India’s Per Capita Cosmetic Consumption 50 Times Lesser Than Hongkong: ASSOCHAM Page 1 of 2

India’s per capita cosmetic and toiletries consumption is 50 times lesser than that of HongKong, 18 of
Japan, 15 of Taiwan, 12 of Philippines and Malaysia and half of China, despite high penetration levels
for cosmetic products because of its population and size based, according to The Associated Chambers
of Commerce and Industry of India (ASSOCHAM).

However, the optimistic assessment of domestic cosmetic and toiletries industry show that with
increased awakening which is growing even in rural India, its size will grow in next 2-3 years to around
US$ 1400 million from current level of US$ 950 million. By then, India’s per capita consumption of
cosmetic and toiletries products could be on par with that of China which currently is US$ 1.5, says
ASSOCHAM analysis.

The above findings are arrived at a Paper on `Cosmetics : A Comparative Study between India and
Asian countries’ which say that domestic cosmetics and toiletries industry has been growing @15-20%
in the last few years, however, has yet to take its per capita cosmetics and toiletries consumption to a
comparative levels with Asian countries.

Releasing the findings, the ASSOCHAM President, Mr. Venugopal N. Dhoot said that of over 1 billion
population, India’s per capita consumption for cosmetics and toiletries for well-known branded
products stands at US$ 0.68 as against US$ 40 in HongKong, US$ 9 of Philippines, US$ 10 in Malaysia
and Taiwan, 12 US$ of Japan and US$ 1.5 of China. HongKong has the highest per capita consumption
for cosmetics and toiletries products because it is the launching pad for such products for most of Asian
countries.

Citing the reasons for such a low per capita consumption for branded cosmetics and toiletries products,
Mr. Dhoot said that India’s 20 million uses well-known branded products made by Unilever,
Procter & Gamble, Godrej, Dabur etc.

Remaining 80 million use low-cost cosmetics and toiletries products. A case for example is that most of
Indians use Boroline to remove the wrinkles and skin bruises which cost only Rs. 12 a piece as against
Garnier and Pond’s brand of wrinkle crème, cost their customers over Rs.400.

According to ASSOCHAM, the skin care segment, the market size is just US$ 200 million as against
market size for hair market is estimated around US$ 325 million. Interestingly, women and men
between the age-group of 23 to 50, majority of which are in the female segment are the major target
audience for branded cosmetics and toiletries products as 50% of MNCs sale is to this segment. Bath
and shower products market size in India is estimated at US$ 425 million.

The reason for low penetration levels of international cosmetic brands in India is because of price
differential as a result of which foreign brands currently constitutes only 20% of the market. The
toiletries market in India is well developed and dominated by multinational companies and a few large
Indian companies. A few major players, high entry barriers, fairly high rate of new product launches
and high advertisement spendings characterize this segment.

Cost of importing products are much higher than producing it in the country. India allows entry of
imported cosmetics without any restrictions but the average import tariffs on cosmetics products is
currently very high at about 40%. This makes imported products very expensive for most consumers.

The Indian cosmetic market, which has been traditionally a stronghold of a few major Indian players
like Lakme and Ponds has seen a lot of foreign entrants to the market within the last decade. India is
a very price sensitive market and the cosmetics and personal care product companies, especially the
new entrants have had to work out new innovative strategies to suit Indian preferences and budgets to
establish a hold on the market and establish a niche market for themselves. Given the price-sensitivity
of the Indian consumer who do not normally prefer to fork out a large sum at one time, many cosmetic
and toiletries companies launched their products in smaller pack sizes to make them more affordable.

http://www.assocham.org/prels/printnews.php?id=1346 9/10/2010
India’s Per Capita Cosmetic Consumption 50 Times Lesser Than Hongkong: ASSOCHAM Page 2 of 2

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http://www.assocham.org/prels/printnews.php?id=1346 9/10/2010