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

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

  • MyStocks

MEMBER'S LOGINX

     
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

SHEELA FOAM LTD Share Price Down by 5%; BSE FMCG Index Down 1.7% (Market Updates)

Sep 22, 2020 | Updated on Sep 22, 2020

SHEELA FOAM LTD share price is trading down by 5% and its current market price is Rs 1,457. The BSE FMCG is down by 1.7%. The top gainers in the BSE FMCG Index is GSK CONSUMER (up 5.1%). The top losers are SHEELA FOAM LTD (down 5.0%) and VENKYS (I) LIMITED (down 6.5%).

BAJAJ CONSUMER CARE Share Price Down by 5%; BSE FMCG Index Down 0.5% (Market Updates)

Sep 22, 2020 | Updated on Sep 22, 2020

BAJAJ CONSUMER CARE share price is trading down by 5% and its current market price is Rs 180. The BSE FMCG is down by 0.5%. The top gainers in the BSE FMCG Index are GSK CONSUMER (up 5.1%) and BRITANNIA (up 1.2%). The top losers are BAJAJ CONSUMER CARE (down 5.0%) and CCL PRODUCTS (down 5.4%).

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE FMCG


Sep 22, 2020 (Close)

S&P BSE FMCG 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS