"Derma Matter" - Specialist skincare brands are lending lustre to a rapidly expanding category


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Article written by Rahul Ashok, (Senior Consultant, Datamonitor), published in Progressive Grocer, June 2011

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"Derma Matter" - Specialist skincare brands are lending lustre to a rapidly expanding category

  1. 1. M A R K E T I N S I G H T Derma Matter Specialist skincare brands are lending lustre to a rapidly expanding category. G By Rahul Ashok oing by the na- ture and vari- ety of products launched in the Indian skincare market over the last few years, it is apparent that a makeover is underway. Retailers, manu- facturers and consumers are all playing a compelling role in transforming the landscape of this market.24 • PROGRESSIVE GROCER • JunE 2011 AHEAD OF WHAT’S nEXT WWW.PROGRESSIVEGROCER.COM
  2. 2. In a nation where almostevery person has some advice per capita expenditure (PCE) – Indians spend $1.41 every The skincareto offer on what is good forthe skin, the dynamics of the year on haircare, but a paltry $0.66 on skincare. To put market is heavilyskincare market in India arebeing shaped simultaneously things in perspective, Indians’ spend on skincare is so low skewed towardsby both hand-me-downtraditional knowledge as that the country does not even feature in the top facial creams andwell as more contempo-rary product concepts 50 in terms of PCE for the product type. fairness solutions inand formats. As such,it is not that a desire for Looking at the evo- lution of the two cat- particular.or an understanding of egories, there are someskincare is a novel con- variations that couldcept to Indians, but that have led to this ap-product usage has tra- parent difference inditionally been limited consumer spendingto few categories or se- patterns. In the caselect occasions. Over the of haircare, the majorlast few years, though, brands have invested athe increased urge to be lot of time and money in remains in consumers’ minds. Mean- the brand communication. Considerconsidered “competitive” educating consumers and while, marketers have scrambled to neutrogena’s slogan, “Get radianton various socio-professional building awareness across change the category proposition fairness that lasts even in the sun”, orplatforms has resulted in con- product segments. These ef- through creating more efficacy-led the name of L’Oreal White Perfect.sumers seeking more convenient forts have been aimed towards show- claims and refining marketing strat- The penetration of fairnessand nuanced ways to address evolv- casing the efficacy of formulations, egies to alter the consumer percep- creams in India is still only arounding skincare issues, be they dry skin, leveraging existing haircare practices, tion of creams from being meant for 25 percent, despite marketing at-wrinkles or tanning. and, most importantly, making each special occasions to something that tempts such as creating smaller sa- The impact of these underly- product relevant and part of consum- could potentially be a part of their chets to encourage trials, taking aing currents has been amply evident ers’ standard personal care regime. regular face care routine. “mass prestige” approach to brandin the changing market landscape. In contrast, the skincare market is From playing purely on mes- positioning, lowering prices and soLargely fuelled by facial creams, the heavily skewed towards facial creams sages about “fairness”, brands in In- on. The key message for brands hereskincare category in India – worth Rs and fairness solutions in particular. dia, thus, have evolved to talk about is that selling these products is not37.6 mn as of 2010 – has grown at As such, mention “skincare” and products in varied terminology simply about affordability, but morea healthy compound annual growth most consumers are likely to recall such as “whitening”, “radiance” and about creating a desire for fair skinrate (CAGR) of 13 percent over the communications along the lines of: “glow”. These propositions have been and each additional product benefitlast five years. It is also interesting “fair skin is pivotal in getting the best combined with other claims like “sun that is communicated in the mindsto note that even small and niche opportunities in life”. Other skincare protection”, “blemish removal”, and of consumers. For this, brands needcategories, such as anti-aging prod- concerns, including dry skin and “age-masking”, but without moving to go beyond the generic categoryucts and depilatories, have registered wrinkles, are being leveraged by very away from the concept of fair skin. proposition by building the rele-healthy double-digit growth rates. few brands in the mass media. The intention is to add layers on top vance of each benefit other than fair- These changes mark the com- As a result, products that can of the proposition of fairness, but ness, piece by piece, to consumers’ing of age of Indian consumers, not help address those concerns have not to do away with it entirely in skincare regimes.only with respect to awareness of still not become a part of the averagevarious personal care products, but Indian consumer’s regime. Further-also in terms of purchasing them on more, given the fact that consumersa regular basis. Consumer spending in most parts of India use variousacross constituent categories throws home remedies to treat their skin,some light on how the perception investigating whether and how theseof grooming is evolving differently practices can be contextualised foracross the various product segments. today’s skincare needs is certainly something that should top the “to-Skincare vs Haircare do” list of skincare brands. “Flawless skin” and “lustrous, Fair Enough?long hair” epitomise the notion ofbeauty among many Indians. That Fairness cream is possibly thesaid, there seem to be a lot of dif- skincare segment that has attractedferences in solution-seeking behav- the most attention over the years, iniour when it comes to the usage of ways both positive and controver-packaged personal care products in sial. While debates continue on thethe two categories. This difference cultural relevance and ethicality ofbecomes apparent when one looks at the category, the desire for fair skin WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S nEXT JunE 2011 • PROGRESSIVE GROCER • 25
  3. 3. Another area worth exploring forcompanies is the fact that many skin nications. In the Across all theradiance and brightening formula-tions that have been proven effective years come, Indian to skincare categories,in other countries do not work aswell on Indian skin types. So, Indi- teenagers are going to become teenagers contributean brands could potentially benefit increasingly likely to a sizable 20 percent of the totala lot from contextualising their to make small-formulations for Indian skin budget skincare market value.tones, or even adapting propo- purchase decisionssitions to the needs arising out independently, basedof climatic conditions (given on knowledge gainedthat many parts of India are through magazines andvery hot and humid for a peer groups. Furthermore,large part of the year). people in this age group are more likely to stick toSmells Like Teen at-home skincare solutionsCream than visit salons. As such, not only is there an opportunity for With their ever-increas- packaged skincare brands targeted ating exposure to the con- this consumer segment, but it is alsocepts of beauty and fashion imperative that brands explore new deodorants, face washes and so on category markers that align with theof an international standard, avenues to connect with teenagers. have quite a few brands that have male psyche in terms of productIndian teenagers are becoming con- made inroads into formulating prod- packaging, imagery, endorsementsscious of their day-to-day grooming Pour Homme ucts to specifically suit Indian males’ (if any) and so on.and appearance earlier in life than the skin types and skincare needs. Since most personal care catego-previous generation. They are more Despite Shah Rukh Khan’s ap- The vital lessons learned over the ries, other than those targeted at basicaware of the importance of main- pearance in Lux advertisements and years, which will continue to be rel- hygiene, have traditionally had a pre-taining clean and healthy skin, and Fair and Lovely launching fairness evant as this market grows, are two- dominantly feminine image, creatinghence are willing to try new products cream for men, even as recently as fold. Firstly, creating a male-specific a variant under the umbrella brandinstead of just recreating the skincare 2005 most Indian men were not positioning for an existing personal with a “for men” tag will not alwayspractices that their parents followed. fully comfortable with discussing care brand in India is not only about work for the brand. The well-estab-The increased tendency of teenag- their personal care needs or address- gaining an effective understanding of lished brand Garnier, for instance,ers to take control of their skincare ing them proactively. Much has male personal care needs and com- engaged a celebrity with a machois evident from the fact that across changed since then, and categories ing up with formulation changes; image to create an effective platformall the skincare categories, teenagers such as fairness creams, shower gels, it is also imperative to create strong for the launch of male groomingcontribute to a sizable 20 percent ofthe total market value as of 2010. Inspite of this opportunity, there areonly a few brands in the market thatcater specifically to the needs of thisconsumer group. Johnson and Johnson’s (J&J’s)Clean & Clear is the most promi-nent player in this space, and thisfirm’s journey over the years has beensomething of a tight-rope walk withrespect to product positioning atretail outlets and building the rightmarketing pitch for teenagers. Asidefrom working on these aspects, J&Jhas also increased its product portfo-lio under the Clean & Clear brandwith the launch of an entire rangeof skincare products, using claimsspecifically designed to resonate withteenagers such as “daily care” and“acne control”. Even with these ef-forts, the buying habits of the aver-age shopper are testimony to the factthat the brand has not had sufficientpromotion through traditional me-dia and in-store marketing commu- 26 • PROGRESSIVE GROCER • JunE 2011 AHEAD OF WHAT’S nEXT WWW.PROGRESSIVEGROCER.COM
  4. 4. products in categories such as deo-dorants and fairness creams. their presence in the Indian market by claiming to deliver salon-quality Anti-ageing solutions Secondly, tangible product claimsare a safer route to adopt compared results through home skincare prod- ucts. Both Olay and neutrogena are (valued at over Rsto those driven purely by sensory at-tributes, in the case of personal care examples of brands that have rid- den on this wave of premiumisation, 1.1 bn as of 2010)products targeted at Indian men. which is increasingly becoming effec- have grown at a CAGR of almost 25With claims such as “up to two tones tive among the affluent, urban Indi-fairer” and “48-hour confidence”, ans. These brands have been very suc- percent over the lasteven skincare brands are moving to- cessful in building a market for theirwards efficacy-led claims, which talk offerings, which are priced at a signifi- five years.about how the product benefits the cant premium over the others offeredconsumer rather than highlighting a in the same or allied categories.sensory issue such as fragrance. What has worked in favour of In the light of the two lessons de- these companies is the fact that theyscribed above, manufacturers should first built awareness about tangiblecapitalise on the fact that there has product benefits (which they had abeen a substantial increase over the very high success rate of delivering)last few years in the use of products through advertisements and productsuch as moisturisers and sun care literature, and clearly described howitems among Indian men. their products differ from the com- petition. Furthermore, the fact thatCrème de la crème they involved celebrities helped to a large extent in creating the right Amid the efforts to make prod- brand perception. Building on this, salons or select modern retail chan- to come – yes, we are talking aboutucts accessible to the masses, vari- the brands chose to not only reach nels, but also made their products anti-ageing solutions. not only has itous brands have effectively built out to customers through exclusive available through outlets such as caught the fancy of many an average pharmacies. Given the fact that these consumer, but the fact that it is the brands have established the right fastest growing segment in the Indian platform, and Indian consumers’ skin care market (valued at over Rs 1.1 tendency to spend a small premium bn as of 2010, and grown at a CAGR on “proven efficacy”, they have the of almost 25 percent over the last five set the right precedent in testing years), stands testimony to the immi- the waters for mass premiumisation nent opportunity in this space. among Indians. This is no surprise, given a whole In categories such as body care generation of Indians who want to and hand care, there is still a lot of ‘stay young’, and another who want “education” required to build a need to ‘look young’. While the mantra for such products among the major- for getting consumers on-board in ity of consumers, but personal care the case of the former has been ‘catch companies can take a leaf out of the them young, to keep them young’, it book of brands such as Dr. Scholl’s has needed little convincing from the in foot care. Dr. Scholl’s is a very part of effective brands, to establish a well-known foot care brand in In- market for the latter. dia – in fact, it was the first to en- Brands have lived up to the hype ter the market – that started with a by creating solutions in a variety of small range of products, but now has product formats, which are both easy a huge selection of offerings to ad- to use and provide a long-lasting, ef- dress cosmetic, epidemiological and fective cover to the signs of aging. therapeutic needs associated with These products are being used by feet. Although these products are of- consumers as a quick solution before ten slightly more expensive than the probably attending a party, or even alternatives, the company has spent as regular solution targeted at under- a lot of time and effort in success- eye puffiness or skin firming. Going fully building an understanding of forward, it is important for brands and demand for foot care products to channelise the consumer interest among Indians. that already exists in the category, into regularised and specific usage Fighting the Signs of occasions and not just rely on bene- Ageing fit-led marketing claims. n This is one skincare market seg- Rahul Ashok is a consumer markets ment that is not ageing for some time consultant at Datamonitor. 28 • PROGRESSIVE GROCER • JunE 2011 AHEAD OF WHAT’S nEXT WWW.PROGRESSIVEGROCER.COM