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India and Southeast Asia: high-potential markets for luxury cosmetics
By Shilpa Dhamija09 janvier 2024
As growth in the luxury cosmetics segment slows in China, South Korea and Japan. Two regions - India and Southeast Asia hold the greatest potential for expansion over the next decade, as luxury cosmetics sector here could touch 12.7 billion by 2030.
The market potential for luxury beauty in India and Southeast Asia is forecast to reach $7.6 billion by 2026, and hike to $12.7 billion by 2031, tripling its 2021 size, according to Kearney. The progress will be spurred by emerging middle and high income populations that will collectively cross 1 billion by 2026 in India and SE Asian countries - Thailand, Vietnam, Philippines, Malaysia, Singapore and Indonesia. Interestingly, the growth potential in both regions is likely to benefit International brands more than home-grown brands. Elaborating further the study states that seasoned international brands could dominate as much as 97% of the luxury beauty segment. Unlike developed markets in Asia, such as China and Japan where local brands have managed to maintain about 39-40% of the luxury beauty palette.
In India, luxury is on the rise
According to a report by India based Redseer consultancy, the country’s total BPC market is expected to grow at 10% CAGR (compound annual growth rate), while China and US are projected to grow at 7% and 5% respectively, making India the fastest growing BPC market in the world. But how much will the luxury segment benefit from this acceleration? In the BPC sector, the per capita spends in the US & China is more than $150 while in India the number is well below US$ 15 according to industry estimates. Are India’s consumers ready to pay more for premium products? “Penetration as well as migration from lower price points to higher price points will happen”, answers Abhijit Routray, co-author of the Redseer report. Currently the premium BPC segment in India is only 10% to 15% of the total market leaving a lot of scope for premium brands to accelerate. “Masstige(mass+prestige) and premium segments are already growing twice as fast as the mass segment in India”, he informs.
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