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The steady growth rate in the Indian cosmetic and beauty service market has made the Indian government see it as a source of potential revenue for the country. In fact CII organized its first beauty B2B event—Beauwell India 2005—in Chennai in March, which attracted foreign participation especially from Europe. In presenting the event, TT Ashok, chairman, CII (Southern Region), said, “As the cosmetic industry is growing so rapidly, we at CII felt the need for an industry event to showcase the opportunities in the beauty and wellness business, and present a business platform for suppliers as well as players in the beauty service business.”
The increasing market size is the direct result of the changing socio-economic status of the Indian consumers, especially women. Higher paying jobs and increasing awareness of the Western world and beauty trends there have served to change the tastes and customs of the middle class and higher strata of the society, with the result that a woman from such social strata now is more conscious of her appearance and is willing to spend extra cash on enhancing it further. Today increasing numbers of women, especially from the middle-class population, have more disposable income leading to a change in cosmetic and skin care product consumption. This actually has fuelled a growth in certain product categories in the market that hardly were experiencing it earlier. Two such categories are color cosmetics and sun care products that have shown growth rates of 46% and 13% respectively over the past two years, according to Euromonitor International.
According to a CII report, US$0.68 per capita is spent for cosmetics, which might be lower than some other countries, but this indicates a growing awareness among consumers. “There are two major factors that are swaying the buying decision among women here. First obviously is the television and media exposure they have today. The other not so obvious one is the corporate dressing culture, which slowly is evolving in the Indian market. Due to set dress code in MNCs, a female employee is conscious about picking the right makeup colors for the office. Today she has the money and the inclination to spend it on separate sets of products, especially color cosmetics,” said Abdul Rahim, managing director of the Chennai-based cosmetic distribution company GR Fragrances Pvt Ltd, which markets the Diana of London range of cosmetics.
According to a source at L’Oréal India, women in the age group of 30 and above are getting very selective about the type of products they choose. “As older women have more cash and are more conscious of their appearance, especially skin, they are willing to spend more on separate sets of creams and lotions that target problem areas. These women also are more open to buying higher-priced products,” he says.