Storyboard18 | After Nykaa's IPO blockbuster, Indian beauty industry looks at a big boom in 2022

According to a report, the Indian beauty and personal care industry was valued at Rs 54,558 crore in 2020. Image: Shutterstock

Whoever thought masks will deter the growth of beauty products is in for a surprise. Just last month, Google trends saw a record-breaking search for ‘What red lipstick does Taylor Swift wear’. According to reports, the search went up by 800 percent.

Clearly, beauty is trending. While Nykaa led the charge with a stock market debut in November 2021, a host of other homegrown beauty and skincare labels in India are ready to take the next big step for their brands. While some are planning to go public, some are eyeing international and offline expansion. Experts say the segment is growing like never before.

According to a report by market research and business intelligence company EMR, the Indian beauty and personal care industry was valued at Rs 54,558 crore in 2020. The market is further expected to grow at a CAGR of 11 percent in the forecast period of 2022-2027.

What brands are up to in the beauty-verse

Global brands entering India are contributing to a significant chunk of sales in the segment. Whereas homegrown brands like health & glow, Kaya, Plum, MyGlamm, WOW Skin Science, Colorbar, Sugar Cosmetics, and many others are also scaling up their offerings and focusing on marketing communication to boost profitability and facilitate aggressive expansion plans.

Colorbar Cosmetics, for instance, spent Rs 50 crore in the last six months towards various marketing initiatives and plans to push the number to Rs 200 crore in 2022. The company plans to go public in three years. The brand recently collaborated with Sony Music Entertainment, where they engaged 1,000 influencers across pin codes to promote their new lip colour range Sinful Matte. The traffic on their social media pages instantly went by 3-4 percent in a day.

“Our brand objective is to have every consumer wear Colorbar, irrespective of their location and gender. We want to promote our skincare range which has grown from being 10 percent of our business to 30 percent of it. We want to go to the global market,” says Samir Modi, Founding & Managing Director, Colorbar Cosmetics.

Colorbar has a presence in markets like Sri Lanka, Maldives, Malaysia, Bangladesh, and Canada, and the next targets are the UK, Europe and the Middle East.

Just like Colorbar, other brands also saw record growth in the last year and a half.

Chaitanya Nallan, co-Founder and CEO at SkinKraft Labs, says they witnessed a 100 percent growth over the last year with revenues at Rs 155 crore in FY21. And they expect it to triple in the next three years with new categories, marketplaces, new SKUs, the enhanced share of voice and, new delivery mechanisms.

Millennials and Gen Z in metro, tier 2-3 markets driving growth 

Nykaa has shown the way to others in the segment and the boom in the Indian beauty and personal care sector is here to stay, says Jai Lala, CEO at Zenith.

“The need for grooming has seen a huge uptick in India and not only in the metro markets but also in the Tier II and Tier III markets. The demand is coming from millennials and Gen Z who are driving the growth in the sector. Customers are looking for specialists in the segment for their preferred products and services and the likes of Nykaa and others are serving the purpose,” Lala says.

Globally too, according to a Goldstein market intelligence report, the cosmetics industry is expected to reach $412.10 billion by 2024—from an estimated $299.12 billion in 2016, growing at a CAGR of 4.09 percent during 2016-2024 owing to the demand from the millennial population.

Eye on fast expansion offline and outside India 

Coming back to the Indian market, aggressive expansion is something homegrown brands in the segment are looking at.

“While India itself is a 10x opportunity, we are actively working on expanding internationally as well. While we continue to gain market share in online marketplaces, we also plan to expand our presence in the offline space as well. The offline expansion will see the addition of at least 50-odd exclusive brand outlets being planned at a total cost of Rs 15-20 crore over the next two years,” says Shankar Prasad, Founder & CEO, Plum.

Expansion for Plum will also happen with the company tapping into premium chemist stores, make-up stores and smaller retail shops.

Power of personalisation 

Personalisation is another area brands are building on.

Multi-brand retailer health & glow, for instance, has a curation approach to personalisation. The company’s managing director and CEO K. Venkataramani tells us, “While express delivery apps and self-checkout transactions at our stores is something we have worked on for some time now, we are now focusing on curating a product range for individual customers and not bombarding them with options.”

Making the experience seamless and easy, he adds, “A selfie is what we’d need from the customer and we’d run a skin test to help them understand what they need and what they should use.”

Similarly, Kaya is also working on its AI assured tool to provide customised solutions to clients. Samyukta Ganesh Iyer, vice president and head of marketing, Kaya says, “We want to continue to stay ahead of the curve. But we want to leave the decision making part to the customer. They should know what they want for themselves. We want to be in a position where we can design or create solutions they want.” Kaya is also using their dermatologists to create relevant content on social media.

Curated content play

Content curation and influencer marketing is another approach Indian beauty and personal care brands are exploring to improve reach and scale.

Bangalore-based WOW Skin Science, for example, has gone big on engaging endorsers to popularise their brand. The brand has already got Bhumi Pednekar, Disha Patani, and Kareena Kapoor Khan on board to endorse their product line.

WOW also has plans to go public in the future. “We are still in the process of consolidating the brand and our product range in the market," says Manish Chowdhary, Co-CEO WOW Skin Science.

Chowdhary tells Storyboard18 that the company plans to focus on strengthening brand awareness and consumer loyalty in the coming months through new and innovative products, competitive pricing and a positive consumer experience of the brand and products.

He adds, “Once that is established, we will then look at an IPO.”

The thoughts and opinions shared here are of the author.