In these complex times, brands have no choice but to move at the speed of culture and technology. However, it’s still not enough these days. A few years ago L’Oreal went on to become a beauty tech company from a pure beauty company with India playing a pivotal role in this journey. Aseem Kaushik, country managing director, L’Oreal said the beauty market in India is very buoyant. It’s growing between 10-12 percent depending on the channel we are talking about. Online is much more buoyant but offline also continues to grow.
“The expectations from a market like India is always high from a group level; it’s a market which is very dynamic and we expect this market to grow at 10 percent CAGR in the next three years,” saus Kaushik. The mandate for L’Oreal is that the beauty market is to grow two times the market, so if you do the math hopefully between the next 4-5 years, we should be a billion euro company in India. The strategy is to be the beauty advisor to India, Kaushik added.
Find out more about L’Oreal’s ambitions in Kaushik’s exclusive interview with Storyboard18’s Delshad Irani.
Edited excerpts.
Where are you seeing the next level of growth coming from?
Beauty market in India is estimated to be about 6.5 billion euros in total in 2023. The biggest category in the beauty market is skincare which is about 30 percent, followed by haircare which is about 20 percent and then followed by makeup at 15 and hair oil at about 16-17 percent. It’s followed by hair colour at 10 percent and you have smaller categories like fragrances, hygiene, body, etc. This 6.5 billion will grow to 9 billion euros by 2026. It is going to be led by categories which are very dynamic.
The beauty consumption per capita in India is about seven and a half dollars. You compare that to Indonesia, it’s about 20. There is so much for the Indian consumer to firstly get to know and understand what their particular beauty needs are. Is it a problem which they are looking for as a solution or are they looking for trends which are happening in Paris, New York or the celebrity they are trying to follow. Almost 30 percent of consumers in India are the relevant target set.
We are a 1.4 billion population country. We are a very big country. So, you have to keep focus when you are looking at the kind of consumer you are going after. For L’Oreal, in India, we look at a consumer who is earning 20 dollars a day. The estimate that they are close to almost 250 million consumers, we are talking about 25 crore customers who could be L’Oreal’s larger universe. This larger universe is almost at the same spending level in terms of per capita consumption as Indonesia or what China was about 15 years ago and 70 percent of the consumption of the market in urban India happens with these 25 crore customers overall. There is a huge opportunity both from increasing the number of regimes at the consumer’s end and for them also to upgrade to more innovative products. Therefore, it’s going to be both penetration and valorisation for consumers in the times to come.
L’Oreal moved from a beauty company to a beauty tech play. How is that working out for you? How is India setting a benchmark globally for L’Oreal?
Today the Indian consumer is super hyper connected to the digital world. They are the digital natives who experience everything that happens around the world at the same time as anyone else. And, there is the opportunity of ecommerce that pans out in front of us.
The big challenge for our kind of innovative products is to find ways to reach the consumer and asking ourselves to talk to them about what we bring to them to solve either their concerns on skin and hair or to bring them the latest trends which are happening. So, all this is now a huge opportunity which has been solved. Today almost everyone is connected digitally. The data prices in India are probably the lowest in the world. Now the big challenge is how do you build your brands and its equity and proposition online. For us this is a great opportunity. In 2010, we christened ourselves as a beauty tech company. We have to be part of any trend when it starts. Nobody understood then why we are calling ourselves beauty tech. Today, the big thing online when you talk to a consumer, is to help them reach a similar experience like the one they would have offline, whether it’s about augmented and virtual reality or trying a product out.
AI happens to hyper augment hyper-personalization. We have set up a center of excellence in India which is all about making sure the right kind of content and messaging is going to reach every consumer in a very precise way. There are 200-250 people sitting there who are doing just this right now for India, South east Asia and the Middle East.
Do you see new beauty brands as a collective threat for L’Oréal?
A lot of new beauty brands coming in is good news for the beauty market. The beauty market is still very nascent, more people who come in with their brands and technology will be helping create buzz around beauty rituals and products in the market. We have faced this not only in India but around the world. For us, competition is super welcome. Then it’s a question of let the best win. L’Oréal is not only a beauty tech company but also a science based company. We have got 22 research and innovation centres across the world with 5000 scientists working for us. We file almost 600 patents every year. In India, the animal testing ban happened in 2014. There is a product called EpiSkin, which mimics human skin where you can test various products and this skin is a product which L’Oréal invented and today it is being shared with cosmetic and dermatological companies.
Watch the full conversation on Media Dialogues With Storyboard18