Skincare: The Growing Market
Skincare in India is a getting very interesting and such increased action in the space will help boost sentiment among aspiring entrepreneurs and investors looking to venture into the beauty arena.
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This is a very exciting time for every industry but especially for beauty sector. With the digital revolution and the emergence of e-commerce, home delivery and digital marketing, various direct-to-consumer indie beauty brands have made a sudden influx.
Economies of scale are easier to reach, barriers to market have been reduced and data is supporting highly efficient advertising spends. Within the beauty industry Skin Care is a hot domain right now. Up until now skin care was limited to facial moisturizers which Mintel reports is being used by almost 21 per cent of the Indian population and face washes at a 31 per cent usage share. But that is quickly changing.
With popular social media platforms headed by Instagram, the awareness of advanced beauty products has exploded, and startups are capturing and leading this awareness in India. These advanced products are high priced and deliver increased value in terms of efficacy, safety and consumer experience. But the Indian businesses and startups are yet to venture into the premium space.
The Global skin care industry is estimated to reach 18.5 Billion US Dollars by 2021 and is growing at one of the fastest CAGRs of 6 per cent, within which the Premium market in India is growing at an impressive 15 per cent CAGR, the highest ever. An upper shift in the socio-economic status of the Indian population leading to more spending money, aspirational demand, consumerism perpetuated by increased availability of media content, and increased wallet output are some factors leading to this. But the biggest has been increased awareness and content consumption through social channels be it digital media, celebrities influence or doctors.
One of the reasons is likely the sticky revenue potential of skin care unlike other categories like hair and salon. Skin care is very personal to a consumer, a successful product can gain loyalty which is difficult to displace and drives sustainable growth - a key metric of attractive businesses in the increasingly trend and fad driven beauty world. Another reason is that consumers are seeking more performance out of their products and are quickly getting disillusioned by brands making esoteric claims that don’t address real problems.
Herbal and Ayurveda based products were a trend until some time back but has now been overshadowed by this demand for performance. Safe is the new truth and performance the new aspiration, natural or not. This is good for the market as it allows companies to focus on the core issues of safety while delivering quality and efficacy.
Competent R&D capabilities becomes key in the space and businesses with this ability will innovate and disrupt the market. All in all, skin care in India is a getting very interesting and such increased action in the space will help boost sentiment among aspiring entrepreneurs and investors looking to venture into the beauty arena.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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