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Sunday, Jul 07, 2002

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Cosmetics: More than skin-deep

Sowmya Krishnan

FOR players and target customers, the market for cosmetics has been through a long transition and several stages of evolution.

Multinationals woke up early to the Indian opportunity and entered the market in the mid-1990s.

Despite some initially difficulty, they have learnt the tricks of the trade and are now fighting tooth and nail with established Indian players. In terms of product profile, the herbal wave and renewed focus on cosmetics for men have been the two predominant trends over the past decade.

Herbal wave

Over the past couple of years, the herbal wave has been sweeping the skin care segment. This Rs 300-crore segment is perceived to be the hottest and the fastest growing. A slew of companies launched herbal skin-care products. Players such as Shehnaz Hussain have been in this segment for quite some time. With the dawning of the potential of this segment, players such as Biotique and Lotus Herbals, which operate in the premium segment, have become more prominent. Existing players too have expanded their range to include herbal variants. For instance, Hindustan Lever recently introduced the herbal version of its popular Fair & Lovely brand.

The belief that cosmetics are harmful to the skin and increased awareness among consumers of herbal products triggered the demand for natural products rather than chemical-based cosmetics.

Healthcare companies test the water

This trend has attracted a host of new entrants, including health-care companies such as Himalaya Drugs (with its Ayurvedic Concepts range), Dabur and Dr Morepan. While Himalaya's Ayurvedic Concepts have already hit the shelves, Dabur plans to launch three skin-care products this year.

With the acquisition of the Lifespring chain of health and beauty stores, Dr Morepan Laboratories is exploring opportunities in the cosmetics segment.

Targeting men

The cosmetics industry, traditionally believed to target women, has a new target segment: Men. No longer do cosmetics represent a `women only' market. Many players are coming up with skin care products for men.

The men's personal care segment is estimated to be worth Rs 790 crore, with Gillette having a large share of the pie. Others, including Godrej, HLL and CavinKare also have a presence in the market.

The growing demand for men's cosmetics inspired cosmetics majors such as Modicare and Amway to launch new products in the skin-care segment.

Modicare is coming out with its Velocity range, while Amway has launched its men's range in the Indian markets.

The market now

The Indian cosmetics industry appears to have considerable growth potential. Of the Rs 3,000-crore cosmetics and toiletries industry, the market size of the skin-care segment alone is estimated at Rs 1,200 crore.

Fairness creams account for around 60 per cent of the skin-care business at around Rs 700 crore.

This segment has some of the big names such as Hindustan Lever (Fair & Lovely) with a massive 53 per cent market share, followed by CavinKare (Fairever) with over12 per cent share and Godrej FairGlow with a 3.4 per cent share.

Other players such as Emami (Gold Turmeric and Naturally Fair), Revlon (Fair & Glow) also have a presence in this market.

Specialty creams such as sunscreen lotions, moisturisers, and toners, cleansing lotions, under-eye dark circle removing creams and cold creams contribute the rest.

The colour cosmetics segment, worth around Rs 300 crore, is most competitive with many multinational companies in the fray.

This segment can be further segmented into lipsticks, nail enamels, mascara, eye-liners and so on. While lipsticks account for nearly a third of the market at Rs 90-100 crore, the market for nail enamels is estimated at around Rs 110 crore.

The Lakmé brand is the market leader with a 50 per cent share, followed by Revlon. Mass market products account for a major share, around 70 per cent, while the premium segment accounts only for a mere 9 per cent in lipsticks and 5 per cent in nail enamels.

Here again Hindustan Lever dominates with its Lakmé and Elle 18 brands, followed by such multinational brands as Revlon and Maybelline. Tips & Toes is another major Indian player in the colour cosmetics segment.

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