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India Quarterly: Lauder Buys Stake in Forest Essentials

By: Priyanka Bhattacharya
Posted: October 8, 2008, from the October 2008 issue of GCI Magazine.

The Estée Lauder Companies announced its purchase of a minority stake in a privately held Indian company that manufactures, markets and sells beauty products under the Forest Essentials brand, which is based on ayurvedic formulations.

In an interview, Sonia Michon, vice president and regional director, The Estée Lauder Companies, said that Forest Essentials gives the company a stronger presence due to the brand’s already strong presence in India’s premium skin care market. Also, the move will help Lauder create brand recognition with Indian consumers and build credence with affiliations to nature-based products. For its part, Lauder will help Forest Essentials in building a reputation as a high-end luxury brand and gaining international presence.

“We are delighted to gain The Estée Lauder Companies’ brand-building and marketing expertise, which will help take Forest Essentials to the next level,” said Mira Kulkarni, CEO, Forest Essentials. “We look forward to expanding our unique brand, which harnesses an age-old holistic philosophy to create a new beauty ideal.” Lauder is also getting aggressive in making its presence felt by opening freestanding stores in strategically chosen retail environments. It opened its second store in India, a boutique in Bangalore’s premier luxury mall, The Collection at UB City. During the next three years, Lauder plans to open 20 locations and expand into Hyderabad, Pune and Kolkata. In the coming six months, Estée Lauder will open two freestanding stores in Delhi, as well.

Natural Makeup Heats Up

The Indian color cosmetics market is seeing a drastic change. With the increasing demand for color cosmetics, some herbal brands are launching makeup colors claimed to consist of up to 95% natural ingredients and extracts. Two popular mass ayurvedic brands, Lotus Herbals and Ayur Herbals, have introduced natural color cosmetics.

While the trend for nature-based cosmetics is not really new, the market is gaining mass consumer attention. Brands such as Shahnaaz Husain and Biotique were already offering natural eyeliners, lipsticks and mascaras, but they did not see mass acceptance in India. The ranges also tended to be very limited. In fact, Husain lipsticks and kohl pencils found more shelf appeal to consumers in Europe.