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Potential of Innovative Makeup Clearly Seen in India

By: Priyanka Bhattacharya
Posted: May 3, 2011, from the May 2011 issue of GCI Magazine.

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In terms of specific consumer segments, the market has grown larger with tier three and rural areas becoming the new focus for many Indian brands—and these areas are where most basic skin care is being sold. In addition, brands have been working to create awareness about using the right skin care products in these regions. This effort is due, in part, because the tier three markets are expected to grow very quickly. These segments of India’s population aspire to emulate the lifestyle in cities and urban areas as technology companies move into these regions—offering higher income potential and influencing lifestyle changes.

Henkel India to Sell Hair Care Business

Henkel India—which is owned by Henkel AG, Germany, and Tamil Nadu Petro Product—and sells professional hair care and styling brand Schwarzkopf Professional—has announced its intentions to sell its hair care business. The announcement came after the company reported losses for the last three quarters. According to a statement released by the company, the decision to sell off the Schwarzkopf business was made so that the company can focus on its core business of selling laundry and home care products in order to ensure long-term viability. The managing director of Henkel India also resigned his post, leading to major speculation in the Indian marketplace.

Two leading Indian brand owners—Jyothy Labs and Emami Group—have taken steps to acquire Henkel India’s hair care business. However, the market has reacted very differently to Henkel’s move and Jyothy’s interest in the purchase. While Henkel’s shares have gone up, Jyothy’s have taken a beating as shareholders question whether the purchase of Schawrzkopf business will have a positive impact on Jyothy’s overall performance in the market.

P&G Upbeat About Indian Performance

From being a minor location for P&G, the Indian market is now among the top three for the global brand owner. The company has recently announced that it is looking for its next $1 billion from this market. It is now focusing on growing the scale of its business here. Currently, the company is very positive about the performance of its brands—notably Wella, Olay and Pantene. The positive response to P&G brands is clear in individual spend data, which shows sales of P&G products in India has grown.

In India, the company plans to expand the number of categories in which it operates— adding new products to existing categories and growing the size of its market. The company is on a drive to improve its distribution spread and offers products at various price points.