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India Quarterly: Guerlain Enters the Indian Market

By: Priyanka Bhattacharya
Posted: April 2, 2008, from the April 2008 issue of GCI Magazine.
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The retail boom, along with increasing consumer awareness and demand, has resulted in many global high-end beauty brands targeting the Indian market over the last year. French cosmetics brand Guerlain has joined the bandwagon, looking at the Indian market and surveying the possibilities of setting up shop here.

LVMH Group, Guerlain’s parent company, already has a presence in the country through its Christian Dior, Louis Vuitton, Givenchy and Kenzo brands. Since the company is still testing Guerlain’s potential in India, it is yet to decide whether to enter the market directly or through a large distributor—as most luxury brands entering the country have done.

Shampoos Grow; Bath Soaps Slow
As Indian consumers across segments become cognizant of new product categories and product usage, there has been a discernible shake-up in the market, and the $17 billion Indian bath soap category is evidence. In the third quarter of fiscal 2007–08, the bath soap segment has shown a negative growth of 4%, per ACNielsen’s quarterly retail panel, compared to the same period 2006–07. This is, however, in volume terms; value growth remains positive due to the relative increase in pricing of the products. The same report shows the volume growth of shampoo at 10% for the 2007–08 period, with value growth of 14%.

This marks a shift in consumer usage behavior. Until recently, soaps doubled as hair wash for most consumers in smaller cities and towns. With increasing awareness, consumers in these areas have shifted to usage of two separate products for skin and hair. Similarly, increasing sales of facial washes also mark lower usage of soaps, according to some industry watchers.