How Indian beauty care has blossomed into a kaleidoscope of innovation and diversity

The beauty care industry in India has seen substantial growth over the years, transforming into a dynamic and fast-paced sector. As of 2023, the Indian beauty and personal care market was estimated to be worth over $15 billion and is projected to grow at a compound annual growth rate (CAGR) of around 9% over the next few years. According to the Nykaa Beauty Trends Report, the Beauty and Personal Care (BPC) market is pegged to reach $34 billion by 2028, driven by online penetration of core beauty categories.

A Historical Perspective

Traditionally, Indian beauty care relied on natural ingredients and Ayurvedic practices. Homemade concoctions and seasonal routines were the norm. Ayurveda, the ancient Indian holistic healing system, played a key role with “tailams” (oils) and “ghritas” (clarified butter) used for skincare.

However, the industry witnessed a significant shift in the 1990s. The 1990s were not only marked by economic liberalization, but also by significant successes in international beauty pageants, with Indians winning two Miss Universe titles (1994 and 2000) and four Miss World titles (1994, 1997, 1999, and 2000). It is believed that the growing popularity of yoga, coupled with these international beauty wins, contributed significantly to the rise in popularity and sales of cosmetics in India. The Indian beauty industry saw robust growth following the Miss World pageant held in India in 1996, sponsored by Godrej.

Since then, the Indian beauty industry has seen remarkable growth. Numerous international brands entered the country following economic liberalisation, contributing to the expansion of the Indian cosmetics market.

Growth of Beauty care industry

Recent projections indicate significant growth in India’s beauty, cosmetics, and grooming sector. According to Assocham (2016), the market is expected to reach $20 billion by 2025. The Confederation of Indian Industry (CII) estimated the total Indian cosmetics market to be valued at $950 million, with an annual growth rate of 15-20%. More recent data projects the Beauty & Personal Care market in India to generate revenue of $31.51 billion in 2024, with an expected annual growth rate of 3.00% (CAGR 2024-2028). The largest segment within this market is the Personal Care segment, which is estimated to have a market volume of $14.31 billion in 2024.

With a population of 1.4 billion, India is the 4th largest beauty market in the world, expected to grow by 40% by 2026, as highlighted at Cosmoprof India, held at Jio Convention Centre in Mumbai. The Indian cosmetics products market size is estimated at $1.35 billion in 2023 and is projected to reach $2.27 billion by 2028, registering a CAGR of 10.91% during the forecast period (2023-2028).

Industry Insights:

Shaily Mehrotra, Co-founder, Fixderma, noted, “The beauty care landscape in India has blossomed into a kaleidoscope of innovation and diversity, propelled by various socio-economic factors and changing consumer trends.  With a market size exceeding ₹1.4 trillion, it reflects the nation’s growing emphasis on personal grooming and wellness with endless possibilities. Major players and emerging disruptors paint a vibrant tapestry of competition and collaboration.”

Mini Sood Banerjee, Assistant Director and Head of Marketing, Amorepacific India, who oversees a portfolio of four luxury and premium brands in India like Sulwhasoo, Laneige, Innisfree & Etude, shared, “The beauty care industry in India has been experiencing robust growth, driven by increasing consumer awareness, rising disposable incomes, and a growing emphasis on grooming and personal appearance. As of 2023, the industry is estimated to be worth around $11 billion and is expected to grow at a CAGR of approximately 10% over the next five years. The market encompasses various segments, including skincare, haircare, color cosmetics, fragrances, and personal care products.”

Similarly, Mansi Sharma, Founder, The Honest Tree by Boddess, said, “Providing an overview of the Indian beauty market is very exciting right now because it is rapidly evolving. Every other week, new brands emerge with the support of VCs and platforms like Shark Tank, celebrating entrepreneurship and female independence. Beauty is the first industry that comes to mind. People all around the country are leaving their corporate jobs, rejecting societal norms dictating appearance, and are defining beauty for themselves. Of course, there are major players, including VC-backed ones like Mama Earth, Colorbar, and Lakme. However, if you delve deeper, numerous smaller homegrown brands address specific niches, from body bacteria to melasma, catering to diverse skin concerns prevalent in our country. It's highly personalized and increasingly premiumized.”

Evolution of the beauty industry

As discussed, the beauty industry in India has seen a remarkable evolution over the past few decades, transitioning from traditional, home-based remedies to a dynamic, multi-billion dollar market. The influence of globalization has brought international brands and modern technologies to the forefront, while the resurgence of Ayurvedic and natural products reflects a blend of old and new. Digital transformation, especially e-commerce and social media, has significantly reshaped consumer behavior and accessibility. The rise of beauty influencers and localized marketing has further personalized consumer engagement, making the industry diverse and rapidly adaptable to global trends and innovations.

Vikas Gupta, Managing Director & Group CEO, VLCC, added here, “The evolution of the beauty industry in India mirrors the country's economic growth. As people’s incomes increase, they begin to explore new categories of products beyond the basics. There’s a strong correlation between per capita income and the consumption of beauty and personal care products. In the past, the market was dominated by basic mass-market products like fairness creams, soaps, and talcum powders. As the economy grew and more women entered the workforce, there was a rise in the desirability and availability of new categories.”

According to Fixderma’s Shaily Mehrotra, “The rise of aesthetic clinics across India shows how much the beauty care industry has changed over time. One big change is that people are now paying more attention to what’s in their beauty products. They want to know exactly what ingredients are used and if they're safe. This shift has also led to a growing interest in clean and natural beauty products. People are looking for products that are free from harmful chemicals and additives. Beauty brands are responding to this demand by creating cleaner, more sustainable options for consumers. Overall, the beauty care industry in India is evolving to meet the needs of a more informed and conscious consumer base.”

Mini Sood Banerjee, Assistant Director and Head of Marketing, Amorepacific India, elaborated, “Every day, the Indian beauty market improves and changes. There are several products on the cosmetics market now that address different skincare issues. Over the past five years, the beauty brands have become increasingly competitive with the established brands, making it harder for new products to make an impression on the market. In the next five years, brands will undoubtedly work together to provide consumers high-quality, comprehensive skincare products. The goal over the next five years will be to strike a balance between customer demands and innovation. As a new tool to work on for raising brand visibility is innovation.”

Mansi Sharma, Founder, The Honest Tree by Boddess, opined, “The evolution of the beauty care industry aligns with the changing perception of women about themselves and others, as they prioritize self-care more. In previous generations, women often neglected self-care, viewing it as a point of pride to be low maintenance. Today, with increased financial independence, women prioritize self-care, recognizing its importance in fulfilling various roles. This shift has fueled the industry's growth, with a healthy annual CAGR of about 11%.”

Prevailing Trends Shaping the Beauty Care Industry in India

Several trends are currently shaping the Indian beauty care industry such as:

Natural and Organic Products: There is a growing preference for natural, organic, and Ayurvedic products as consumers become more health-conscious and environmentally aware.

Personalization: Consumers are seeking products tailored to their specific needs and preferences. Brands are leveraging technology to offer personalized skincare and beauty solutions.

Inclusivity and Diversity: There is a rising demand for inclusive beauty products that cater to diverse skin tones and types, reflecting the country's multicultural population.

Sustainability: Eco-friendly packaging and sustainable sourcing of ingredients are becoming critical factors in consumer decision-making.

As shared by Shaily Mehrotra, “Skincare is becoming a daily essential, seamlessly included in everyday routines for a healthier complexion. In India, people are paying more attention to taking care of their skin every day. Now, using sunscreen and body lotions has become a regular part of many people's skincare routine. This shows that more people are realising how important it is to protect and nourish their skin. In the future, we can expect to see even more skincare products tailored to different needs and preferences.”

Similarly, Mansi Sood from Amorepacific India said, “The prevailing trends in the beauty market can be e- commerce platforms that are working on improving the sales and gaining popularity among the audiences. The e-commerce platform is increasing the customer engagement among the people and providing them the feedback option to solve their problems. This trend will influence the brands and will change the future trajectory of brands to focus on increasing traffic over their websites. These collaborations of brands with online platforms will support the technology advancement and make it easier for brands to make their products visible and promote in the market.”

Agreeing with industry experts, Vikas Gupta of VLCC said, “The advent of e-commerce has accelerated the trend, democratizing access to a wider range of products. The industry has seen the introduction of new categories like color cosmetics, serums, and body masks. One of the most significant changes has been the integration of technology and services. While consumer products can achieve a certain level of results, high-end services and FDA-approved technologies can deliver far superior outcomes. This is a game changer, especially for consumers who have higher aspirations for their appearance.”

Similarly, Mansi Sharma from The Honest Tree said, “At present, many homegrown brands address local concerns, reflecting a broader trend of increased patriotism and awareness of diverse skin needs. Additionally, there’s a demand for multi-functional products, blending makeup with skincare, driving innovation and setting higher standards.”

Role of New-Age Startup brands

New-age startup brands are playing a transformative role in reshaping the beauty business landscape in India. By disrupting traditional norms and practices, these brands are pioneering a new era of transparency, authenticity, and innovation within the industry.

Shaily Mehrotra of Fixderma, highlights the importance of startups focusing on Know Your Supplier (KYS). In today's consumer-driven market, where there is a growing awareness of the ingredients used in beauty products, startups need to prioritize understanding and being transparent about their sourcing practices. By ensuring honesty in ingredient sourcing, these brands are building trust with consumers and setting new ethical standards in the beauty industry.

According to Mini Sood, modern startups are addressing outdated consumer needs with creative and innovative solutions. These brands offer a diverse range of products with unique features and benefits, altering audience preferences and trends. By balancing innovation with traditional practices, startups are gaining recognition in a competitive market and attracting a broader customer base.

Mansi Sharma emphasizes that new-age startup brands are also targeting niche markets, challenging traditional beauty standards by promoting diversity and inclusivity. Their approach informs larger industry players of evolving consumer preferences, setting higher benchmarks and fostering healthy competition within the beauty sector.

Shift from Celebrity Endorsements to Social Influencers

The shift from traditional celebrity endorsements to social influencers marks a significant evolution in the beauty care industry in India. This transition is reshaping how brands engage with their audience, offering a more personalized and relatable approach to marketing.

Mini Sood Banerjee highlights the growing influence of social media in this transformation, stating: "A significant development in the modern world is the move from celebrity endorsements to social influencers. Social media platforms have made consumer engagement more interactive, enabling audiences to connect easily with influencers who resonate with their needs." Banerjee emphasizes that in the Indian market, creating a strong bond between the product and the target audience is crucial, and social influencers are proving to be more successful in fostering these connections. She also notes Laneige’s recent decision to appoint Sara Tendulkar as their brand ambassador, reflecting the brand's belief in individuality and unique inner and outer glow.

Shaily Mehrotra provides a different perspective, acknowledging the continued relevance of celebrity endorsements, particularly in reaching Tier 2 and Tier 3 cities. "Celebrities have a broad appeal, making them easily connect with Tier 1, Tier 2, and Tier 3 cities, or even mass audiences," says Mehrotra. She stresses the importance of a balanced approach, noting, "While influencers engage consumers on a more personal level, celebrity endorsements are crucial for better reach, especially in offline markets."

Mansi Sharma also underscores the evolving concept of celebrity status, with social influencers playing a pivotal role in shaping consumer engagement. "The concept of celebrity status has evolved with increased accessibility, and social influencers play a significant role in shaping consumer engagement and brand perception," Sharma explains. She cautions against inauthentic endorsements, emphasizing the need for a balanced approach that genuinely resonates with consumers.

As the beauty industry continues to evolve, the strategic use of both social influencers and celebrities will be key in navigating the complex landscape of consumer engagement and brand perception in India.

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