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Sales Prospects
The growing Indian cosmetics market offers promising opportunities
for international brands. The growth rate in the cosmetics market
reflects an increasing demand for beauty care products in India. The
most promising segments for U.S. companies to pursue are perfumes
and fragrances, and specialized/professional skin care and hair care
products. The fastest growing market is however color cosmetics,
which account for US$ 60 million of the total market.
The rural market in India for cosmetics and toiletries remains is
largely untapped. Major domestic players have also not been able to
penetrate this market. The urban market itself for specialized
cosmetic products remains to be fully exploited. The Indian
skin-care market is not yet fully tapped and offers promising
prospects as a growth area. Penetration of color cosmetics is lower
than the penetration prospects of the skin-care segment.
To promote the growth of their products, a dominant player like
Lakme have embarked upon a business plan to establish their
exclusive franchised beauty salons across major metros in the
country.
Imported cosmetics have had a major impact on the Indian market.
Foreign products have enhanced growth of the Indian market by
attracting aspirational consumers and increasing acceptance of color
cosmetics, previously perceived by many as harmful to skin. Indians
generally perceive foreign brands as being of superior quality.
Other key issues regarding sales prospects are product variety and
retailing strategies as well. There is a marked shift among
consumers from functional common-fits-all products to more
specialized formulations. This is one of the reasons why an
increasing number of cosmetic companies are dealing with consumers
directly through special exclusive counters in major departmental
stores and malls featuring their own beauty consultants.
The Indian cosmetics and toiletries market will continue to grow due
to the increasing incomes and purchasing power of the growing Indian
middle-class and urban consumers. Demand from the rural areas and
smaller towns are also fast increasing.
Industry sources expect significant growth in both the mass and
premium segments of the Indian cosmetics market. The market base
however in the premium segment is very small. It is a niche market
and the scope for rising volumes is slower. The growth in the
premium segment is usually seen to be because of people upgrading
from the mass to the premium rather than an increase in consumption
as such by itself. Prospects for increasing volumes on the other
hand is higher in the mass segment mainly because the market base
for this segment is higher, and because of the lower pricing, it is
easier to persuade end-users to try out the products.
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