Skincare and wellness are set to be key drivers in the post-pandemic marketplace, even as experts offer insights on why information trumps affluence and how the smaller cities are emerging as major markets.
If you prefer your perfume with a smattering of gold flakes, lipsticks packaged in leather or saffron-laced facial serums that promise to reverse your skin age, you belong to the a growing tribe of luxury beauty consumers in India, is a nascent market fuelled by potential.
“In the West, the lipstick is a woman’s first introduction to luxury, be it a Dior or a Saint Laurent. Before she buys clothes, she buys the lipstick,” says Vivek Sahni, co-founder and CEO at the skincare and wellness brand Kama Ayurveda. “The reason you feel good owning this lipstick is not necessarily because of its colour or feel but also because the luxury brand has spent a fortune on events, advertisements, and social media. You are buying into that universe. In India, though, we haven’t created that universe yet,” says Sahni.
Sahni is among the few currently fronting the beauty movement in India with premium products. Founded in 2002, Kama Ayurveda has become a haven for customers looking for concoctions based on the science of Ayurveda. Sahni counts the authenticity of formulation, quality of ingredient, process, packaging and the store experience as a package deal that pushes product price and propels a brand into the luxury category in the country.
Meanwhile, the legacy brand boom in India is dominated by two of the world’s largest beauty and personal care conglomerates, L’Oreal and the Estée Lauder companies. While the former operates high-end brands like Kiehl’s, Saint Laurent, Giorgio Armani, Ralph Lauren, Diesel, and Guy Laroche with selective distribution apart from its mass-market labels and salon chains, the latter retails makeup and skincare brands like Bobbi Brown, Estée Lauder, Smashbox, Glamglow, Aveda, Jo Malone, Clinique, Too Faced and Tom Ford. Nykaa, the eCommerce marketplace that has changed the game for India’s lifestyle and beauty sector, has also become a thriving stage for premium, bridge-to-luxury, and luxury beauty in India. Nykaa Luxe currently sells makeup and wellness products by the likes of French houses Givenchy, Dior, Guerlain, and the American Elizabeth Arden.
The most sought-after beauty and wellness brands in India include the American label Bath & Body Works, Sephora by the eponymous retailer, the Dubai label Huda Beauty and the local Forest Essentials. Lancôme, part of the L’Oréal Luxury Products division is the only brand in the category that finds a direct mention in the qualitative research for Atlas of Affluence (AOA) 2022.
The Market is Skin Deep
The luxury beauty market is brimming with tints, tonics, serums, and sunscreens —but in which direction is it really moving? Categorywise, while makeup, including lipsticks, eyeshadows and foundation seem to be at the top of the purchase graph—Nykaa lists the Bobbi Brown Vitamin Enriched Face Base and Charlotte Tilbury Airbrush Flawless Finish powder among the bestsellers from its Luxe category in 2021— skincare is the real cha-ching segment. Research reveals skincare to be a star performer during the pandemic alongside home decor, accessories and tech. The stress on self-care, at-home rituals and a renewed interest in skin health and appearance is driven by virtual engagements, has fuelled its growth. Kavita Khosa, the founder of the decade-old, Hong-Kong based Purearth sells luxury skincare and limited-edition makeup, says masks, serums and oils have been consumer favorites, along with a targeted interest in scalp care in the hair care category. Santosh Kumar, DGM Marketing at Kiehl’s India echoes the trend, adding that there has been a “paradigm shift” in interest in moving from makeup to skincare during the pandemic.
Euromonitor estimates that India’s beauty the market will grow to $20 billion by 2025, with the premium luxury segment scaling up by 15%. The colour cosmetics segment is expected to be worth around $1.1 billion but skincare will lead at $1.8 billion.
Another category that finds mentioned is beauty tools. The Nykaa Luxe list is headed by the Dyson Airwrap, a hair styling tool by the Singapore-headquartered luxury appliances brand, priced at ₹44,900, with barrels and attachments for multi-functional use. The the skincare-tech category also finds resonance with consumers gaining access to more niche tools like the Light Therapy Facial Masks by UK brand MZ Skin and Thermo Activated Smart Mask Devices by FOREO UFO, Sweden, all of them expanding the market’s product base.
While makeup, including lipsticks, eyeshadows and foundation seems to be at the top of the purchase graph, skincare is the real cha-ching churner.
Who Buys Beauty and How:
From Bareilly To Gangtok
The consumer for high-priced beauty and wellness products are no longer limited to 35 years and above, and it’s not only women who are engaging with concerns of skin health and appearance. “The the audience is getting younger and younger, and includes more number of men,” says Sahni, citing an example of a recent boost in the sales of acne-related products that traditionally cater to a younger audience. Urjasara, a newly launched hydration oil, is specifically focused on this group and on new entrants into the world of Ayurvedic beauty.
Even as the Gen Z consumer is busy investing in skincare, the trend is category-sensitive. However, the same may not apply to perfumes. “Younger audiences are more driven by the brand. So there is more of a chance that they would come in asking for a Tom Ford fragrance. There is also a bit of hesitation
in spending. Having said that, the age bar is being lowered from the earlier core target audience of 35 years and above,” says Surabhi Popli, Marketing Manager, SCENTIDO Niche Perfumery. With stores in Mumbai, Delhi, Hyderabad, Kolkata and an eCommerce website, the retailer offers niche perfume brands in India, with some of its most sought after brands including London perfumer Miller Harris, the British brand Roja Parfums, and the Italian label Carthusia.
Location-wise, the market has moved beyond the metros, fuelled by eCommerce purchases, marketplaces like Tata Cliq Luxury, Purplle and Amazon’s luxe beauty segment. “We see a distinct shift and spread in the market which is not concentrated anymore in the Tier 1 and Tier 2 cities where we already have stores. We witness purchases from small towns and cities like Lucknow, Indore and Dehradun,” says Simi Dewan, Country Head (DGM) at L’Occitane India, the country division for the luxury French brand in India through an omnichannel approach. Kama Ayurveda echoes the trend, with its plans for physical expansion in locations like Gwalior, Siliguri, Aurangabad, Bareilly and Gangtok.
While there is a clear mix of purchases done via eCommerce and stores, research suggests that shoppers prefer purchasing cosmetics or personal care products offline from brand outlets but are comfortable buying repeat products online.
As part of a recent chat at the Express e.adda, the virtual event by the news daily The Indian Express, Anchit Nayar, CEO, Beauty Ecommerce at Nykaa, spoke about the undertow market. “We don’t think the geography of the population of a city decides its affluence, affordability or purchasing power,” he said, adding that knowledge and awareness are driven by social media and access to smartphones have made the audience beyond Tier 1 and 2 cities well versed on what’s trending globally.
Direct to Consumer Sales and Social Media
It’s no longer only burgeoning beauty start-ups or D2C (Direct to Consumer) brands that are using social commerce and influencer marketing as tools for promotion. Premium brands also see the online sphere as a stage for storytelling. “There are many beauty influencers today who cater to different audiences who love them. Because of the reach they offer, brands love them too and therefore choose them to make people aware of new launches,” says Vasudha Rai, author and beauty writer, stresses on the currency of Instagram over magazine editorials. While most agree that online visibility and social marketing is the way forward, personalization is another key trend. “Video consultations, coupled with digitization and technology, are changing the way we consume beauty,” says Kumar of Kiehl’s. At its stores, the brand has introduced a Healthy Skin Assessment tool across the country to assess the strength of the the skin barrier and hydration of the epidermis, along with a customer-facing app to personalize the experience further.
Packaging adds to the luxurious seduction. “It is important for a luxury brand to be led by design; aesthetics and ethics do not have to be mutually exclusive,” says Khosa, who offers products like the ‘Mitti’ raw honey face mask, hand-churned in small batches and sold in biophotonic violet glass apothecary jars.
“It is important to factor in that luxury is led by design — aesthetics really stand out and matter.”
KAVITA KHOSA, Founder, Purearth