India: Premium Cosmetics Could Grow by 30% to 40% Over the Next Five Years

As the spending power of Indian consumers rises, the country’s luxury and prestige beauty market is forecast to grow faster than that of China over the next decade, sparking the interest of many global brands to capture the market early on. Renowned names such as Dr Barbara Sturm, Urban Decay, Huda Beauty, Charlotte Tilbury, Sulwhasoo, and Pat McGrath Labs are all selling in India and chose Nykaa as their local partner to make their first move in the Indian market. In an in-depth interview for Luxury Tribune, Anchit Nayar, Executive Director and CEO of Nykaa Beauty, explains what makes India’s prestige beauty market different from any other global market and the best ways to maneuver it.

Today, India’s BPC market is where China’s was in 2005 when there was a big shift from unorganized retail to organized retail, from personal care to beauty categories, and from mass to masstige & prestige. India is seeing a similar evolution. India’s GDP per capita is now US$2500. Historically, India’s BPC has been dominated by personal care in very basic categories like bath, body, and hair. Currently, the beauty segment is less than 20% of the total BPC market. Looking forward, the fastest growing categories in the BPC segment will be makeup, skincare, and fragrances because India's ability to spend on discretionary categories is rising, and so is the availability of various brands. In China, the trend is inverse. 60 to 70% of their market is beauty. Moving towards beauty is the natural trajectory of a population whose disposable income is rising. India will see a similar growth story as China, but it will not be exactly the same. In India, growth will take time. But in the next 10 years the size of the prestige beauty market in India may be able to rival that of China.