The Indian cosmetic industry has witnessed rapid growth in the last couple of years, growing at a CAGR of around 7.5% between 2006 and 2008. With improving purchasing power and increasing fashion consciousness, the industry is expected to maintain the growth momentum (with marginal slowdown due to the global economic downturn) during the forecast period (2009-2012). It is projected to grow at a CAGR of around 7% during the forecast period, says a new report published by market research firm RNCOS .
The research also found that the Indian consumers are showing a highly receptive approach towards some entirely new segments such as Spa, Salon and Herbal cosmetics, which have emerged as some of the new trends in the Indian cosmetic market.
“The growth will primarily be driven by growing desire of looking young and beautiful among Indian consumers. These segments will help the entire cosmetic market to experience an upward growth trend in coming years,” comments RNCOS
The role of the media
Both electronic as well as print media are playing an important role in spreading awareness about cosmetic products and developing fashion consciousness among the Indian consumers. With the introduction of satellite television and a number of television channels as well as the Internet, the Indian consumers are constantly being updated about new cosmetic products, translating into the desire to purchase them. Additionally, the flourishing Indian film industry is fuelling growth in the industry by making Indians to realize the importance of having good looks and appearances.
Potential for growth
Despite the massive surge in the popularity of cosmetic products, the report finds that the average consumer spending on cosmetic products in India is much lesser than any other part of the world. This implies that the Indian cosmetic industry has an even greater potential for growth in future than present.
However, manufacturers should not forget that the Indian domestic market is price sensitive and they need to work out innovative strategies to establish a foothold here, the report added.
At present, most of cosmetics manufacturers in India cater to the domestic market but they are gradually establishing their footholds in overseas markets. In recent years, the Indian cosmetic manufacturers have received orders from overseas markets; for example - Indian herbal cosmetic products have a tremendous demand in the international market.