Genies in a bottle: How India’s beauty industry is getting a makeover
Hold the moisturiser. India is in the middle of a beauty boom. Big money is backing small brands. New recipes are emerging from the kitchen, the lab and the forest. First-time buyers from small towns are altering business models. Reels and tutorials are wooing new audiences and sparking trends. See how the revolution is unfolding.
It’s the makeover few saw coming. India already had a small but determinedly growing market for cosmetics and skincare. Over the last decade, local start-ups jumped in, hoping to beat out the handful of long-established mass-market brands. It seemed India was changing, one lipstick at a time. Then, overnight, the country found itself in the middle of a beauty boom.
Nykaa, a 10-year-old online retailer, sells everything from ₹55 eyeliner to ₹10,000 eyeshadow palettes and ₹29,000 devices that use micro currents to tone skin. The company is valued at $8.7 billion and made it to Time magazine’s 100 Most Influential Companies List for 2022. Its founder, Falguni Nayar, is India’s richest self-made woman.
Nykaa’s chief homegrown competitor isn’t doing too badly either. Purplle, founded in 2011 by Manish Taneja and Rahul Dash, is valued at $1.1 billion.
Meanwhile, signs of change are everywhere. Old brands are reaching new fans. Buyers are being seduced by names that didn’t exist a generation ago. You can now choose between Mama Earth and Earthbaby, MyGlamm and Glam Glow. You’ll learn that Aqualogica is different from Dermalogica, that Sugar and Plum are not for eating. And that both Chemist At Play and Juicy Chemistry can be fun to try.
Beauty junkies tend to post their bare-but-glowing faces with the hashtag #WokeUpLikeThis. India certainly didn’t. Our oldest homegrown cosmetics brand, Lakmé, dates to 1952. Mass-market foreign brands only started trickling in after liberalisation, in the 1990s. Both operated largely unchallenged for decades. Here’s how the revolution came to be.
Small towns are making a big impact
Online shopping has transformed small brands and small cities. It’s given consumers outside metros access to products that weren’t easily available before. It’s allowed small brands to reach their target audiences directly, and flourish.
It has worked especially well for the beauty market. “India’s smaller cities have a latent pool of consumers with the money and the desire to take their grooming a notch higher,” says Vasundhara Patni, who launched her cosmetics brand, Kiro Clean Beauty, in August 2020.
These consumers typically spend less. Order values average ₹500, while the average order for a buyer in a metro is ₹800 to ₹1,000. But it’s still a shift. These are largely first-generation beauty buyers; young people in new jobs, scrolling on their first smartphones, freshly exposed to beauty sites and looking to switch from the products available at the local general store.
They’re spending a newly disposable income on small but sophisticated indulgences. And, of course, they’re relying on the internet for advice. The Connected Beauty Consumer report, a November 2020 survey by Google, the data aggregator Kantar and advertising company WPP, suggests that India’s Tier-1 cities (those home to more than 1 lakh people) have caught up with the metros (those home to more than 1 million people) when it comes to engaging with the beauty category.
“I’d seen other small brands reaching 99% of their target base of consumers in the first year because they were selling online and not waiting to open shops in smaller towns,” says Patni. It’s what made her confident that Kiro would do well too.
The action is largely online
At department stores, the beauty counters still look the same. Online, it seems like a storm has hit. Smartphones and cheap mobile data do what traditional advertising – billboards, magazine ads, TV spots – simply can’t. You can discover a new beauty product, find 20 Reels testing it, check out another 20 videos on how to use it, comparison-shop, order and pay for it all on one screen.
“We ended up looking at screens much more through the pandemic and more of us became comfortable with shopping online,” says celebrity makeup artist Namrata Soni. But makeup is an intimate purchase. You can return the wrong size of shoe or an outfit that doesn’t fit right. You can’t do that after trying on a lipstick or moisturiser. This is why online influencers have become essential, connecting potential buyers with items they can’t test.
The numbers show it too. The Connected Beauty Consumer Report found that Indian beauty consumers were shifting their attention from TV to digital avenues, and relying on social media to make purchase decisions. Among the consumers surveyed, 81% engaged with beauty creators on YouTube, and 26% had made a purchase as a direct result. An overwhelming 93% of respondents tuned in to beauty-related content more than once a month.
“There’s such an influx of information now, it’s changed the game for the beauty business,” says Patni. “What was once daunting has been demystified and democratised.”
It all went viral in the pandemic
Even before India went into lockdown in 2020, the market was heating up. “Mindsets were changing,” says Patni. “There was a belief, in previous generations, that if a woman dressed up, wore makeup, she was probably dumb. We saw that stereotype come apart over the past decade. Now, being well groomed is a part of appearing capable in the workplace.”
Celebrity makeup artist Soni saw the change unfold, as women began to dress up for more and smaller occasions. She launched her beauty brand, Simply Nam, in 2020.
The lockdowns gave this burgeoning market an unexpected boost. Stuck at home, there was plenty of time to try out a 15-minute face mask, let skin recover from sun exposure, and assess one’s cosmetic needs. It’s what made advertising professional Sachi Mittal decide to start her own beauty line too. “Everything available was so old-school,” she says. “I realised India needed high-quality products at a lower price point than luxury or imported brands, and that India could produce them.” She launched OTT Skyncare earlier this year. She’s already preparing to sell in Singapore and UAE.
Buyers are trying everything
When everything is a click away, anything is possible. “You see extremes among your customers,” says Mittal. “There’s the beauty junkie who is totally plugged in and interested. There’s also the woman who says she has no time to follow trends or stick to a beauty regime.” Soni says that even as young people are experimenting, “buyers in their 30s and 40s are trying out new shades and new products.”
It explains why the 2020 report showed that the top items bought online, accounting for three-fourths of total volume share, were basics: skin creams, shampoos, facewashes. This also explains why brands are working so hard to distinguish themselves from the herd.
Juicy Chemistry, launched in 2014, uses exotic extracts such as blood orange and geranium in deodorant sticks; and chilli, horsetail and black seed in their hair oil. Sugar Cosmetics, launched in 2015, sells everything from lip-colour crayons to priming balms (for use under foundation). Green & Beige, a year-old skincare and personal-care brand, makes a mask specifically to deodorise underarms.
The 2020 report claims that men are buying as much and as often as women, averaging three beauty products a month. Retailers see this statistic differently. Men still make the bulk of purchases on behalf of the family; it’s their name on the bank account, their phone that’s used to make payments online. It is true, though, that more men are starting to show an interest in personal-care products, typically after trying out a wife’s, sister’s or daughter’s purchases.
They want it clean-ish
Across the market, the focus is on presenting brands as safe, sustainable and effective. Soni says she was always careful about which products she added to her kit. But it was hard to find good products for Indian skin tones and tropical climates that came in sustainable packaging. That’s what Simply Nam focuses on.
The problem is, customers can’t often tell between a gimmick and the real thing. “People will consciously choose something that is advertised as cleaner, less toxic and more environment-friendly even if they don’t know the finer details,” says Patni. At one of her pre-launch focus groups, it turned out that most of those present thought a “Vegan” tag meant the product was “made by vegetarians”.
Last month, the Lifestyle chain of stores launched its first beauty brand, Iksu. The makeup range is advertised as vegan, cruelty-free, paraben-free, sulphate-free and free from formaldehyde — all trending terms in beauty today. Incidentally, India does not permit animal testing; so all product made here are cruelty-free by default.
The term Clean is catching on, as a safe tag that sounds good despite having no standard definition. At Kiro Clean Beauty, Patni, says it stands for “ingredients and formulas that have no negative impact on human health”, regardless of whether they are found in nature or created in a lab.
Juicy Chemistry’s manufacturing standards have been certified organic by French organisation Ecocert. Mittal’s OTT Skyncare draws on what she calls “floral alchemy”. This means 1% to 3% high-grade natural extracts (rose from the Netherlands, sunflower from India and water lily from Egypt) in cutting-edge formulations. “Indians are coming around to the fact that home remedies aren’t always the best or most effective. And not everything that is 100% natural will give you results,” she says. “It is possible to strike a balance.”
It’s a complex market
To design a brand that gives Indian women what they want, one must first identify what they want in the first place. Most international brands typically focus on trending looks and products that suit White complexions that age early, dry out in cold climates and show wrinkles. Asian imports, in turn, focus on pale hues, multi-step routines and light essences and serums. Indian women worry more about hyperpigmentation, combating grease and sweat, and finding colours that flatter warm-toned brown faces.
Soni says it took nine months of going back and forth with manufacturers to develop the first line of Simply Nam lipsticks. “I knew what was missing in the market,” she says. “Women kept telling me that reds didn’t suit them. This is because Indian skins needed a cooler tone.” She named the first one she created Poonam, after her late mother who was averse to warm reds.
Big money is coming in
To know how much the beauty and personal-care market has mushroomed, consider these statistics. In 2017, the industry was worth $11 billion in India. By 2021, it had more than doubled to $26.85 billion. Last year alone, investments worth at least $350 million were made in the sector.
And we haven’t reached peak beauty yet. India’s beauty obsession will be a $35 billion business by 2025, according to a joint study by the trade association Assocham and research agency MRSS. It will push the global beauty industry up too, from $511 billion today to $716 billion by 2025, estimates the American market-analysis firm Grand View Research.
No one knows which of today’s little brands will become tomorrow’s behemoths. So investors are waiting, watching and backing every dream, every cream, every blush. In addition to retailers such as Nykaa and Purplle is the Good Glamm Group, India’s first unicorn in the beauty segment, backed by L’Occitane, Accel and Amazon, among others, which owns the MyGlamm brand and offers inexpensive makeup kits, beauty tools and more than 100 shades of lipstick. The group’s personal-care brands cover cosmetics, haircare, skincare, mom and baby grooming, and hygiene.
Sugar Cosmetics, seven years old, is a $500 million company. The company Honasa Consumer, which owns the baby and skincare products brand Mamaearth, is valued at $1.2 billion. Among its bestsellers is a ₹399 onion-based oil to address hair fall.
The playbook has changed
The new brands are light on their feet. They don’t focus on salon sales. They don’t depend on A-list celebrities, billboards or magazine ads. And unlike the fashion industry, which still relies heavily on the wedding season, the beauty boom is not driven by formal receptions or cocktail evenings but by casual everyday wear.
Mittal’s OTT Skyncare is designed to feel luxurious but playful – no heavy jars, no Frenchified names. Simply Nam and several others use Indian models in a range of ethnicities and complexions to demonstrate their diversity. Kiro’s makeup is deliberately simple – stick eyeshadows that doubles as eyeliner, light coverage powders. “We don’t claim our mascara gives you lashes 14 times thicker. No one believes that anyway,” Patni says.
There’s work to be done
As new companies fight for the same consumers, via the same online channels, positioning a new brand is tricky. “A first sale is easy. Everyone is curious,” says Mittal. Getting customers to stay loyal is the challenge.
Meanwhile, Indian manufacturing, as many brands are learning, is inconsistent. Only a handful of factories make colour cosmetics. Soni says it was tough to get them to produce the same quality and colour fidelity in batch after batch. Patni admits “the colour game is not easy to hack”. Added to which, brightness settings differ from screen to screen, so some consumers misjudge the intensity of a shade and end up disappointed with their purchase.
As for the great ecommerce revolution? It’s not without its troubles. “In small towns, customers often order the same product from five different online stores as cash-on-delivery orders,” says Mittal. “They pay for whichever arrives first and cancel the rest. Brands end up paying to ship items that are ultimately unsold.”
Most new Indian brands are aiming to be accessible rather than a lofty aspiration to scrimp and save towards. Internationally, brands are focusing on refillable containers, at-home devices that produce custom lipstick blends, LED masks, bouncy textures and acid-based skincare. Some of those trends have reached Indian shores already, but haven’t found mass acceptance yet. “Prepare for more tech in beauty,” says Soni. And more of everything. India is borrowing from East and West; from the lab, the kitchen and the forest; from Indian traditions and red-carpet looks. You didn’t #WokeUpLikeThis. But there’s #NoGoingBack.