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India Beauty Market
- 2. • Country Overview •Beauty Market Overview • Beauty & Personal Care Market Segmentation • Compliances / Operations • Pricing • Investments / Go-to-Market Overview 10/1/2015 2 Content
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- 4. 10/1/2015 4 •Sub-continental inarea 3.3 M km2 •5,653 km of coastline •3214 km N-S, 2944 km E-W •Desert,plain,tropic,mountain,ice Geographica l size : •1.3 Billion (2nd) •65 % <35 Population : •8 major religions •29 States & 7 Union Territories •22 official languages •800+ major dialects Diversity & complexity •Secular & plurality •Active Outspoken press >35k publications • > 800 M registered voters • 75% of population, mobile users Largest democracy: •Growth Expected to grow at 7.6% in 2015 & 7.7% in 2016 surpassingChin •Service >50% ; Private =75% of GDP •Increasinglyinvestment friendly Economic Emerging Superpower: India – Some Key Facts
- 5. 1.2 Billionpeople 1.5% growth p.a. 65 years life expectancy 46 cities > 1 million 65% (793m) of population < 35 year 81% (988m) of population < 45 years Median age 25 years 10/1/2015 5 504M 42% 312M 26% 264 M 22% 144 M 12% 0-19 years Techno Babies 20-34 years Impatient Aspirers 35-54 years Balance Seekers 55+ years Arrived Veterans 350 M Middle Class 17 M earn > $ 90,000 p.a. Urban population : 32% Gender ratio: 1:1 80% Hindu; 14% Muslim Literacy 82% Male; 65% Females Per capita income 2014 $ 1627 compared to $ 1508 in 2013 India – Demographics
- 6. North • Delhi • Politicalseat & capital • Agrarian • Cult of landed gentry • Flamboyant & flashy • Strong in cosmetics • 28% of Retail sales • Greatest mall density East • Kolkatta • Culturally rich • Marxist/communist • Subdued consumerism • Discreet wealth • Strong in skincare • 8% of Retail sales • Largely untapped 10/1/2015 6 South • Bangalore • Lush & tropical • Heart of IT India • Service industries • Gulf money a driver • Colourful • Highest level of literacy • Matriarchal family structure • Strong in skincare West • Mumbai • Commercial hub • Cosmopolitan (Mumbai) • Better infrastructure • Strong in fragrances & cosmetics • 40% of Retail sales India is more than the sum of its parts – “it is the sum of its contradictions”
- 7. Classification of IndianCities Tier I (> 1m Popn) Tier II (= 1m Popn) Tier III (< 1m Popn) Delhi, Mumbai Kolkatta, Bangalore, Chennai Congested realty sector, High property prices Major international brands present, Self indulgence on the rise, High brand awareness, High media consumption, Saturated markets. Pune, Hyderabad, Jaipur, Lucknow, Ludhiana, Chandigarh, Noida… Available properties. However, prices on a rise. Govt. of respective states focusing on infrastructural facilities and SEZ’s. Aspirant consumers, high disposable income, Lack of competition. Nasik, Trichy, Amravati, Raipur, Kanpur, Guwahati, Bhubhaneshwar… Real estate markets yet to establish. Substantial potential demand Consumers are exposed to brands thru sachet marketing. Early mover advantage in terms of market entry.
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- 9. 10/1/2015 9 Currently… smaller than wecan think But…. Future… probably larger than we can imagine India – Beauty Market
- 10. Total Retail Market:$ 600.0 Billion (2015 est.) Organized Retail: $ 48.0 Billion 8.0% of Total Retail E Commerce : $ 6 Billion 1.0% of Total Retail Personal Care market : $ 8 Billion 1.3% of Total Retail & 17%of Org. Retail Beauty & Cosmetics : $ 1.8 Billion 22.5% of Personal Care 10/1/2015 10Source : BCG, RAI, Industry Estimates & Industry News India – Estimated Beauty Market Size
- 11. Products supplied on consignmentin most cases BAs, Fittings & Marketing on distributors’ account Strong wholesale & grey market Dept store type & high street retail is limited. Large net work of small multi product retailer, local tertiary city stores Little opportunity for large visual space; all of it on hire Price sensitive. Low switching costs for consumers Distinction between mass, masstige & prestige is hazy The unorganized market size is 3-4 times of organized retail market. Heavy launch costs on new products (in terms of advtg, launch promotions, free samples) 10/1/2015 11 Characteristics of Indian Beauty Market
- 12. Wellness Cosmetic Beauty Technology Growth Drivers ofIndian Beauty Market Focus on Natural & Organic products. Growth in demand of essential oils. Increased awareness about Cosmetic centers , Cosmetic products Upsurge in services at Spas & Wellness centers Urban population is more focused on Health & Fitness Growth in skincare awareness . Increase in demand of treatment prods. Aspirational consumers willing to experiment with hair colors & treatment 90% of population are mobile users of which > 70% are smart phone users Digitally connected consumers. Social Media very popular Videos, Virtual demos, bloggers very popular in the Beauty segment
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- 14. Skin Care, $1.28, 16% Cosmetics, $0.48 , 6% Fragrances, $0.08 , 1% Bath, $3.68 , 46% HairCare, $2.48 , 31% Indian PersonalCare Market ~ $ 8.0 Bn The skincare market is still small but growing at a high rate and away from basic creams & moisturizers to specialized products such anti-wrinkle, eye defence Speciality products, cosmetics & deodorants are growing at 20%+ per annum, propelling the total personal care market in India to double by 2016-18 Personal Care Market Segmentation in India based on category
- 15. Super Prestige (above $100) Prestige ($60- $100) Premium ($30-$60) Mass Premium ($10 - $30) Mass (Below $10) Source: Market Segmentation is on the basis of avg. price of a beauty product or service (Survey by Argus CMPO) 10/1/2015 15 Beauty Market Segmentation in India based on pricing
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- 17. 10/1/2015 17 1. MandatoryRegistration. 2. Time taken : 90 to 180 days depending upon documents clearance by the FDA authorities. 3. General documents required are as follows : • Power of Attorney in the name of the Importer / Distributor • Original or copy of the labels bearing the name & address of the manufacturer. • Free Sale Certificate (FSC)/Marketing Authorization letter/Manufacturing License, if any • Product specification and testing protocol. • List of countries where Market Authorization or import permission or registration was granted. • Pack insert, if any • Soft copies of the information about the brands, products and manufacturer. • Composition for Lab Analysis of the products • Declaration that the products are not animal tested. Registration of Beauty Brands in India
- 18. 10/1/2015 18 Cosmetic productswhich are imported into India as bulk for repackaging for 100% export to other countries will not require registration certificate. In such cases the importer has to obtain the necessary permission from CDSCO HQ. Importer must give written undertaking that these products are not released for domestic sale. FDI for Beauty Retail : 100% on single brand 51% on multibrand retail Operations in India Brands can also set up their operations in India through : • Liaison /Representative Office • Project Office • Branch Office • Pvt. Ltd. Co. Opportunities for Salon brands could be : • Franchising • JV Partners Other Operation Opportunities in India
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- 20. 10/1/2015 20 Summary ofCoefficients in Pricing Note : Pricing coefficients will vary depending upon various factors like margin terms with distributors & marketing investments. Above chart is indicative.
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- 22. • Product Registration •Product Trainings • Technical Trainer (Important for professional products) • Trade Offers • On Counter Promotions • Sales Incentives • Brand Building (online / offline ) 10/1/2015 22 Areas of Investment
- 23. Brand Regional Distributor Wholesaler SuperStockist Consumer Small Retailers Sub- DistributorRetailer Exclusive Distributor/ Importer Channels of Distribution
- 24. BRAND Price Positioning Market Roll Out Distributor Assessment Brand Building Competition Price Retail Price ExportPrice Brand Portfolio Financial Stability Sales Distribution Network Establish Tier 2 & Tier 3 cities Invest in Trainings Invest in counter promotions Leverage technology Online/Offline integration PR and Media Spend Smooth Entry to Indian Beauty Market
- 25. Phone: +91 224 2649627 +91 8080856256 Email: info@arguscmpo.com CONTACT US: WELCOME TO INDIA
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