The Indian cosmetic market, which comprises of skin care, hair care, color cosmetics, fragrances and oral care categories, has outperformed world’s leading cosmetic markets in terms of growth in the recent past. The Indian cosmetic market has started witnessing rampant growth driven by improved spending power and rising consumer awareness about cosmetic products amid growing beauty consciousness.

The Indian cosmetic Industry has witnessed rapid growth in the last couple of years, growing at a CAGR of around 7.5% between 2006 and 2008 ,according to market analysts. With improving purchasing power and increasing fashion consciousness, the cosmetics industry is expected to maintain the growth momentum during the period 2009-2012 with a projected growth at a CAGR of around 7%. The average consumer spending on cosmetics in India is much lesser than any other part of the world. This implies that the Indian cosmetic industry has an even greater potential for growth in future than present.

The personalcare market in India is currently estimated at over Rs 300 billion and growing at a rate of about 12% annually. The major contributor to the size of the market is the soaps and synthetic detergents market of close to Rs 190 billion. Besides, skin care market at Rs 20 billion (including fairness creams at Rs 9 billion); hair care (including hair dyes, hair oils and shampoos) at Rs 26 billion; male grooming (and female hygiene) market at Rs 11 billion; colour cosmetics at Rs 5 billion; oral hygiene (tooth pastes, tooth powder and brushes) add another Rs 26 billion to the overall market. Other important components include perfumes and fragrances, estimated at over Rs 5 billion.

The market for perfumes and fragrances, as perceived in western parlance, is of a recent origin. The perfumes and fragrances market had remained confined to small quantities of scents, eau de colognes, deodorants and after shave lotions. Presently there are some 500 companies in the fragrance industry,  for the small volumes, a little too many. The small scale sector is  dominating the market. The unorganised market could be four times the size of the organised market.

The growth in demand for perfumes and fragrances over the last 15 years has been phenomenal. From a very small demand of 950 tonnes  in 1990-91, it grew to 12,500 tonnes  in 2000-01. The market for the product is estimated to have expanded by over 50% in three years to 18,300 tonnes  in 2003-04. It is further expected to grow to 26,650 tonnes  in 2006-07 and  to 36,400 tonnes  in 2009-10.

The organised sector is dominated mainly by the multinationals. The unorganised sector, with hundreds of units producing a large number of domestic concoctions, caters to the high upper-middle tier of the market for low price-end of products. The share of the small and informal sector is estimated at about one-third of the total market.

Several MNCs have forayed into the Indian market. These include Givaudan SA, Switzerland; International Fragrances and Flavours (incorporating Bushbooke Allen), USA; Quest International (subsidiary ICI and earlier a part of Unilever); Firmenc of Switzerland; Haarman & Reioner of Bayer, Germany; Taleasago, Japan (contract manufacturing).

The perfumes market is becoming highly competitive with the presence of an increasing number of new players. The consumer is getting used to the imported fragrances. As the process matures, the market will need to be diversified and more Indian. Companies are importing alcohols and oils to overcome the need for the right mix and process technology which does not exist in India. The consumer preferences and product variety are so wide that technology import is unavoidable at this stage. The market is growing.  It is catching up with the nouveau rich life style.  A long-term high growth trend can be seen provided the consumer finds the product within the reach of his pocket.

Some leading brands include Exclamation, Masumi, Longing, Emeraude, Vanilla Fields, Jill Sanders, David Off, Adidas, Jovan Musk, Joop (All Cotys Premium brand) Wild Orchid, Ivana, Shie (Lakme), Fire, Ice, Charlie, Red and White (Revlon) Denim, Yardleys gold, Park Avenue, Premium, old spice (HLL) etc.

Some of the lead playersinclude Coty India, Lakme Lever, Revlon, Yardly, Palmolive, Helene Curtis, Baccarose Hindustan Lever, Oriflame etc.

With a population of more than one billion and a growing taste for Western sophistication, India has become one of the fastest growing markets for cosmetics, perfumes and toiletries. There is a tremendous potential in this budding market.

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