The Indian ‘beauties’ beckon - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

The Indian ‘beauties’ beckon

Sep 13, 2000

The Indian consumer never had it so good. Gone are the days when the cosmetics segment was largely identified with Lakme, Ponds and a host of locally made creams. International bigwigs like Revlon, Avon, Estee Lauder, Christian Dior and J. K. Hellen Curtis are all vying with each other to capture the Indian cosmetics freak. The question is what are all these fashion powerhouses doing in a country with a per capita income of about US$ 400. All these MNC’s are facing intensive competition in the developed world, where the market size has stagnated and hence the look out for additional markets with burgeoning middle class like China and India.

Let us try and understand the dynamics of this ‘dynamic’ segment.

The Indian Skin-care market valued between Rs 6-6.5 bn is growing at an impressive 22%. The segment can be broadly classified into 2 sub-segments:

  • The Fairness segment (50% of the total market)
  • The Non-fairness segment (50%)

Out of these, the fairness market is growing faster at 30% per annum, whereas, the non-fairness segment is growing at a steady 15%.

The Fairness segment
Fairness creams command over 95% of this market. Fairness lotions have not been so popular and are losing market shares heavily. Hindustan Lever’s (HLL) Fair & Lovely dominates 90% of this segment and a hefty 45% of the total skin care market (in value terms).

Southern India is skewed towards fairness cream consumption. Over 60% of its cosmetic spends are on fairness creams and lotions.

The Non-fairness segment
The segment is highly fragmented and different brands dominate each fragment. The segments include cleansers, cold creams, gels, nail polishes, eyeliners etc. Cleansers are the largest contributors in this category and accounts for about 10% of the total skin-care market. Cleansers can be classified into 4 segments:

  • Face wash (50% of all cleansers)
  • Cleansing milk (20%)
  • Deep cleansers (15%)
  • Astringent (15%)

HLL owned Lakme and Ponds dominate this segment. Lakme and Ponds each account for over 10% of the total skin care market (Rs 60-65 m each). In all, HLL effectively controls 65% of the total skin care market (around Rs 4 bn), if we add its Fair & Lovely contributions also.

Since new entrants cannot fight the heavy weights in the volume driven fairness segment, they have entered the non-fairness segment, positioning their products based on superior attributes to the upper end consumer in the urban market. Their distribution is at select up town stores and through personalised selling. Realising that the skin–care segment is brand sensitive, their aim is to earn a fan following in niche segments and then introduce a spate of products as brand extensions. They are looking at small volumes but big numbers.

The successes of Indian ladies at International beauty pageants (Miss World and Miss Universe) will only add fuel to this already growing segment.

Equitymaster requests your view! Post a comment on "The Indian ‘beauties’ beckon". Click here!


More Views on News

What Happens if ITC Hives off ITC Infotech? (Views On News)

Nov 20, 2021

The cigarette to hotel conglomerate is reportedly mulling the demerger of its software business at a valuation of around Rs 250 bn.

What Sparked an 8% Rally in ITC Shares Today? (Views On News)

Sep 16, 2021

ITC did not participate in the rally after the second wave and continued to underperform its peers. Is this about to change?

HUL's Marketcap Tops Rs 6 Tn. Key Factors Driving the Stock (Views On News)

Aug 21, 2021

HUL became the fifth Indian company to achieve the milestone of a Rs 6-tn market capitalisation.

Adani Wilmar IPO to Hit the Market Soon. Should you Apply? (Views On News)

Nov 29, 2021

The parent company of the brand Fortune is set to raise Rs 45 bn from the market.

Key Points to Know Before Applying to Dodla Dairy's Public Issue (Views On News)

Jun 14, 2021

What you should know before applying to Dodla Dairy's IPO.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 6, 2021 03:36 PM