Indian Beauty Market: in for a makeover

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Indian Beauty Market: in for a makeover

Sunday, 06 February 2022 | Ritika Sharma

Indian Beauty Market: in for a makeover

Large-scale development of digital & manufacturing sectors has resulted in a booming demand for cosmetics in India, which is no longer restricted to urban centers, but equally powerful in rural areas, writes Ritika Sharma

With the ever-evolving economic and social conditions, the manufacturing and digital sectors in India have made the country a force to be reckoned with. With an improved quality of life, India’s personal care market saw an instant surge, to the point where predicted growth between the 2018-2023 period (before the health pandemic) was 9.7%, according to Euro monitor International. However, since its outbreak, the global pandemic has certainly played a significant role in slowing down the country’s evolution of the cosmetics industry. Large-scale development of digital and manufacturing sectors has resulted in a booming demand for cosmetic products in India, which is no longer restricted to metro and mini-metro urban centers, but equally powerful in rural areas.

Gauging the Indian beauty market

International Mass beauty is a calculated sector in India as per Euro monitor, with a market value of more than $11 billion. This is followed by hair care and personal hygiene products that showcase an unwavering market value of over $3 billion. Given that retail has expanded drastically in the online space, a lot of new and innovative businesses have mushroomed to fill the gap in the market. Regardless of the setback people faced due to the pandemic, the beauty industry, albeit at a slightly slower pace, showcased resilience.

However, taking into account the repercussions faced by people due to the pandemic, a large number of consumers began to consider products that were ethically sourced, packaged, and made, thereby creating a global shift in trends. Today, the clean beauty market is estimated to reach $22 billion by 2024. Due to digitisation, the new age consumer is exceptionally aware, conscious of their environment, and demands products that align with their values. These ‘clean’ brands contribute anywhere between 5-10 percent to the overall category of the beauty and skincare business in India. Given the emerging trend of ‘skinimalism’ — a term that describes using the bare minimum that your skin needs, and embracing your skin with all its flaws and strengths — it is easy to assume that consumers will continue investing in ethical, organic products built on sustainable practices and take a holistic approach to beauty.

Even as the post-pandemic complexion of the global beauty business sees a change, the $11 billion Indian market as per Statista continues its makeover with brands, finding ways to tap India’s young consumer. Expected to become $30 billion by 2025, the Indian beauty business is betting big on multi-brand online stores, driven by key trends — the increasing number of smartphone users in the country, the penetration of the internet, the continuing rise of India’s young, aspirational workforce, among others. Post pandemic, consumers are spending money on small indulgences during economic downturns and moving towards ‘revenge spending’ and ‘lipstick effect’ which has contributed to the growth of the beauty and skincare market size.

In addition to this, digitisation plays a huge role in changing the fabric of the beauty sector. For instance, connecting brands to consumers, introducing international brands, providing access, and setting new trends amongst beauty aficionados. This has simultaneously resulted in elevating standards consumers expect and pivoting with changing times to keep itself fresh, relevant, and innovative.

Diversity of the market

India is a diverse physical market — creating a ‘retail experience’ at scale is capital and time-intensive — and it still runs the risk of not finding ‘critical mass’ as one goes deeper in the population strata. Well-being in the definition is far more comprehensive than health or wellness — an ideology Boddess has embedded — as it considers a broader universe of personal factors and speaks to the goals of a well-rounded life. Fueled by the informed ideology and mass influence of younger generations like Gen Z, who are hyper-aware of social and environmental issues, the future of consumer health and wellness is proactive, mindful, and motivated towards well-being. There may never be a better time to be a beauty consumer or brand.

Beauty and self-care are becoming synonymous

The Indian beauty market is witnessing an acceleration in the self-care sub-sector. More consumers are now taking proactive steps to achieve a more sustainable and holistic approach towards their beauty regimen that serves them in the long term. We believe that the slow beauty philosophy explores the idea of remaining young, promotes the spirituality of holistic beauty & wellness, celebrating consciousness and self-expression — our ideals about ultimate beauty at large. One of the core principles of the slow beauty philosophy is to engage in practices that prioritise feelings and encounters of joyfulness.

As briefly stated earlier, customers have taken an ethical approach to their habits due to increased global awareness and exposure. The key focus to ascertain product value has now shifted towards ingredients that go into a product. With this, one can easily forecast a considerable rise in the “conscious” beauty trend. Continuing to look forward, we can also expect our make-up to double-up as skincare. A recent Mintel report reveals that 50 percent of consumers now prefer to purchase hybrid cosmetics with skin benefits, a burgeoning beauty category that is set to blossom next year. Producing make-up with skincare characteristics is a priority for both niche brands and household names.

However, as we consider conscious beauty, one of the more important factors that come into play is the impact that beauty has had on mental health. In the endeavour to make beauty a holistic approach, one cannot simply bypass addressing the repercussions of conditioned beauty standards. Hence, playing a catalytic role in the market of beauty and skincare taking initiatives to become more inclusive and gender-fluid. With times and technology constantly evolving, the industry has moved to social and Livestream selling through ‘social media influencers. Global brands are signing trans models and actors, K-pop stars, social-media influencers, promoting products that are gender binary for that matter. We can expect more communication in the coming year from beauty brands that will be bespoke, personalised but not hinging on any specific gender. It’s taken a long time for the beauty world to think beyond the gender and fair skin box, but we’re definitely on our way to becoming more inclusive today. Skincare, makeup, and hair care have all focused on the needs of those with the clichéd ‘fair skin and straight hair’ look for decades. But with the emergence of strong beauty markets around the world, it was only time till the rest of the spectrum came into focus. The Indian beauty market has majorly consisted of international labels till a few years ago, which meant that the products dominating our beauty aisles were more suited to the brands’ home markets, as opposed to Indian skin. However, several homegrown and international brands are now developing product lines especially for melanin-rich skin, recognising that India’s needs are different.

Accessibility of international brands

Millennials believe that the products they put on their skin can impact their health and they are seeking the same clean label transparency in beauty products. Their purchase behavior supports this — 40% of millennials report increasing their purchases of natural skin and hair care products in the last year.

Self-expression and creative freedom are important to Gen Z, and experimentation plays a significant role in that sense of self-discovery. Gen Z sees makeup as a form of creativity and is seeking inspiration through video or social content. Earlier, a beauty store would cater to a limited captive audience, primarily to those who resided near it. Now, connecting users across locations is much easier because of progressive leaps in technology — connecting billions of users at once. Such advancements have commoditised technology in a manner that has never been witnessed before.

The future of beauty will reside in an Omni channel experience, bringing offline and online closer with the advent of a host of digital tools to enhance the consumer experience.

Another way that the market has adapted and made skincare and makeup more accessible to a wider audience is through mini-size products. Initially aimed at branching out to the tier 2 and 3 demographic — as mini products bring down costs — small packs have made their way to the bags of women across all ages and income groups. From convenience to portability, it is no surprise that miniatures are a hit in the market!

Shift enabled by technology & beauty going virtual

However, given that we are now entering a tech-dominant era, the real trendsetters in the beauty business will be brands offering hyper-personalized experiences to consumers. An example could be Boddess’ focus on AI and AR technology, skin and makeup diagnostic tools that have set the growth of our beauty business. Personalised packaging — name engraved on a lipstick or a customised moisturiser formula that penetrates deeper into the skin — will be a trend to watch out for. Moreover, brands in the coming year will increasingly go ‘phygital’, ensuring both online and offline experiences.

In addition to the pandemic causing a digital revolution in the skincare and makeup industry, one of the post-covid shifts in sales would be the male market. Male-marketed beauty and grooming is on the rise and is a sector expected to generate global sales of $81.2 billion by 2024. This is partly due to the lockdowns — when men experimented with products comfortably at home. But it’s down to a gradual evolution of the norms around how masculinity is defined, alongside our collective interest in self-care and the beauty brand boom of recent years offering men more product choice as well as agendas they can align with.

To transform the beauty and skincare shopping experience for its patrons through the perfect blend of digitisation and bespoke customisation, brands should aim to offer personalised product solutions, if done well. In keeping with the current scenario and the way forward, integrating augmented reality and virtual reality to bridge the digital and physical world is the future. Such tools help customers navigate solutions and seek recommendations for themselves while staying within the safety of their homes. Backed by Consumer data sets, machine learning, and augmented reality, the tools enable brands to diagnose beauty issues faced by several consumers, all while understanding consumer psychology. This enables consumers to have an enriched shopping experience.

Albeit over a year later, Covid-19 continues to shape the space, but brands are now better equipped to deal with the seismic shift in consumer values and expectations. In 2022, the beauty industry is taking with it learnings and permanent shifts from the past year. And while some trends end up fizzling out, others will only expand their reach. In light of the above, let’s briefly recap on the beauty trend forecast that might take over the industry this year:

  •  Sustainability: With access to more information, consumers have taken the path towards a more wholesome beauty regime. The focus has now shifted to overall well-being and feeling good within — a strong mind and healthy body.
  •  Clean beauty: As a by-product of holistic beauty and wellbeing, consumers are incorporating ethical practices into their consumer habits. From ethically sourced ingredients, vegan products, to environmentally friendly packaging, people are gravitating towards products that not just help their skin and health but also their ecosystem.
  •  Natural look: As we delve further into the concept of holistic wellness, we become more comfortable in our own skin. The trend of minimalism comes from realising that beauty products are here to enhance beauty.

The author is Founder & CEO, Boddess, [House of Beauty]

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