The best approach to targeting the India cosmetics market – be fully prepared!

By Simon Pitman

- Last updated on GMT

The best approach to targeting the India cosmetics market – be fully prepared!

Related tags Price India

Targeting the India market for cosmetic and personal care goods requires a clear strategy that avoids a number of potential pitfalls, claims Anurag Sharma, executive director of Ayurveda-based cosmetics brand Baidyanath.

The company has been operating in India for almost 100 years and has built up a reputation as the leading ayurvedic cosmetic and personal care player in the sub-continent, a position that gives it unparalleled experience in the natural category there.

The first thing that Sharma points out is the fact that the market is vast, culturally diverse and highly complex, which means that the approach to marketing and distribution has to be very precise.

In particular, Sharma, who will be giving a presentation at the forthcoming Sustainable Cosmetics Summit in Hong Kong​, cautions on the correct approach to one of the biggest target consumer groups, the vast Indian middle class.

Targeting the middle class is a 'difficult process'

“One needs to understand that we may seem to have one of the world’s largest Middle Class populations, but access to them is a difficult process,”​ he says.

On the back of this, Sharma suggests three simple rules to getting it right:

  • Hire individuals with direct experience in the FMCG industry
  • Create a strong back office for legal, accounting and tax support
  • Concentrate on the West and North India markets at first

But on top of logistical and demographic concerns, there also has to be a comprehensive understanding of the Indian consumers, how they behave and what they want. Likewise, pricing and the size of the product are also crucial.

Getting pricing and product size right...

Anurag Sharma, executive director, Baidyanath

“Indians are very price and status-conscious buyers.  Invariably, if you want large volumes then addressing the base of the pyramid consumer is critical, especially when addressing the rural market,”​ says Sharma.

“In the urban markets, the Middle Class customer takes prominence when one is looking to launch a price-sensitive and volume intensive business. At those sensitive price points, Indians prefer to buy small sizes at lower prices frequently and prices have to be adjusted accordingly.”

Luxury and prestige brands are also growing in popularity in India, but for now these products are strictly confined to what Sharma refers to as Tier 1 urban markets and cities, which includes Mumbai, Delhi, Bangalore and Hyderabad.

Only the wealthier cities for luxury products

“Within these cities, the retail locations are key to success and would either include High-end Street locations or prestigious/luxury malls. The desirable entry method in such locations is through exclusive retail stores or shop in shop concepts with similarly aligned designer or retail brands,”​ Sharma says.

Likewise, Sharma believes there is still a significant gap in the market for luxury and prestige products that really deliver in terms of efficacy, something that also bodes well for active ingredients suppliers.

Looking ahead, Sharma says she is particularly optimistic for the natural cosmetics sector to develop a lot faster in India because “there is a huge alignment with our culture and traditions for such products,”​ which is being further boosted by growing consumer awareness .

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