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Cosmetics Retailing in India: Obvious Excitement

By: Priyanka Bhattacharya
Posted: February 20, 2007, from the February 2007 issue of GCI Magazine.

page 4 of 6

“Since June 2005 when Body Shop entered the country, we have found tremendous response from those who are familiar with the philosophy and products of Body Shop,” says Arun Bhardwaj, MD, Quest Retail Pvt Ltd., the Indian franchisee for Body Shop.
The big global brands in the Indian market are not only setting up shop but also looking beyond expansion strategy. This is leading the big retail companies to restructure some of their growth plans to attract more beauty companies into their shops.

Retail Revolution
There is an obvious excitement in the Indian retail sector. Reliance and Aditya Birla Group, big business houses, are entering the retail sector, while existing names such as Shopper’s Stop, Lifestyle, Pyramid and Pantaloon are restructuring their business strategies to foster growth in the Indian cosmetics and toiletries market.

Besides expanding the floor area of their shop-in-shop concept, the retail companies are also tying up with the big beauty brands to promote stand-alone branded beauty stores. For instance, Shoppers Stop, one of the leading names in the retail sector, has set up the stand-alone store for MAC Cosmetics in Mumbai. According to Alexis Szabo, regional director for the Middle East, India, Africa and Turkey, MAC Cosmetics, the company has a backstage partnership with retailer Shoppers Stop, as the right space is very important. MAC plans to open a second boutique in Mumbai followed by Delhi and Bangalore. The company plans to have five stand-alone stores in India in the next three years.

According to sources, Shoppers Stop is in the process of re-evaluating its strategy to ensure the best blend of beauty brands and how they can be showcased to consumers to translate footfalls into actual transactions. While expanding its area for department stores, the company also is collaborating with major beauty brands to develop stand-alone stores for them. It is now ready to create brand stores for Clinique and Lancôme when the companies decide to enter the market. Despite the steep import duties on cosmetics, up to 110% on luxury brands, Shoppers Stop is positioning itself strategically to push brands such as MAC, Clarins, Shiseido, YSL and Elizabeth Arden in the Indian market. It is known from sources that the company is already seeing a return on its investments on the luxury brands.

In fact existing luxury brands such as YSL Beauté, which has been refreshing its push in the area, is keen on strengthening its position as a prestige brand and aims to be available in all the growing locations across the country. Meanwhile, latest entrant Givenchy is aiming at 50 shop-in-shop outlets and at least two brand stores here in the first year of its presence in the market. It will retail through major retailers such as Lifestyle, Shoppers Stop and Pantaloons across the country.