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Cosmetics & skincare: It’s the lipstick effect

Fashion stylist Karishma Vohra had her big fat flashy Punjabi wedding last week. And, to match her wedding trousseau, she spent Rs 15,000 on make-up from high-end brands MAC, Shiseido and Chambor.

entertainment Updated: Dec 13, 2008 20:39 IST

Fashion stylist Karishma Vohra had her big fat flashy Punjabi wedding last week. And, to match her wedding trousseau, she spent Rs 15,000 on make-up from high-end brands MAC, Shiseido and Chambor.

It's because of customers like Vohra, who insists that "make-up is a necessity”, that the India's Rs 4,750-crore cosmetics and skincare industry is not in the red. On the contrary, it is set to grow to Rs 7,000 crore in the next two to three years, according to a report by the Associated Chambers of Commerce and Industry.

“The disposable income in India hasn't gone down yet, so cosmetic sales are growing because they are impulse purchases,” explains Deepak Bhandari, director, marketing at Modi Revlon.

Also, where there is gloom around, people tend to look good and spend money on the smaller treats — a pair of danglers, the odd chocolate or a new scarf. Leonard Lauder, the chairman of Estée Lauder, called it the “lipstick effect,” when he
saw his company's sales surge in the aftermath of the 2001 terrorist attacks in the US.

Twenty-one-year-old marketing professional Simran Lamba is a true 'recessionista' — a person who looks stylish even while cost-cutting during recessions. “I would rather spend less on clothes than cut down on cosmetics,” declares Lamba, who can't do without her Rs 800 coloured lip-glosses from MAC every month. “I love make up and besides, my job also requires me to look good all the time,” she says.

Cosmetic majors like Oriflame, Revlon, Lotus Herbals and Colour Bar are all reporting healthy sales. “There are many products... where we have overshot our estimates,” says Nitin Passi, marketing and sales director, Lotus Herbals Ltd.
And the colour cosmetics market — eye make-up, lipstick, nail enamel, blush-on, etc — is the fastest growing segment, valued at Rs 300 crore, with lipsticks and nail enamels accounting for 65 per cent of the market.

“Sales of colour cosmetics will not decline because they help women feel more beautiful and confident. Also, cosmetics are a small expense and during a recession, people tend to cut back on larger expenses,” says Sameer Modi, managing director of ColorBar, a colour cosmetic brand. Incidentally, Colorbar saw its highest sales of Rs 3.5 crore in October, a month in which the Sensex crashed below the psychological five-figure mark of 10,000.

“Looking good and feeling good are now basic needs that are fulfilled with the use of beauty products,” says Dinesh Dayal, the chief operating officer of L'Oreal in India, which also has make-up brands like Maybelline and Lancome in its bouquet.

It's the same story at salons. Pakhi Mohnani, 25, who recently opened the Make-Up Lounge in Mumbai's suburb of Bandra, gets around six clients a day. In fact the slowdown has worked to her advantage, she says: “Due to less work, people have more free time to go out and have fun. They want to look good and get a different image each time.”

With make-up sales continuing to grow at over 20 per cent, it is unlikely that the trend will reverse. As Lamba puts it: “Make up is no longer a luxury. It's a need.”