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Despite market slowdown, India remains one of the fastest growing beauty markets globally, growing at 13% per annum and valued at $6.3 billion. As the middle-class consumer base and its disposable income grows, the market is moving nearly four times faster than the $52 billion value of mature beauty markets and twice as fast as the $270 billion global market, according to a recent report by market research firm Kline & Co. Currently, the market is importing cosmetics and toiletries and intermediate raw materials worth $120 million. The color cosmetics market currently accounts for $60 million of the total market, while skin care accounts for approximately $180 million.
The hair care market is pegged at $200 million, and the herbal cosmetics segment dwarfs the others at a value of $630 million. Color cosmetics is the fastest growing segment, as more and more women become aware of looking good through the use of makeup; nail enamel ($23 million) and lipstick ($21 million) account for about 65% of this segment. Men’s personal care, another fast growing segment, is valued at approximately $165 million.
With its high growth rate, the market offers extensive opportunities to domestic and international players. However, high duty structure and certain ambiguities in terms of investment rules are among the complaints that companies looking to enter India make, and the reason that non-Indian brands account for only 20% of the total market.
Even with double-digit growth rates, the market penetration of cosmetics and toiletries products in India is very low. Current per capita expenditure on cosmetics is about $1, compared to $36.65 in other Asian countries. This low market penetration for cosmetics and personal care products in India offers an opportunity for more significant growth down the road in this country of 1.2 billion people.
According to a recent Deloitte report, the Indian market is expected to recover faster than other markets from the current economic slump. For the beauty brands operating in India, this translates to a steady source of income, particularly as more and more Indian consumers continue to buy beauty products as lifestyle statements—in addition to grooming and personal care must-haves.