With new trends India’s beauty & personal care market is all glammed up for festivities

This festive season, India’s beauty and personal care market is expecting a big turnaround, with a lot of emphasis being placed on customised personal care products and lucrative offers for its customers

   
beauty personal care industry in festive season

We have reached that time of the year again when every Indian is busy purchasing various items to celebrate the festive season, be it apparel, fashion, food and beverages or automobiles and electrical appliances. The entire country is excited about this festive season, which has come after a two year long hiatus due to the pandemic.

When we think of the festivities, we think of fashion and beauty. With the festive season upon us, the beauty and skincare segment has been witnessing increased demand as people are buying a plethora of new products. Due to this, the beauty and personal care brands are gearing up to make the most out of this season by offering up a variety of products and lucrative discounts, be it offline or online.

Due to this surge in demand, the markets are flooded with consumers. The footfall has become better now that there are no restrictions on physical shopping. However, the stiff competition for customers between the online and offline brands has become more prominent than ever.

To understand the stir among the beauty brands this festive season, and the demands and challenges that they are preparing themselves for, SME Futures interacted with a few beauty brands that are curating clean and ayurvedic beauty products.  

The brand’s expectations  

In recent years, India’s beauty and personal care market has grown quite significantly. According to market estimates, it is going to be US$ 24.53 billion in 2022. And it is expected to reach US$ 33.33 billion by 2027, growing at a CAGR of 6.32 per cent. 

beauty personal care industry market

Keeping this in mind, the brands are extremely enthusiastic this festive season.

To lure customers, they have various strategies in place—such as advertising through multiple channels, discounts, vouchers or freebies etc. They are expecting to do roaring business this time around. When we asked them about their expectations from this festive season, there were three words that were mentioned unanimously—growth, relations and recognition.  

“We expect to grow 3-4x from the previous year during these two to three months in terms of the top line,” says Prateek Ruhail, Co-CEO and Founder of Vanity Wagon, a personal care brand.

He says that besides capital gains, his company is also focused on deepening relationships with their partner brands and with their loyal consumers by rewarding them. “We expect to strengthen our existing relationships and build new ones,” he avers. 

In terms of numbers, he says, “The festive period of the next three months should enable us to reach an annual percentage rate of 24 crores and upwards by March 2023, if not enable us to fast forward our target number. Looking at the last three months, we expect this quarter to be at least up by a 100 per cent.”  

Another player in this arena, The Tribe Concepts is confident about its sales this year. Amritha Varshini Gaddam, Founder & CEO of the brand says, “We are confident of employing our budget to spend wisely on creative marketing strategies that will ensure significant growth and sales for us in the festive season.”   

Digitalisation and e-commerce have been a great advantage for the brands that do not have a higher minimum spend (the minimum amount that needs to be spent to avail of offers). This season, start-ups have decreased their higher minimum spend to retain their customers.

Harshvardhan Modi, Founder & CEO of INVEDA expects recognition and reach from this festive season. He believes that skincare enthusiasts will love the luxury products that they have curated at pocket-friendly prices. “We have revamped our gifting collection and ranges; we’ve seen our luxury ranges and best-sellers picking up, and people love to gift them,” he tells us.  

Opportunities come with challenges

Stakeholders have launched products based on market trends. When asked about their preparations and the challenges that they might have to face, they have a lot to share with us.

“The many options and offers that are proliferating in the online and offline markets are making it difficult for the other brands in the same niche to keep up,” says Modi of INVEDA.

“Deep discounting has been introduced by many brands, where they are providing various offers online to compete with other brands. This technique is helping these brands to gain profits, but it can be challenging for the other brands to compete with them and stay in the market,” he adds.  

Every festive season, brands focus on curating product bundles, hampers, and gifting catalogues, with marketing trends becoming increasingly expensive and competitive as all digital entities target overlapping audiences.

Beyond the basics, the festive season is an ideal time for new launches and initiatives, including capitalising on the learnings of the entire year. Ruhail of Vanity Wagon feels that even after physical interaction becoming normal after two years of the pandemic, the digital space still holds the attention of the people. This fact has made this festive season one of the busiest and most lucrative times for the D2C brands, enabling them to scale and grow.  

“We have built our data and content and are preparing to capitalise on the spending spree during this season to bring in new users and enable them to enjoy the experience of being with us,” he responds when asked about their challenges and preparations.  

Highlighting the online-offline clash, The Tribe Concept’s Gaddam mentions that there has been an increase in the number of online brands, which has only intensified the competition. “Thus, there has always been a need for better advertising and marketing strategies, and it looks like we will finally get to see some interesting creative campaigns hit the floor,” she says.

What do the new age consumers want?  

With so many brands out there in the market, the competition is really stiff. But the consumers of today are smart. Due to the changing consumer behaviour, the choices on offer have become even more diverse. They want different things.

“I don’t want beauty products to hide my scars, I would rather buy something that will help me to get rid of them and enhance my beauty from the inside at the same time,” says Vaishali Singh, a graduate, who is always excited about festive looks and attire.

When we ask her about her brand choices, she says “In my opinion, one should go for the most trusted and clean beauty brands, when it comes to buying beauty and skincare products.” 

Due to consumers like her, it has become clear that in this market, the variety of the products and offers being made available depends heavily on the prevailing trends during a particular season. And these trends change every festive season, which decides the flow of the market. Here are a few of the trends of this festive season:

Ayurveda with science

Over time, the demand for organic and vegan products has risen exponentially. 

“People have begun to see the combination of Ayurveda and the latest skincare science as something that can solve their skin problems in an amazing and effective manner. So, we’re planning to give our customers colour cosmetics that are enriched with natural ingredients for the best experience that they can get,” Modi asserts.  

Experiments with personalisation

Consumers nowadays are more interested in experimenting with and personalising their chosen products from their preferred brands. A lot of new brands are asking their customers about their unique personal concerns and problems in order to curate a product that has been personalised specifically for them.  

Talking about consumer trends, Ruhail says, “Amongst categories, we are seeing a surge in makeup and skincare this season which is in line with our expectations. A pleasing change has also been observed in the pick-up of haircare as a category.”  

consumer trends in beauty segment

Reasons for the excitement  

After spending two years in constant fear due to the pandemic, this is the first festive season when we have the freedom to completely indulge ourselves. Weddings and festivals are being celebrated at full tilt. “People will surely love to meet their near and dear ones, pamper them, spend time with them and go all out on having a great time with them,” says Gaddam.  

Festive activities like Diwali and Dhanteras shopping, Durga Pooja pandal hopping, elegant Karwa Chauth soirees and many such cultural celebrations across the country are creating a lot of excitement amongst the consumers. Gaddam adds, “People will want to spend on hosting events, on dressing up well and on treating themselves to a good festive season.” 

Being ranked fourth globally for generating the highest revenue in 2021, India’s beauty and personal care industry has had quite an impact on the other related markets as well.  

Beauty attracts business

The retail segment is hoping for a big bash this year.

According to the Retailers Association of India, the bumper sales will propel the online retail gross merchandise value to $68 billion in 2022, up 30 per cent from 2021. Meanwhile, another survey says that 83 per cent of consumers are willing to shop this festive season, with a preference for fashion and electronics.

Keeping this in view, the beauty and personal care segment, the F&B segment, and the accessories segment are going to be the usual earning segments when it comes to the increased consumer spending this season.

The organic or ayurvedic skincare industry, which is a part of the personal care segment, will undoubtedly see a surge in demand, says Gaddam. “I know this because people are also very interested in minimalism and sustainability,” she points out.

The Indian salon segment is another arena that is directly related to the beauty industry. Salons are completely taken over by hordes of customers during the festive season, particularly on Karwa Chauth. This industry is expected to grow by 20 per cent per year. A quarter of this industry is made up of 5,000 franchises worth $1 billion, with the rest being made up of independent stores and small to mid-sized chains.

The festive spirit is in the air and the Indian beauty and personal care market is expecting a massive turnover this year, especially due to the pandemic no longer being around to throw a spanner in the works. The industry stakeholders are optimistic and confident, as there is clearly a high level of consumer demand. They fervently believe that the losses that they had to sustain during the pandemic will be entirely offset by the business that they will do during this festive season.