SKIN CARE IN INDIA - ANALYSIS

Country Report | Jun 2019

HEADLINES Market Sizes

Skin care registers retail value growth of 10% to reach sales of INR128 billion in 2018 Sales of Skin Care
Demand for Ayurvedic products leading to premiumisation Retail Value RSP - INR million - Current - 2004-2023

Average unit prices increase further due to premiumisation in skin care 127,970 Forecast
Hindustan Unilever leads the category with a value share of 44% in 2018 250,000

Skin care is anticipated to register a 10% current value CAGR (5% 2018 constant value
CAGR) over the forecast period to reach INR208.9 billion in 2023 200,000

PROSPECTS
150,000

Brands shift focus from selling to educating consumers about skin care
in effort to build lasting relationships 100,000

As the number of players in the skin care space increases in India, manufacturers have
to work harder to add value and create differentiation to build long-term relations with
50,000
consumers. As most consumers are not fully aware of the available products or
knowledgeable about their skin concerns and solutions, manufacturers are ensuring
that their retail outlets have well-trained staff that can educate the clientele and offer
0
the most apt solutions for their skin concerns. Premium brands such as Shiseido and 2004 2018 2023
Clinique have been investing in train their sales staff and equipping them with the
required knowledge to address consumers’ concerns rather than just selling a product.
This personal and individual attention allows helps clients find the right solutions when
Sales Performance of Skin Care
they are not yet well aware of what various products can do, and interaction between
% Y-O-Y Retail Value RSP Growth 2004-2023
customers and sales staff helps builds a relationship with the clientele and thus forge a
bond. In addition, as men’s skin care draws attention from manufacturers, companies
are training male sales personnel to educate potential male consumers as they
consider making a product purchase. Most brands as well as beauty specialist retail
9.8% Forecast
25%
stores are employing male attendants to cater to this currently niche clientele. During
the forecast period, this trend towards building stronger relationships with clients is
expected to continue. 20%

Premiumisation and foreign investments continue in Ayurvedic skin

care 15%

The traditional Indian practice of Ayurveda continues to receive attention from

consumers that are seeking solutions for their skin care needs. This is mainly because 10%
the practice of Ayurveda involves using of natural ingredients to solve any health or
skin issues. This resulted in many new local players entering the skin care business in
the early 2000s such as Forest Essentials and Kama Ayurveda, which specialise in 5%
offering products based on Ayurvedic practices. These players offer Ayurvedic skin care
products in the premium category. As demand for Ayurvedic skin care products
continues to be positive, multinational players seeking to develop a stronger foothold 0%
2004 2018 2023
in the region are investing in such premium local brands. For example, in March 2019,
Puig acquired a stake in Kama Ayurveda for INR100 crore. Estée Lauder has been equally
active in the space; it acquired a stake in Forest Essentials in 2009, and followed up by
providing a second round of funding in 2014. During the forecast period, this trend is
projected to continue, as these local brands require strong financial and operational
Sales of Skin Care by Category
Retail Value RSP - INR million - Current - 2018 Growth Performance
backing to make them global brands.
Body Care
Sharing a philosophy that is environmentally friendly 13,624.2

Traditionally, skin care companies have carried a negative image for product testing on Facial Care
113,821.4
animals, products having chemicals, having production processes that are not
environmentally friendly, etc. However, as social and government organisations Hand Care
524.2
continue sharing their voices about saving the earth, demand for eco-friendly, vegan
and organic products is spreading quickly. Companies are stepping in to contribute to Skin Care Sets/Kits
-
the cause and create greater awareness amongst consumers. For example, The Body
0% 15% 25%
Shop, aiming to help control pollution created by plastic, recently launched a campaign
called “Bring Back Our Bottles”, which is encouraging consumers of its products to SKIN CARE 127,969.9 CURRENT % CAGR % CAGR
return empty bottles, which will then be recycled. YEAR % 2013-2018 2018-2023
GROWTH

COMPETITIVE LANDSCAPE

Hindustan Unilever retains its top spot in skin care

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In 2018, Hindustan Unilever retained its leadership position in skin care. The company Competitive Landscape
experienced healthy growth during the year across different product categories such as
facial, hand and body care. It achieved strong growth through the relaunch of its core
brand Fair & Lovely. It also saw its Lakme brand achieve revenue amounting to more Company Shares of Skin Care
than INR1,000 crores for the first time, which allowed the company to perform well. % Share (NBO) - Retail Value RSP - 2018
Hindustan Unilever also continued to host its Lakme Fashion Week, which attracts many
Hindustan Unilever Ltd 44.1%
consumers. Apart from this, its strong presence across different store-based and non-
stored based distribution channels has helped it to continue penetrating both urban L'Oréal India Pvt Ltd 8.3%
and rural areas. Himalaya Drug Co, The 7.1%
Johnson & Johnson (India... 3.8%
New local players continue intensifying competition
Emami Ltd 3.4%
The Indian beauty industry continues to witness the launch of new domestic players,
which have been sparse in the country, even though the competitive landscape is Nivea India Pvt Ltd 2.9%
largely dominated by foreign multinational players such as Unilever and L’Oréal. Oriflame India Pvt Ltd 2.6%
Domestic brands such as Forest Essentials have performed increasingly well in previous
Amway India Enterprises ... 2.6%
years. Taking a cue from such players, many domestic players are launching their
products. For example, Enn’s Closet targets the premium skin care category by offering Procter & Gamble Home Pr... 2.4%
products derived from natural ingredients and restricts the usage of chemicals, fillers, Piramal Enterprises Ltd 1.5%
parabens or additives. Brands such as Phy are targeting men and offering products such
as sulphate-free face wash for acne-prone skin. Other local brands such as Organic Riot, Quest Retail Pvt Ltd 1.4%
Arata and Nuskay also are aiming to create further value for consumers in skin care. Lotus Herbals Ltd 1.1%
Zydus Wellness Ltd 1.0%
Elca Cosmetics Pvt Ltd 0.6%
Hindustan Lever Network 0.6%
Avon Beauty Products Ind... 0.6%
CavinKare Pvt Ltd 0.5%
Modicare Ltd 0.5%
Three-N-Products Pvt Ltd 0.5%
Others 14.6%

Brand Shares of Skin Care

% Share (LBN) - Retail Value RSP - 2018

Fair & Lovely 31.4%

Himalaya Herbals 7.1%
Garnier Skin Naturals 6.7%
Pond's 6.3%
Clean & Clear 3.1%
Emami Fair & Handsome 2.9%
Olay 2.4%
Lakmé 2.1%
Vaseline Intensive Care 2.0%
Lactocalamine 1.5%
Fair & Lovely Face Wash 1.4%
The Body Shop 1.4%
Lotus Herbals 1.1%
Ever Yuth 1.0%
Nivea 1.0%
Artistry 0.9%
Attitude 0.9%
Neutrogena 0.8%
G&H 0.7%
Others 25.3%

Increasing share Decreasing share No change

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