1990. Operating initially with the supportof a distributor, LOral created its 100%-owned branch in 1994.

LOrals full range of divisions is now operating in India:

The consumer division (launched in India first) includes LOral Paris(with actress Aishwarya Rai as its ambassadress), Garnier and Maybelline N.Y.

Professional Products including LOral Professionnel, Matrix and Krastase.

Active cosmetics with Vichy and products distributed via 120,000 P.O.S.

The Luxury products division launched at the same time as the leadingLancome brand in 2006 followed by Ralph Lauren, Cacharel and Armani.

LOral India employs > 400 staff and its turnover multiplied by 5 in 5 years.

LOral has identified India as one of its top 5 global markets.


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Other players

Amway IndiaAvon

Ayur HerbalsFem Care

Johnson & JohnsonLotus Herbals

ModicareOriflamme

Paramount Cosmetics

Shanaz HerbalsThe Himalaya Drugs Company

Vicco LaboratoriesVLCC


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What are the contributing factors to growth?What are the contributing factors to growth?


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Contributing factors to growth: economic indicators

6% average annual economic growth.

4% average annual per capita growth over the past 10 years.

70% of the population under the age of 35.

20 to 49 years-old age group predicted to grow by 7.1% over the next 10 years.

Every year, the 20 to 24 age group increases by 3 million. This particular agegroup is the one enjoying the highest buying power increase.


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Contributing factors to growth: distribution, labour, price

Although highly fragmented (3% chains, 97% independent), the sector is likely tobecome more structured in the years to come.

The large Indian chains have invested considerably over the past 2 years in this

sector, which is reporting a turnover in the region of 205 billion euros.

In view of Indias cheap labour, the export outlook is positive for the main playersin this sector.

Price is a determining factor in India. Indian consumers are thrifty (28% personalsaving rate*), know their prices and are very sensitive to price increases.

Indian consumers give priority to value-for-money and expect to obtainmaximum usage from a product with lower buying frequency than in Europe.

Indian consumers are also strongly influenced by advertising.Source: Reserve Bank of India


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The ingredients marketThe ingredients market


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The ingredients market

Market size: 200 million euros a year (source: S.H Kelkar).

Exports: 20 to 25% of the local production.

Main ingredients produced in India:

Mint-based products (eg menthol, peppermint oils); pine oil, lemongrass,flower essences (jasmine and rose in particular) as well as spices.

Main Indian companies:S.H Kelkar Ltd, Oriental Aromatics, Sachee Aromatics,

Khatri Perfumes, Ultra International, SHK AromasMain international companies:

Givaudan, IFF International Flavors and Fragrances,Quest International, Robertet, Mann, Drohme, Charabot


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Launch strategy and barriers to entryLaunch strategy and barriers to entry


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Launch strategy and barriers to entry

The legislation governing small businesses hasnt been affectedby the wave of industrial reforms launched in 1991.

Foreign participation for joint ventures which manufacture small businessproducts is limited to 24% unless the company undertakes

to export half of its local production.

Fragrance production is earmarked for small Indian businesses (SSI) butfragrance production involving formulation is not restricted to them.

It is possible to subcontract the production of fragrances toa local firm within the framework of a know-how supply

with the local firm being paid on a percentage/royalty basis.In which case, it is possible to create a branch (with 100% ownership).

This type of solution must be negotiated with the Foreign Investments

Promotion Board / Secretary for Industrial Assistance.


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Import rules and regulations

Import products regulations: The Drugs and Cosmetics Act, 1940 and theDrugs and Cosmetics Rules, 1945 (13th edition 2001) and its amendments:

basic regulations governing cosmetic production, imports and distribution.

Classification of Cosmetic Raw Material and Adjuncts Part 2: List Of RawMaterials Generally Not Recognized As Safe For Use in Cosmetics

Bureau of Indian Standards, 2001 ref. IS 4707.

Under the Rules:Cosmetics shall contain only approved dyes, colours & pigments & shall not contain certain chemicals, compounds etc.Cosmetics can be imported only through certain specified seaports, airports, railway stations, etc.

Imported cosmetics may be subjected to tests & analysis & pending such testing cannot be disposed of by the importer.License has to be obtained from the Licensing Authority appointed by the State Government for manufacture ofcosmetics.License is granted subject to conditions such as qualifications of staff in the unit, maintenance of records, inspections, etc

Cosmetics have to adhere to the standards prescribed by the Bureau of India Standards (BIS). Labelling requirements

have been specified. Cosmetic containers have to adhere to these requirements.


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Taxes

Import tax (per kg) dependent on customs codes

Basic customs duty: 10%

Additional customs duty: 16.48%

Supplementary Countervailing Duty: 4%

Total Customs Duty (inclusive): 34.13%

Excise Duty: 16%


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Thanks to:

www.ubifrance.fr/cosmetiques

The information contained within this document was collected in 2007 and as such the in-cosmetics India team cannot be heldresponsible for any inaccuracies or any market changes.

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Indian Market Presentation Ubifrance