With an aim to building on the foundation of its 'think global, act local' strategy that will initiate the next round of growth in India, French cosmetics giant L'Oreal on Thursday unveiled its first Research & Innovation centre in Mumbai.
The R&I centre will help L'Oreal take the traditional route to introduce 'made for India' products that use with established regional ingredients such as amla (Indian gooseberry) or with ayurvedic leanings to woo consumers. L'Oreal aims to invest Rs. 970 crore by 2016 on the R&I centre.
"There is a science in India about ingredients and it is precious," said Jean Paul Agon, chairman and CEO, L'Oreal. "We'll develop and use these ingredients as much as we can. And the more we use traditional ingredients, the more farmers will grow them thus helping the economy."
"It's impossible to sell products here that we formulated for the European or the US markets as they are more adapted for those markets," said Jochen Zaumseil, executive vice-president, Asia Pacific Zone. "Innovation will play a major role to help drive growth here and the opening of the R&I center is a symbolic gesture to that."
L'Oreal's India contribution to its global revenues is still small. The beauty and cosmetic firms global revenues are to the tune of Rs. 1,45,410 cr while the India revenues are estimated to be about Rs. 1,600 crore.
L'Oreal has set revenue targets of Rs. 7,000 crore by 2020. The company has been operating in India for 18 years now and is yet to achieve profitability.