The cosmetics industry in India is growing rapidly at 20% annually and is expected to reach Rs. 20,000 crore by 2014. There is a high degree of competition in the industry, especially in the men's segment where Emami holds 50% market share for its Fair & Handsome product. Technological innovation is important in the industry given the need for new ingredients and product formulations. The industry is affected by changes in the national economy, local economies, competition from overseas, legislation regulating ingredients and labeling, and demographic changes in the population.

1. Industry Analysis
Cosmetics Industry BY,
GROUP-8
MAZHAR
PAVAN
PIYUSH

2. Potential Growth Rate
 Rapid growth over last 2 decades.
 Industry is growing at around 20%.
 According to ASSOCHAM, India’s cosmetics market has been
growing at an annual pace of 20% and is expected to reach
Rs.20, 000 crore by 2014.

3. Ease of entry of new firms into
industry
 Total 66 skin types, India has 40 types of skin tones.
 Huge opportunity.
 Growth with new products.

4. Intensity of competition among
firms:
 Cosmetics Industry has high competition Intensity.
 Low in men's segment
Company ( product ) Market Share ( % )
Emami ( Fair & Handsome ) 50%
HUL ( Fair & Lovely Max ) 25%
Nivea ( Men Whitening ) 10%
Garnier ( Men’s Powerlight ) 10%
Others 5%

5. Degree of product substitutability
 High degree of product substitutability
 Presence of many players
Degree of dependence of complementary or
supporting products and services
 Degree of dependence of complementary or supporting products
and services is moderate.

6. Degree of customer bargaining power:
 Customers bargaining power is very high & they demand for favorable prices
 To retain customers is a very challenging task for the cosmetic companies
 Consumers do not always stick to one brand of skin care or hair care because
the switching costs are very low
 Brand awareness is more in urban India, but brand loyalty is less towards the
products
 whereas brand awareness is less in rural India, but brand loyalty is more

7. Degree of technological sophistication in Industry:
 There is high need for technological sophistication in this industry
 New synergetic actions with different ingredients.
Rate of Innovation:
 Remarkable increase in R&D investments in this industry in recent years.
 P&G is considered to be one of the companies dealing with cosmetics with the
best innovation strategies.

8. Management team of Emami
Name Designation
R.S.Agarwal Chairman & Founder
Prashant Goenka Head International business
N H Bhansali CEO – Finance strategy and business development
AK Joshi Company secretary and AVP Legal
Shyam Sutaria CEO - International business
Dhiraj Agarwal Head Media department
R K Surana President - Operations and commercial
Krishna Mohan CEO - Sales supply chain and human capital
Punita Kalra CEO R & D and innovation
Chandra Kant Katiyar CEO Technical (Healthcare division)

9. MACRO ENVIORNMENT

10. Effects of the changes in national
economic activities
 The Indian market for high-end products and services is estimated at
over 400 billion rupees in next three years on the back of rising per-
capita income and evolving consumer trends.
 A study by Nielsen in 2012 found that 77% of the Indian women are
willing to use their extra income in buying health & beauty care
products and increasing working women numbers suggests that the
skin care industry is in boom even the national economic activity is
slow.

11. Effects of changes in local economy for the business:
 According to RNCOS Industrial Research Solutions, “Indian Skin Care Market
Forecast to 2015”, people, in India, now gives more importance to branded
products.
 So they are increasingly shifting towards more customized skin care solutions
even when the Local Economy is down.
Competition from overseas:
 More chances for foreign companies to enter into India
 Highly attractive market

12. Impact of Legislation on Business:
 Drugs and Cosmetics Act and the Animal Cruelty Act.
 The Fair Packing and Labelling Act, established in 1966, require
consumer products to contain a proper informative label.

13. Effect of demographic changes on
business:
 Age:
 Direct impact on cosmetics industry
 Income:
 As income increases spending on cosmetics will increase and will have
a bad impact during Recessions.

14. THANK YOU