India booms and heads upmarket

The market research firm hailed the market as one of the most promising in the world after revealing that sales of cosmetics and toiletries grew by 12.6 percent in 2006. As India develops economically and starts to pick up on Western habits, consumers are moving away from basic products and starting to buy more upmarket cosmetics. "Indian women have officially joined the search for the fountain of youth, driving up sales of both anti-aging and skin-whitening products,"​ said Carrie Mellage from Kline. "The industry as a whole is becoming more sophisticated to meets consumer demands. We are seeing a major shift across the board, from types of products sold to their formulations and even the purchase channels,"​ added the market analyst. As far as specific future developments are concerned, the report highlighted skin care as a segment that is likely to experience particularly high growth. Recent advertising trends support the conclusions of the new study as products like Ponds Age Miracle and Nivea for Men Whitening feature among the top new TV advertised cosmetics for the first half of 2007, according to AdEx India. Although the market for sophisticated cosmetics is growing it still lags well behind more basic goods like toothpaste and toilet soap. It is unlikely that basic personal care products such as these will be left out of the growth picture completely. While consumption is likely to shift towards more sophisticated cosmetics in urban areas, rural India is set to emerge as a target for marketers of every day toiletries. A recent report by the Associated Chambers of Commerce and Industries of India supported this analysis, saying that it expects sales of fast moving consumer goods like soap, shampoo and toothpaste to balloon in rural India over the coming years. The Indian cosmetics market is the thirteenth largest in the world, but it still has plenty of growth potential as spending on personal care is still low at only $3.40 per person in 2006 according to Kline. International personal care companies are already cashing in on the emerging market with Unilever and Colgate being among the biggest players. Both companies mentioned India in their latest financial results as being a country where they were seeing particularly high sales growth. Kline & Company will be presenting an overview of the Indian market at the HBA Global Expo in New York later this month to help potential entrants and current operators make the most of the opportunities.