Praveen Paramasivam, Reuters
August 21, 2025

Summary

India's luxury beauty market to quintuple by 2035
Domestic brands account for less than a tenth of sales
Global brands modify offerings for India

India’s luxury beauty market is expected to quintuple to $4 billion by 2035 from $800 million in 2023, driven by its young, affluent, social-media savvy shoppers with rising disposable incomes, consulting firm Kearney and luxury beauty distributor LUXASIA said in a report.

Luxury beauty makes up just 4% of the $21-billion beauty and personal care market, compared with 8% to 24% across top Southeast Asian countries and 25% to 48% in developed markets including China and the United States.

That means there is plenty of room for growth.

“India is the last bastion of growth for premium beauty,” said Sameer Jindal, managing director for investment bank Houlihan Lokey’s corporate finance business in India.

“The Indian consumer is willing to experiment and try out new things.”

U.S. beauty giant Estee Lauder home to the brands Clinique and MAC, expects a strong runway for expansion and long-term growth in India, even as it grapples with soft sales in the Americas and Asia-Pacific.

“India today, within the Estee Lauder network, is looked at as one of the priority emerging markets,” said country general manager Rohan Vaziralli, highlighting plans to initially target 60 million women in the nation of more than 1.4 billion.

Homemaker R. Priyanka, based in the southern city of Chennai, said she was thrilled to have better access to Estee Lauder’s Jo Malone London fragrance in India, as a benefit of the companies’ efforts.

“It is easier than asking someone (abroad) to get it for you every time,” she added.

While global beauty brands might have to modify some of their products for India, which bakes in sultry temperatures in summer and oppressive humidity at other times, they face little competition from homegrown brands.

Kearney and LUXASIA identified only Forest Essentials and Kama Ayurveda as their major rivals, underscoring how domestic brands make up less than a tenth of luxury beauty sales.

In the more established markets of China, Japan and South Korea by comparison, domestic brands account for a 40% share.

“There is, of course, a premium perception gap between globally established brands and Indian brands,” said Devangshu Dutta, founder of retail consultancy Third Eyesight.

Global beauty giants’ huge marketing budgets also give them an edge over domestic brands, other industry watchers said.

WOOING INDIAN SHOPPERS

Estee Lauder is studying online sales patterns to identify the smaller cities to target, such as Siliguri in West Bengal state, partnering with designers such as Sabyasachi Mukherjee, and launching products such as kohl, an eyeliner Indians favour.

It has also invested in Forest Essentials, a brand with herbal ingredients, and in a programme offering funding to domestic beauty start-ups.

This year France’s L’Oreal said it was investing more in India and tapping into the “elevated beauty desires” of the nation’s young, digitally savvy, empowered women shoppers to drive growth. It declined further comment.

South Korea’s Amorepacific, known for brands such as Innisfree and Etude, is trying to leverage the Korean beauty craze in India with products geared to the market.

These include items for the popular “cleanser, serum, moisturiser, and sunscreen” beauty regimen, the country head, Paul Lee, said.

Japan’s Shiseido, with a history of more than 150 years, brought its NARS brand to Indian beauty retailer Nykaa’s website this year, and plans to step up growth of its brands in the subcontinent.

Global brands are very excited about India, where consumers are splurging more to stay on top of trends such as “cherry makeup”, Nykaa co-founder Adwaita Nayar said, referring to a look featuring flushed cheeks, glossy lips, and soft pink eyes.

Amazon, which has also been seeing a big boom in beauty demand in India, aims to identify emerging global trends and bring in more brands, said Siddharth Bhagat, director of beauty and fashion at the e-commerce company in India.

Retailer Shoppers Stop, which also pioneers foreign labels, plans to open 15 to 20 beauty stores in each of the next three years to boost its revenue from the segment to a quarter from less than a fifth now, its beauty business CEO Biju Kassim said.

Reporting by Praveen Paramasivam in Chennai; Editing by Dhanya Skariachan and Clarence Fernandez

(Published on Reuters)

Sagar Malviya, Economic Times
Mumbai, 20 March 2025

Established beauty product makers such as Forest Essentials, Colorbar, Kama Ayurveda, Body Shop, VLCC Personal Care and Lotus Herbals saw a slowdown in sales growth in FY24, according to the latest Registrar of Companies filings. Consumers favoured new-age rivals such as Minimalist and Pilgrim, specialised derma brands, as well as global labels Shiseido, Innisfree and Eucerin.

Sales growth of established brands mostly in the natural skincare segment, more than halved to single digits during the previous financial year amid a broader economic slump.

In contrast, companies such as L’Oreal, Nykaa and Sephora continued to grow at 12-34% on a significantly bigger base, even as they lost pace.

Direct-to-consumer brand Pilgrim more than doubled its sales, Minimalist’s revenue increased 80% and Foxtale’s sales surged 500% on a lower base.

“With most consumers tightening their budget on discretionary spends in FY24, they seem to have opted for brands that give instant benefits compared to natural products, which take time to be effective,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.

Over the past few years, there has been a flurry of beauty product launches, which have depended on platforms such as Nykaa and Tira for sales.

In the past two years, Nykaa has launched more than 350 brands, or In the past two years, or nearly one new label every alternate day on average.

This includes international brands such as CeraVe, Uriage and Versed, as well as home-grown brands such as Foxtale and Hyphen.

Reliance Retail, which entered beauty retailing with Tira two years ago, now sells nearly 1,000 brands, including exclusive labels such as Akind, Augustinus Badee, Allies of Skin, Kundal and Patchology.

“10 years ago we were only competing against big guys,” Vincent Karney, global chief executive of Beiersdorf, maker of Eucerin, Nivea and La Prakrit, told ET last month. “Now we have those local brands, and we have to become a bit more agile.”

On Nykaa, Fenty Beauty by Rihanna is the highest-selling brand in lipcare while Eucerin has become its biggest premium dermo-cosmetic serum. South Korean beauty brands Axis-Y, Tirtir and Numbuzin grew over 60% in 2024, with sales of toners increasing 104%, serums 45%, moisturisers 52% and sunscreens 154% on the platform.

VLCC and Colorbar did not respond to ET queries, while Forest Essentials was not reachable.

In January, Mike Jatania, cofounder and executive chairman of The Body Shop and Aurea Group, told ET, “There would be continuation of new entrants. Inflation is still a global issue and we will see the pressure. Competitive environment will be a challenge… 70% of our stores are showing decent growth. We have closed some stores and opened a few also, that’s the nature of the business.”

Ingredients Matter

Warnery of Beiersdorf emphasised the need to stay focused on “big innovation, by being able to talk to GenZ, (a position) which might be filled in by those local brands coming with basic ingredients.”

The likes of Minimalist, Ordinary and Pilgrim disclose active ingredients at a granular level, specifying the exact percentage of acid used in the product to appeal to GenZ users (those born between 1997 and early 2010s), who are said to be far more conscious of what they use on their skin compared to millennials (those born during 1980s to mid-1990s) and Gen X (those born from about 1965 to 1980).

Shoppers Stop, which manages brands such as Estee Lauder, Shiseido, Bobbi Brown, Mac and Clinique in India, sees the overall beauty market driven by companies focusing on consumers across age groups, and not just younger ones. Both natural and dermatological products are expected to find takers.

“While most new age brands tap younger cohorts, their pocket size allows them to mostly buy affordable products and the more affluent consumers opt for established global brands that have proven themselves since decades,” said Biju Kassim, chief executive, beauty, at Shoppers Stop. “Beauty is still not a habit in India and with hundreds of brands being launched, the focus is to grow penetration. There is also a shift from care to cure, driven by derma-recommended products and brands disclosing active ingredients, but it is still a niche sub-segment.”

Dutta of Third Eyesight sees the current trend as temporary. “We expect growth of (established) companies to bounce back in the current fiscal, driven by a strong demand for beauty,” he said, pointing especially to online platforms. India’s beauty and personal care market is expected to reach $34 billion by 2028, up from $21 billion now, driven by an online surge and a growing preference for high quality, premium beauty products according to a report by Nykaa and consulting firm Redseer.

Nicolas Hieronimus, chief executive of cosmetics giant L’Oreal, last year said consumers in India are more demanding and are not just settling for very basic things like putting an ingredient in a product such as salicylic acid or collagen. “That’s where L’Oreal has the best cards to play, and that’s where we really thrive,” he had told ET.

Beiersdorf, Unilever, L’Oreal and Shiseido, among the world’s largest cosmetics companies, have all identified India as a key growth driver, citing the burgeoning population and growing affinity for beauty products.

(Published in Economic Times)

Writankar Mukherjee, Economic Times
Kolkata, 28 July 2024

Top retail chains such as Reliance Retail, Shoppers Stop and Spencer’s Retail are facing a prolonged slowdown in consumption, pushing them to exit unprofitable markets, raise debt and control costs.

India’s largest retailer Reliance Retail shuttered 249 stores in the three months ended June. The company is also going slow on expansion, opening 331 new stores in the quarter compared to 470-800 stores opened every quarter in FY22, FY23 and FY24. The closures mean the retail business of Reliance Industries made 82 net new store additions last quarter–the lowest in 15 quarters.

Spencer’s Retail has decided to completely exit North and South India markets by closing 49 stores in the National Capital Region (NCR), Andhra Pradesh and Telangana. The step will erase Rs 490 crore of annual revenue, but the company is hopeful it will improve profitability.

Shoppers Stop chief executive officer Kavindra Mishra told investors last week that it may have to defer a few store openings this fiscal due to regulatory and other issues. The company will also borrow Rs 100 crore for expansion with demand remaining soft.

Meanwhile, V-Mart Retail has closed 22 stores in the first six months of 2024, as per its latest investor presentation.

“Pruning underperforming locations is a natural reaction during times of demand stress,” said Devangshu Dutta, CEO of retail sector consulting firm Third Eyesight.

Pure Economics

“Demand forecasting can never be perfect due to a lag between demand assessment and supply. Retailers now try to do away with underperforming stores at the bottom of the pile quickly. Earlier there were prestige issues in shutting down stores, but now it’s acceptable industry practice and pure economics,” said Third Eyesight’s Dutta.

Analysts say most retailers expanded rapidly after the pandemic, banking on pent-up demand and revenge shopping at the time. With demand turning sluggish, the industry is now being forced to take various steps to sustain operations. At Reliance Retail, net profit rose by a modest 4.6% from a year earlier in the June quarter to Rs 2,549 crore while revenue grew 6.6% to Rs 66,260 crore. It was the slowest pace of revenue growth and came after a 9.8% increase in Q4FY24. Net profit and revenue from operations fell sequentially in the June quarter.

Spencer’s Retail CEO Anuj Singh told analysts on Thursday the 49 stores it is closing make up nearly 22% of revenue, but also Rs 56 crore of losses at the regional Ebitda level in North and South India. “They were a drag on the balance sheet. We will now focus on Uttar Pradesh and the East where there is a sizable consumption opportunity with a 250 million population,” he added.

Singh said the store rationalisation exercise and about 35% headcount reduction at corporate offices will reduce overheads from 8% operating cost to 6.3% of total sales. “We now expect to achieve Ebitda breakeven by March 2025 which will give us the option to raise capital,” he said.

Mishra at Shoppers Stop said demand remained subdued last quarter due to fewer wedding dates, long election season with polling dates on weekend, heatwaves, and high level of cumulative inflation. All these factors combined hit growth and volume recovery, except in value fashion and beauty.

More stores shut than opened

In fact, the sustained demand slowdown saw chains like Pantaloons, Spencer’s Retail and Nature’s Basket close more stores than they opened last fiscal. Retailers like V-Mart Retail, W, Aurelia and Titan Eye+ had a higher rate of store closures than openings in the March quarter.

(Published in Economic Times)

Sagar Malviya, Economic Times
Mumbai, 15 April 2024

Spanish fashion company Inditex said it will launch youth clothing brand Bershka and Zara Home in India this year.

“Bershka will open its first store in Mumbai Palladium, and Zara Home will open in Bangalore,” it said in its latest annual report.

Inditex had launched fast fashion brand Zara in 2010 and premium clothing brand Massimo Dutti eight years ago. Its new offering, Bershka, will pitch it directly against Reliance Retail’s Yousta, which too targets the younger consumer segment.

Being the world’s second most-populous country, India is an attractive market for apparel brands, especially with youngsters increasingly embracing Western-style clothing. Fast fashion brands such as Zara and H&M became runaway successes soon after they entered the country.

Experts said Bershka’s target consumer profile is mostly teens to mid-20s, slightly younger than that of Zara, which is pitched at 20-40-year-old fashion-driven customers.

“The product assortment is different, with a higher share of knits, fewer dresses and more casual overall compared to Zara, keeping in line with the lifestyles of the customer group. So in that sense it wouldn’t cannibalise Zara in any serious way, though some of the younger set among Zara buyers could migrate some of their purchases to Bershka,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “The biggest question is, can they hit the price points that young Indian fashion consumers want as with domestic brands such as Zudio, Yousta and others, or will consumers overlook higher prices for the style mix and a European brand pull in significant numbers to make the brand viable.”

According to a recent report by Motilal Oswal, the ₹2.5 lakh crore value fashion segment accounts for 57% of the total apparel market and is one of the largest and fastest-growing segments. A substantial untapped opportunity beyond the metros and tier-1 cities, driven by better demographics, higher incomes and greater customer aspiration, has compelled several big players to enter a market that was previously dominated by regional and local operators.

Since its inception in 2016-17, Zudio has seen considerable expansion and reached nearly 400 standalone stores, outpacing most apparel brands primarily due to its competitively priced products with an average selling price of ₹300. Following the success of Zudio, a unit of the Tata Group’s Trent, the segment has seen the entry of national retailers in the affordable youth clothing segment such as Yousta by Reliance Retail, Style-Up by Aditya Birla Fashion and Retail and Shoppers Stop’s InTune.

(Published in Economic Times)

Written By Mukherjee, ET Bureau

Top listed retail chains such as Aditya Birla Fashion & Retail, Avenue Supermarts and Tata-owned Trent are going to lead store additions through the next financial year, as they double down on expansion after the pandemic, company executives and analysts said.

As per a recent report by ICICI Securities, 16.7 million square feet of retail space would be added by eight large, listed retail chains between FY21 and FY24 as compared to 8 million square feet added in the preceding four years of FY18-21. These companies also include Titan, Bata, V-Mart, TCNS and Shoppers Stop.

The buoyed sentiment comes after the recovery of retailers to more than their pre-Covid levels in the last two quarters, and is also driven by pentup demand, strong sales despite increasing prices and expansion into small-tier towns, the report said. There has been an expansion of the market which is happening along with a consolidation, said Devangshu Dutta, chief executive of consulting firm Third Eyesight. “Not all locations might turn out to be viable, but in every expansion cycle there are boom and bust. And the bust is not as big as the boom. Right now, we are in the expansion cycle,” he said.

Aditya Birla Fashion & Retail managing director Ashish Dikshit told analysts recently that the company would expand rapidly since plans were held up in the last two years due to the pandemic, with faster growth for fashion business, ethnic wear and inner wear. The company, which had raised ₹2,195 crore from GIC Singapore, intends to invest ₹600-800 crore for expansion in the next couple of years.

“…we continued to believe both in the long-term growth potential of the market and intrinsic strength of our brands and we feel now the time is to accelerate to catch up on what we have not done over the last 12 to 18 months and I would go back almost till the beginning of the Covid period from 18 to 24 months where some of our growth initiatives have held back,” said Dikshit.

As per the ICICI report, Avenue Supermarts would add 7.5 million sq ft during FY21-24 for the DMart stores as compared to 3.9 million sq ft added in FY18-21. Aditya Birla Fashion & Retail would add 3.1 million sq ft as compared to 1.2 million sq ft in preceding four years, while, among others, Trent would add 2.7 million sq ft (vs 1.5 million sq ft), Shoppers Stop would add 0.8 million sq ft (0.2 million sq ft) and Bata would add 0.7 million sq ft (0.2 million sq ft).

India’s largest retailer, Reliance Retail, too has accelerated expansion plans including taking its stores into new geographies, Gaurav Jain, head of strategy and business development told analysts recently.

Source: economictimes