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Indian Market for Active Ingredients Ripe for Innovation; Growth

Posted: December 22, 2009

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"Personal care active ingredient manufacturers need to focus on the scientific efficacy and brand awareness of their products by constantly remaining a step ahead of market trends," notes Telles. "They need to aggressively maintain their first-mover advantage, given the large potential in terms of the raw materials provided by the Indian topography."

Manufacturers can greatly expand their customer base and market share once they realize that consumers are likely to prefer recognized Indian actives such as turmeric to exotic actives. Once participants establish a toehold in the market, they will have to work hard to retain their market and revenue shares as the competition is price-based, states the analysis. Apart from inadequate product differentiation, it is the lack of intellectual property or trademarks for ingredients that has caused this situation.

This deficiency of proper legislation has hindered the growth of this sector, both internally and externally, as Indian exporters find it difficult to export ingredients to Western markets because they are unable to claim ownership of their products. While India is a major source of raw materials, it does not claim any royalties or copyrights on any of its locally sourced actives, making it harder for domestic manufacturers to compete effectively.

"With increasing commercial and consumer interest in this market, it is important to strategically position products to create brand loyalty and thereby retain customers, creating product niches that will reduce the intensity of competition," says Telles. "Showing superior ingredient backing through academic research and clinical trials would result in customers developing ingredient as well as supplier loyalty, enabling participants to distinguish their products."