It’s got potential—make that a lot of potential. India has nearly 1.3 billion people and its $1.9 trillion economy is the 10th largest in the world. So it’s no surprise that the country was the topic of a symposium sponsored by the New York Chapter of the Society of Cosmetic Chemists. The event was held prior to the annual Suppliers’ Day exhibition and marked the third emerging market symposium that the NYSCC has developed; previous events looked at China and Brazil. Co-chairs of the event were Steve Herman, president, Diffusion LLC and Kamesh Yerramilli, global consumer liquids SME and Fellow, Johnson & Johnson.

“There is little understanding of this market of 1.3 billion people,” explained Yerramilli. “We thought it was good time to bring in the experts from India.”

And experts they are. Leading off was Geera Ramakrishnan, a founding director of the Galaxy Group of companies, who noted that despite its 5,000 year-old history, India is still considered an emerging market—and a complex one as well, with 300 languages and 4000 dialects and a wide array of Gods, beliefs and lifestyles. It makes India a marketing paradise, according to Ramakrishnan. He pegged the global personal care industry at $470 billion, with India accounting for $10 billion in sales.

Ramakrishnan told attendees that the global personal care ingredient market is worth $23 billion, with India accounting for $520 million in sales—that means there’s plenty of room for growth, especially when one considers that India accounts for 17% of the global population. In fact, he predicted that India’s personal care ingredient sales will top $1 billion by 2026.

“India is a fascinating place in terms of opportunities,” he added, noting that GDP is growing 8% annually and the demographics skew toward young people, with 50% of the population less than 35 and the median age is 29, compared to 37 in China and 48 in Japan.

“Demographics, democracy and demand will drive growth,” Ramakrishnan predicted, adding that the premium beauty sector will top $1 billion in sales by 2020. And while the overall personal care sector has a compound annual growth rate of 6.6%, skin care is growing at a 13% CAGR. Driving sales now and in the future are rising per capita incomes, increasing discretionary spending, growing rural area and urbanization and the expansion of modern trade and digital media.

Specific product categories in India that offer the most potential to marketers and suppliers alike include innovative skin care products that deliver on their promises and hair care products that strengthen and condition hair. Ramakrishnan noted, however, that 65% of shampoos are sold in sachets in the country. Evolving and growing categories include hand sanitizers, deodorants and color cosmetics, which grew 26% last year, according to the speaker. Future opportunities include hair colorants, next-generation hair styling products and oral care products that offer gum protection.

Plenty of Targets
Yes, the market is huge, but should consumer product companies target affluent or low-income populations? What about those living in cities or consumers in rural areas? Satish Goel, Unilever’s personal care R&D director for India and South Asia, explained that there are several drivers of personal care growth in India.

First, companies should consider getting consumers to upgrade their personal care routines. For example, most Indians use talcum powder as their underarm deodorant. Companies that can successfully convert Indians to deodorant formulas can be very successful, according to Goel, who noted that Unilever sells 10 billion deodorant sachets a year in India.

Second, modern trade methods are having an impact on consumerism. Traditional mom-and-pop stores are giving way to mass market and now, online formats too, which, in turn, has encouraged more men to shop for personal care products.
“E-commerce is changing everything,” Goel asserted.

As more women enter the workforce and have disposable income, salons represent another growth area for the beauty industry, according to the speaker. Goel noted that more Indians are coloring their hair but he urged the audience to offer a wide range of black shades that are ammonia-free.

Unilever launched its Fair & Lovely fairness cream in India 40 years ago and the demand for fair skin continues to grow, even among men.

“There is no clear definition of the term ‘fair,’” Goel noted. “Consumers just know that they don’t want to look white.”

Fragrance is gaining a foothold in Indians’ personal care routines, especially those with strong top notes. Goel pointed out that Fogg body spray has grabbed a 20% share of the market since its debut.

Kumar Vedantam, VP-fragrance technology and applications at Givaudan, discussed fragrance delivery and the benefits in Indian consumer products.

“Today’s consumer wants instant gratification,” he reminded the audience. “Fragrance is the only ingredient in consumer products that can accomplish that.”

He noted that fragrance plays a key role in consumer decisions and reviewed some of the recent advances in water soluble and water-insoluble fragrance encapsulation technology.

The Regulatory Picture
Clearly, there are many opportunities in India, and many opportunities for missteps—especially in the area of product claims and regulations. Rashmikant Mohile of CLAIMS Pvt. Ltd., provided an overview of the Indian regulatory situation, noting that cosmetic regulations fall under the Drugs and Cosmetics Acts of 1940 of 1945, which defines cosmetics, provides labeling and packaging requirements for products, as well as procedures for the importation of products—all cosmetic products that are imported for sale in India must be registered.

Furthermore, cosmetic manufacturers must comply with regulations established by the Bureau of Indian Standards. 

In May 2014, India initiated an animal testing ban that prohibits the importation of products tested on animals. Most recently, India began affixing vegetarian or non-vegetarian logos to products. According to Mohile, these classifications add complexity to supply chain management and logistics. The speaker also reviewed the Biodiversity Act, a current ban on nail polish remover in bottle form and noted that there are no OTC classifications in India, but there are OTC products on the market.

Marketers in the Middle
India is expected to surpass China as the most populous country on Earth by 2025, noted Vivian Rudd, Mintel’s director of innovation and insight, beauty and personal care. By then, 25% of these 1.6 billion consumers will be less than 25 years of age and the middle class will boast 350 million members. She predicted that three major trends will impact their personal care purchasing decisions.

• Feeling good. Total wellness is a key concern.
• Back to our roots. Traditional and modern interpretation of Ayurveda is gaining an even greater following.
• Personalization. Products that provide a personal touch, backed by a digital presence, will grow in popularity.

While shampoos and conditioners, oral care and skin care products represent the top four personal care categories in India, body care and color cosmetics are the fastest-growing segment. Rudd predicted that facial skin care sales will top $1.2 billion this year, and noted that whitening products accounted for 35% of new product development in 2014. But not every consumer gets her beauty from a bottle; at 2,150, India has more plastic surgeons than any other country on earth.

The $406 million body care category is segmented into general body care products (71% of category sales), foot care (25%) and nail care (4%). Why the emphasis on feet? According to Rudd, many Indians wear open-toed shoes—even during Monsoon season.

She also noted that at just $50 million, sun care is a very small market, but with an estimated CAGR of 11% through 2018, according to Mintel’s research. The top three players are Unilever (37% share), and Lotus Herbal and L’Oréal, each with a 15% share.

Finally, while the rest of the world is just learning about the beauty of hair oils, it’s been an important category for years. In fact, last year, 69% of hair treatments launched in India were hair oils with coconut, the most popular variant.