cosmetic products industry in india - full report

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Cosmetic Products Industry in India August 2013

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Cosmetic Products in India

FRPT Research 1

Table of Contents

Introduction .............................................................................................................................................. 2

Product Segmentation .......................................................................................................................... 4

Industry Structure .................................................................................................................................. 5

Overview .................................................................................................................................................... 6

Major Players and Key Brands ........................................................................................................ 13

Key Drivers and Trends ....................................................................................................................... 18

Recent Developments ........................................................................................................................ 19

Future Outlook ...................................................................................................................................... 21

Disclaimer .............................................................................................................................................. 22




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Introduction

Cosmetics is among the fastest growing FMCG segments in India driven by several

factors such as rising disposable incomes, heightened exposure to media and

increased awareness about personal grooming. The robust growth in per capita

income estimated around INR 61,564 during 2011-12 has resulted in improved life

styles with a willingness to pay for the extra edge on personality.

While women are the single leading customer segment for Cosmetics products, the

mens market is steadily gaining ground with an exclusive range of products.

Cosmetics products catering to the mens segment is now a mainstream segment

across metropolitan cities and urban markets.

Traditionally, toilet soaps and talcum powder have been the mainstay of the

domestic Cosmetics sector. New age products such as colour cosmetics, fragrances

and deodorants are now sought after products with an increasing market share. The

age group of consumers who regularly use Cosmetics products has also widened

considerably in the recent years. Modern retailing formats that offer complete range

of health & beauty products have improved visibility for the products. With

heightened media exposure, rural markets are opening up to Cosmetics products

and are witnessing high growth in demand.




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Multi national companies have a well entrenched presence in the domestic

Cosmetics sector. Players are positioning products at various price points to cater to

a large section of the population. Product innovation and sleek packaging are key

differentiators that are adopted for the premium end range. Herbal ingredients are

sought after and several domestic companies have an established presence in the

herbal market space as well.

Motivated by the buoyant demand in segments such as creams & lotions and

fragrance, the Cosmetics sector in India is set to witness robust growth in the

coming years.




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Product Segmentation

Product segmentation of Cosmetics sectors is provided below:




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Industry Structure

The Cosmetics sectors are largely organised with a significant presence of

both domestic and multinational players

The presence of unorganised players has reduced in recent years primarily

due to intense brand building and strong distribution networks

Fragrance sector has a sizeable presence of unorganized players accounting

for around 30% of the market

Cosmetics players largely operate on low margins and rely on volume-driven

growth

Product distributions are mainly through modern retailing formats and

convenience stores

Multi-level marketing and direct marketing approaches are used by few

multinational players mainly to cater to the premium segment

Shop-in-shop model is a popular format used in urban areas by companies to

showcase their Cosmetics brands




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Toilet soap segment commands a leading presence in the overall Cosmetics

sector

The market for toilet soaps stood at INR 90 billion in 2011-12 and the

segment is marked by high penetration levels

Soaps at the premium price range have a growing market and are largely

retailed through modern retail store formats

The market for premium soaps stood at INR 10 billion in 2011-12

Players have opted for product differentiation strategies and have

introduced gel and liquid soap categories such as face wash and hand &

body wash to drive growth

These newly introduced segments are an emerging market and have

registered healthy double digit growth rates of 40-50% over the last year

The fragrance market comprising perfumes, deodorants and roll-on has

grown rapidly and the market was estimated at INR 35 billion in 2011-12




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While mens products account for around 60% of the fragrance mark et,

products catering to the womens market are expanding rapidly

The fragrance market is expected to grow at around 30% per annum

during the next 2 -3 years

Perfumes are among the premium fragrance products accounting for around

40-45% of the overall fragrance market

Several international perfume brands such as Armani, Burberry, Calvin

Klein, Christian Dior, Hugo Boss and Polo have an increasing market in

India

Import of perfumes and toilet waters in India grew by over 60% during

2011-12 and stood at INR 3.2 billion

Deodorants market is highly competitive with a large presence of organized

players




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Deo spray market is witnessing a growth rate of 25% per year backed by

extensive marketing campaigns undertaken by the leading players

Deodorant products are positioned to tackle product odour and the

market registers peak sales during the summer season

Around 90% of deodorants are priced as mid range products to cater to

the mass market

Creams and lotions account for around 18% of the overall Cosmetics market

with an estimated market size of around INR 33 billion in 2011-12

Creams account for around 70% of the creams & lotions market with a

market of around INR 23 billion

Moisturising lotions segment have witnessed a range of new product

launches catering to the premium hand and body segment

Sunscreen products have a growing market and players are offering creams

and lotions with active sun protection formula




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Creams and lotions: Break up by segments 2011-12 (%)

Total market INR 33 billion

Fairness creams segment was valued at around INR 15 billion in 2011-12

with a sizeable market in South India

Mens fairness cream accounted for around 15% of the overall fairness

cream market in 2011-12 while anti-ageing cream market, valued at

around INR 2.6 billion, is among the fastest growing segments

Bleach cream is another noted product category within the creams and

lotions segment valued at INR 2 billion in 2011-12




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The talcum powder market was valued at around INR 13 billion in 2011-12

registering annual growth rate of 44% over previous year

The talcum powder segment is characterised by high brand loyalty and

has a sizeable presence of regional players

The talcum powder market is facing stiff competition from the deodorant

market especially in urban markets

Players are undertaking extensive marketing campaigns focusing on

benefits such as natural ingredients and de-odorising to drive the market

Double fragrance talcum powder is among the latest product innovation

introduced in the talcum powder market

Prickly heat powder is the fast growing category within the talcum

powder segment registering peak sales during summer season

Colour cosmetics segment registered a growth rate of around12.5% in 2011-

12 was valued at around INR 9 billion




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Major Players and Key Brands

HUL is the leading player in the Cosmetics market with a wide product

portfolio catering to all segments of the market

Proctor & Gamble, Reckitt & Benckiser, Heinz India and Johnson & Johnson

are the other noted multinational Cosmetics players in the domestic market

Godrej Consumer Products Limited, CavinKare, Marico and Emami are well

established domestic players that cater to one or more Cosmetics segments

ITC Ltd is a recent entrant in the Cosmetics market with its brands Fiama di

Wills and Vivel

Himalaya, Lotus Herbals, VLCC, Shahnaz Husain, Biotique, Banjara Herbals

and Dabur are among established domestic herbal cosmetic players with

growing market share.




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Toilet Soaps

HUL is the market leader in the toilet soap segment with around 50% share,

followed by Godrej Consumer Products Limited (GPCL) with around 10%

share

Other noted players include Wipro, Reckitt Benckiser and ITC Ltd.

Toilet Soaps: Key Players & Market Share (%), 2011-12

Total market: INR 90 billion

HULs Lux and Lifebuoy are the leading toilet soap brands followed by

Wipro Consumer Cares brand Santoor




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Talcum Powder

HUL is the market leader in the talcum powder category with its brand

Ponds followed by Johnson & Johnson

Cavinkare with its brand Spinz is gaining ground in the national

market

Talcum powder: Market share by brands, 2011-12, (%)

Total market INR 13 billion

Heinz India and Paras Pharma with their respective brands Nycil and

Dermicool account for over 70% of prickly heat talcum powder category




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Emamis BoroPlus Ice is the other popular brand in the prickly heat

category

Creams and Lotions

HUL is the market leader in the overall skin cream category with its brand

Fair & Lovely

Other established players are Emami, Procter & Gamble, CavinKare and

ITC Ltd

Several players have introduced unit packaging especially in rural

markets to counter the large presence of local brands

HULs Fair & Lovely brand commands major share of over 70% of the

overall fairness cream market

Emami Limited with its brand Fair & Handsome is the market leader in the

mens fairness cream category followed by HULs Fair & Lovely Max

Procter & Gambles Olay is the leading anti -ageing cream brand with a

market share of around 40%




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Fragrances

HUL with its brand Axe is the market leader in the deodorant segment

followed by Raymonds Park Avenue

Nivea, Set Wet, and Wild Stone are the other major deodorant brands in

the country

Marico recently acquired leading deodorant brands Set Wet and Zatak

Colour Cosmetics

Modi Revlon and Lakme are the top colour cosmetics players in the country

Revlon, Lakme, Colorbar, Maybelline, Lotus Herbals, LOreal are some of

the popular color cosmetic brands




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Key Drivers and Trends

The introduction of affordable unit size packaging across the entire range of

products is a key driver for growth and penetration in Cosmetics segments. Other

significant growth enablers include:

Increasing urbanisation, higher personal disposable income, and westernised

outlook

Increased awareness and need for personal grooming and wellness

Brand consciousness and preference for premium products

Growth of beauty service industry with the launch of spas and salons

Increasing women in workforce

Demographic dividend as well as changes in social trends, user perception,

product availability and innovation

Availability of climate specific and gender specific beauty products




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Recent Developments

The Legal Metrological (Packaged Commodities) Rules, 2011 has mandated

new rules for standard pack sizes of 19 FMCG products including toilet soaps.

Standard pack sizes permitted for toilet soaps including all kinds of bath

soaps (cakes) are 15g, 25g, 50g, 60g, 75g, 100g, 125g, 150g and thereafter in

multiples of 50g.

Australian skin care firm Intraceuticals is in on an expansion drive in India to

enhance brand presence.. Intraceuticals has six clinics in Mumbai, New Delhi

and Bangalore and plan to expand to 50 clinics in all major and mini metros

Footwear and apparel brand Woodland is extending to organic skincare and

bodycare products. The company had tied up with a Germany-based personal

care products company to bring 20 premium brand products

Domestic consumer products major, Marico, has launched its flagship brand

Parachute in body lotion and skincare segments.

CavinKare Chennai-based manufacturers of hair care, skin care and personal

care products has launched a double fragrance talcum powder, Cool Duet.




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The talcum powder has two fragrances a flowery minty fragrance and a

fruity fragrance which is activated when the user perspires.

Nivea India subsidiary of Beierdorf AG of Germany intends to expand beyond

the top cities in India and is planning to appeal to the younger generation

through focused digital presence

Wipro Consumer Care has relaunched its male grooming brand, Aramusk, to

include soaps, deodorants and talcum powder




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Future Outlook

The fragrances segment is expected to drive sales in the body care sector with

increasing demand for deodorants from tier II and tier III markets

Liquid soaps are increasingly being positioned as a wellness product and is expected

to reach out to the mass market to drive sales

Specialised products such as sunscreen lotions, exfoliating creams, skin whitening

products and under eye cream are expected to drive the creams and lotions market

With growing awareness about personal grooming, anti-ageing creams are set to

drive sales in the skin care segment especially in the urban and semi-urban markets

Unconventional product segments such as men s cosmetics are seen as growth

enablers for the future

Prickly heat powder category will drive the talcum powder market in the coming

years but overall talcum powder market is expected to exhibit dormant




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Disclaimer

The contents (Information, material, suggestions) have been provided for general information. The

information and opinions contained in the document have been compiled from publicly available

data or sources believed to be reliable. If the said content contains any mistakes, omissions,

inaccuracies and typographical errors, etc. FRPT Research assumes no responsibility thereof. The

company does not warrant the totality and absolute accuracy, adequacy or completeness of this

information and materials and expressly disclaims any liability for errors or omissions in this

information and materials herein.

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cosmetic products industry in india - full report

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