Burgeoning local beauty brands "glow" in the dark times

Overview

One of the fastest-growing markets in India, Beauty & Personal Care, continues to be refined at the helm of consumer preferences and trends, intense industry competition, technology and innovation.

A joint study report by Google, Kantar and WPP titled ‘Connected Beauty Consumer report’ released in November 2020 highlighted that the Indian beauty & personal care industry is expected to grow to Rs. 111,000 crore (US$ 15.17 billion) by 2024, from Rs. 73,000 crore (US$ 9.98 billion) in 2019, with e-commerce being the game changer.

Covid-19 has not only changed the market dynamics, but also skewed consumer preferences towards the beauty & make-up industry. Some of the notable trends and drivers in the industry are as follows:

Trends in the Beauty & Personal Care Industry

Brands going online

Many beauty brands are now investing in their own online stores for two reasons—consumer reluctance to visit crowded shops and their preference for e-commerce. Homegrown and foreign luxury beauty brands such as Kama Ayurveda, Forest Essentials, SUGAR Cosmetics and Kiehl’s have recorded >50% sales through e-commerce during the pandemic.

A report by Facebook India, in association with Boston Consulting Group, explained how online buyers for beauty products have increased 1.35x during the pandemic. The report also revealed that at least 51% consumers will continue and increase online spending in the next six months out of which 43% will account for cosmetics.

Customised digital consultations

Kiehl’s, a beauty brand owned by L’Oreal, and Kama Ayurveda, a homegrown brand, have launched online video and live chat consultancy for customers to understand their requirements and choose products accordingly. Similarly, luxury ayurveda brand, Forest Essentials, has launched a personalised consultation service ‘Speak to Your Store’ on its website for customers to connect with ayurveda experts and doctors for product recommendations and consultations on lifestyle and ayurvedic dosha. Customers from smaller towns form the majority users of this service. The Body Shop has also switched to live chat assistance; brand experts and tutorials are readily available to customers via social media channels.

Demand from tier II and III towns

Popular beauty brands have recorded a rising demand from small towns. Ms. Shikhee Agrawal, Assistant Vice President at Kiehl’s India, shared her observations that the change in work dynamics has fuelled this trend. Employees who migrated from large cities to their hometowns (to work from home) started ordering products online and eventually, introduced their friends and families to these brands. Mr. Vivek Sahni, CEO and Co-Founder, Kama Ayurveda, highlighted that third-party platforms such as Nykaa, Purplle, Myntra and Amazon are very popular in small towns, prompting beauty brands to invest in digital channels.

Augmented Reality — Future of the beauty industry

Ms. Namrata Soni, a renowned celebrity make-up artist, in an interview with the Indian Express stated that Augmented Reality (AR) is the way forward for the beauty industry. She launched three Beauty Filters for users can see the virtual reality on themselves before choosing the right products. The Beauty Filters were developed by Graphixstory, a Kolkata-based, tech-driven advertising studio.

Ms. Vineeta Singh, CEO, SUGAR Cosmetics also explained how AR helped customers choose the right cosmetic shades suiting their faces/skin tones.

Mr. Anil Chilla, Chief Digital Officer, L'Oréal India shared that their brand acquired Modiface, an AR company, to offer virtual make-up, hair colour trials and personalised beauty consultations via video chats to clients. He revealed that the lockdown has increased engagement 2x via online AR tools.

Boddess, India's finest beauty-tech retailer, has also created an in-house AR/VR tool, allowing customers to diagnose their skin problems and try make-up before choosing the right products.

Influencer marketing and social media directing purchase decisions

The ‘Connected Beauty Consumer report’ revealed that 50% beauty consumers use social media and online videos such as YouTube, and 40% consumers do online research before buying products. Mr. Sreedhar Prasad, a Bengaluru-based independent internet business expert, highlighted that influencer marketing plays a major role in determining purchase decisions. So, most beauty brands are now building their digital presence through content and active influencer marketing promotions to attract aspirational consumers.

Drivers of Beauty and Personal Care Industry

PM’s vocal for local call

Mr. Narendra Modi has stressed on the need to be ‘vocal for local’ to endorse and promote locally made and sourced products. The PM’s call saw many Indian labels blooming within a short span. Some of the popular Made-in-India brands include MensXP Mud—An exclusive men’s beauty brand, one of India’s first brands offering products that are free of parabens and sulphates; Juicy Chemistry—A brand promoting 100% organic beauty products; Mamaearth—A fast-growing safe-certified babycare, skincare and haircare brand; and MCaffeine—India's first caffeinated personal care brand.

MCaffeine Founder, Mr. Tarun Sharma, quipped in an interview with the Indian Express, “we have seen a tremendous amount of change in people’s choices. In fact, the Make-in-India campaign did the same thing last year. People have been showing more love and we are grateful for the same”.  

India as an ayurvedic hub

According to Research and Markets report, the ayurveda market in India was valued at Rs. 300 billion (US$ 4.10 billion) in 2018 and is expected to reach Rs. 710.87 billion (US$ 9.72 billion) by 2024. India is known for its ayurvedic heritage across the globe. Most people are drawn towards ayurveda products as they are 100% natural and have healing properties. Many local beauty brands such as Khadi Essentials, Neemli Naturals, SoulTree and MamaEarth have banked this idea by manufacturing ayurvedic beauty products for nature lovers.

Environment sustainability goals are a priority

Sustainability and organic products continue to be the mainstay for many consumers. Most beauty brands are drawing attention through creative, environment-friendly business models. Tjori, another skincare brand, has always been a firm believer of age-old recipes. Its founder, Ms. Mansi Gupta, shared that the brand does not use plastic packaging, but garment bags or ‘potlis’ to pack products. Juicy Chemistry Co-Founder, Ms. Megha Asher, shared that their products are created in a way that causes least or no harm to nature. The products are entirely biodegradable with minimal recyclable packaging.

Beauty not limited to gender anymore

The Connected Beauty Consumer report revealed that male consumers continue to show interest in beauty categories online. Haircare products such as styling gels and shampoos, and skincare products such as shaving gels and face washes find the top spots in men’s beauty rituals.

The Road Ahead…

Technology and innovation are the future of the beauty industry. Virtual make-up trial, 3D-printed make-up tools, and customised cosmetics and skincare products are now part of the pipeline for beauty brands across channels. This evolution has inspired creative minds to launch their start-ups, creating new verticals and making the most of the changes.

From targeted content to YouTube tutorials, augmented reality and product personalisation, technology is the greatest enabler and will continue to act as an accelerator for the Indian beauty industry. 

On a mission to move away from chemical to organic—Indian beauty brands will continue to choose products with safer ingredients by tapping into the country’s ayurveda reserves.