India market brimming with up-market potential

By Simon Pitman in New York

- Last updated on GMT

Related tags Personal care Cosmetics

Although the Indian market remains weighted towards basic personal care and cosmetics products, a growing and increasingly affluent middle class is behind the switch to more sophisticated products.

Reflecting this is the fact that approximately 33 percent of the market in India comprises basic personal care and toiletry products, compared to around 12 percent globally – figures that suggest there still remains plenty of room for growth in more high-end items.

These figures were given in a presentation at the HBA conference in New York yesterday, by Karen Daskow, from market reasearch group Kline.

Market going in new directions

Daskow was highlighting key market information from the company's recently published report on the Indian personal care market, which underlines the fact that the market is growing fast and heading in new directions.

Overall growth is surpassing the global average by a long way, something that is manifesting itself in the development of new categories for the market, including liquid soaps, men's grooming products and multi-functional skin care products.

The growth is largely being driven by an ever expanding middle class, which is rapidly evolving due to the expansion of service orientated industries as well as the development of newer industries such as information technology and consumer goods;.

All this means a vastly increased spending power that is translating into a bigger spend on personal care products.

Population remains largely rural

However, despite huge growth in the size of the economy and the urban middle class, India's population still remains largely rural or semi-rural, with basic spending habits in the personal care category.

This means that there is still massive demand for basic personal care products like bar soap, dentist powder and one serving sachets of skin care and hair care products.

On the other hand there have also been significant developments in the oral care, skin care, hair care, fragrance and deodorant categories driven by the rise of the middle class.

In her presentation Doskow pointed to the fact that the unique and increasingly diverse characteristics of Indian society and demographics have in turn led to some equally unique developments in the personal care field.

One example of this comes in the fast growing deodorants market - which has grown from virtually nothing in the space of a few short years - where the Pond brand, usually associated with skin care, has become one of the leading deodorant brands.

Unique variants in branding

Doskow pointed to the fact that this is just one of many unique variants on the personal care branding landscape.

“Brands are being adapted to the Indian market to meet specific consumer demands and characteristics they can identify with,”​ Doskow said.

Associated Chambers of Commerce and Industry of India (ASSOCHAM) predicts that the cosmetics market will grow from $950m to $1.4bn in the next 2-3 years, which would bring India's per capita expenditure up to that of China's.

Likewise, India has been cited as one of the most important emerging markets in the Asian region, with a 12.6 per cent increase in personal care sales revenue in 2006, according to a report from market research company the Kline Group.

Related topics Market Trends

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