BEAUTY AND PERSONAL CARE IN INDIA - ANALYSIS

Country Report | Jun 2020

EXECUTIVE SUMMARY Market Sizes

COVID-19 impact on beauty and personal care Sales of Beauty and Personal Care
Retail Value RSP - INR million - Current - 2005-2024
The COVID-19 pandemic in 2020 and the government’s response had a significant
impact on India’s beauty and personal care market. Lockdown, social distancing and
shielding measures in place to halt the spread of the virus had severe economic 1,040,896 Forecast
consequences leading to a curb in consumption, production, trading and the 2,000,000
decimation of travel and tourism, both inbound and outbound. Consequently, many
consumers cut back on spending where possible and prioritised purchases of products
that they viewed as essential with this behaviour set to hold firm for the remainder of
2020. At the beginning of the pandemic, panic buying led to stockpiling of some 1,500,000
products, such as facial cleansing wipes, liquid soap and bar soap, as these were
perceived as being helpful in halting the spread of the virus. These products are set to
continue benefiting, as preventive health concerns are likely to remain in place for the
remainder of 2020. 1,000,000

However, the products most likely to suffer are fragrances, especially men’s fragrances,
sales of which will be limited by reduced consumer spending power and consumers
reprioritising their spending to products that offer hygiene and cleansing benefits. 500,000
Many consumers will replace their regular beauty and personal care products with mass
alternatives such as deodorant sprays, especially as socialising outside the home is
likely to remain curtailed for some time in 2020. Many have also opted for simpler 0
grooming regimes during the crisis, as they spend more time at home. Colour cosmetics 2005 2019 2024
will similarly be affected with consumers having little use of these products during
lockdown. The cancellation of holidays abroad and more time at home will also lead to
a decline in sun care in value declines at constant 2019 prices in 2020. Price sensitivity Sales Performance of Beauty and Personal Care
will also erode value sales of most beauty and personal care categories with consumers % Y-O-Y Retail Value RSP Growth 2005-2024
seeking out lower-priced products while retailers are expected to implement more
frequent and heavier discounting in order to shift stock.
7.9% Forecast
COVID-19 country impact 20%

As of 6 May 2020, India has seen around 1,800 deaths due to COVID-19 and 53,000 cases.
India’s lockdown came into effect from 25 March 2020. All forms of movement were
restricted for consumers apart from those classified as essential workers, including 15%
medical workers, police and grocery shop owners. For other people, leaving home was
only permitted to obtain groceries and medicines. Most states closed at least some
borders between 20-23 March, with Tamil Nadu for example partially sealing its borders
from 20 March 2020. Gujarat, Maharashtra and Telangana sealed their borders from 23 10%
March. However, once the countrywide lockdown was announced on 25 March, all
states closed their borders, with only the movement of essential goods being allowed.
All non-essential shops were required to shut from 25 March 2020. The only commercial 5%
outlets allowed to remain open were grocery retailers (including traditional grocery
retailers and to an extent modern grocery retailers) and pharmacies. All schools are
closed. The decision to shut schools was initially taken by state governments on 0%
different dates across March, with Delhi being the first to close all primary schools from 2005 2019 2024
5 March. Once the countrywide lockdown directive was issued, all schools were shut
with classes taking place online if required. All businesses regarded as non-essential
were asked to shut on 25 March, including both manufacturing and distribution
operations. The only businesses allowed to remain in operation were packaged food
manufacturers and businesses that deal in essentials such as medicines, hygiene
products, etc. In terms of employment, low-income workers were hit worst, as these
are typically daily wage earners and migrant workers. Within the skilled workforce,
those able to work from home were not laid off, but there were several instances of
salary cuts.
The lockdown imposed on 25 March was extended twice, reaching 3 May 2020. From 4
May 2020, the government categorised areas as green, orange and red zones.
Businesses in the green and orange zones are now allowed to open with certain
restrictions in place, such as maintaining social distancing. In red zones however,
business operations remain heavily restricted.

Small pack sizes stimulate sales among the rural poor and urban
dwellers seeking convenience
Growth of beauty and personal care in India slowed in 2019, plagued by adverse
macroeconomic factors and dynamics including a growing unemployment rate, rising
inflation, and a slowdown in rural consumption on the back of poor farm income. While

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there continued to be a desire to experiment with different beauty and personal care
products in 2019, especially amongst young consumers, and a growing need for variety,
Sales of Beauty and Personal Care by Category
Retail Value RSP - INR million - Current - 2019 Growth Performance
consumers remained price conscious. These trends stimulated companies into
launching smaller pack sizes and “mini” variants of regular sizes to increase penetration
Baby and Child-specific Products
in rural areas and to incentivise consumers to trade up to premium products in urban 29,150.9
areas. Moreover, small pack sizes are considered to be more convenient, especially
Bath and Shower
amongst “on the go” consumers. This trend was apparent in several major beauty and 248,801.7
personal care categories including colour cosmetics, skin care and deodorants in 2019.
Colour Cosmetics
In the latter category, brands such as Engage, Axe, Set Wet and Yardley introduced 86,600.2
pocket size deodorants, offering convenience for working consumers especially in
Deodorants
urban areas. Similarly, colour cosmetics brands including Mac, Forest Essentials, Bobbi 39,663.0
Brown and Huda Beauty launched “mini” variants of lipsticks, facial cleansers and
Depilatories
mascara. 23,874.1
Fragrances
Multinationals continue to characterise the market in 2019 while both 30,877.6
they and niche brands launch new products and e-commerce sales rise Hair Care
246,280.8
While the beauty and personal care market remained fragmented featuring both large Men's Grooming
multinational and small domestic players in 2019, it was the multinational players such 118,313.9
as Hindustan Unilever, Colgate-Palmolive and L’Oréal Groupe, which maintained the Oral Care
leading positions. Hindustan Unilever has a strong portfolio of brands across major 133,717.7
categories and continued to focus on strengthening this, accelerating premiumisation Oral Care Excl Power Toothbrushe...
of its portfolio and venturing further into natural products. The company was especially 133,717.7
strong in skin care having a presence in facial care, facial cleansers and hand care and Skin Care
body care with its value packs in Pond’s, Vaseline, Lakmé Aloe and Lakmé Lip Love 146,722.3
brands performing particularly well. The Lakmé range remained a star performer thanks Sun Care
to the launch of consumer-focused innovations such as the Kareena Kapoor Khan 4,877.9
collection, which is a premium range of facial make-up. In hair care, the company Premium Beauty and Personal Care
sustained strong growth momentum with new launches and marketing activities 48,524.8
throughout the year. The performance was further boosted by robust growth in Prestige Beauty and Personal Car...
TRESemmé, Dove and Indulekha. In oral care, Closeup and Pepsodent were refreshed 48,171.1
while its Axe Ticket extension offers a pocket sized deodorant. However, in terms of its Mass Beauty and Personal Care
naturals strategy, the company offered various natural variants within its existing 784,449.5
product portfolio including Lakmé aloe vera, Lifebuoy neem and turmeric, as well as Dermocosmetics Beauty and Person...
Fair & Lovely Ayurveda. 973.0

The beauty and personal care market also witnessed a slew of new entrants across 0% 10% 20%
major categories such as skin care, fragrances, hair care, colour cosmetics and bath and BEAUTY AND PERSONAL CARE 1,040,896.2 CURRENT % CAGR % CAGR
shower. Amorepacific Group’s Etude House made its debut in India in April 2019 YEAR % 2014-2019 2019-2024
following the launch of its skin care brand Laneige, while Bollywood actress Katrina Kaif GROWTH
also launched her own colour cosmetics brand, Kay Beauty.
E-commerce also gained ground in 2019 fuelled by Nykaa.com and e-commerce players
such as Purpple.com, Amazon.in, and Myntra.com. Start-ups and niche brands also Competitive Landscape
launched websites. For instance, Bath & Body Works, which launched in July 2018, not
only expanded its presence across metro cities in 2019 but also ventured into e-
Company Shares of Beauty and Personal Care
commerce during that year.
% Share (NBO) - Retail Value RSP - 2019
Slow recovery expected in the forecast period as economic uncertainty Hindustan Unilever Ltd 21.9%
set to persist from COVID-19 Colgate-Palmolive India ... 5.4%
As a result of the COVID-19 pandemic, companies in the beauty and personal care Marico Ltd 3.8%
market are expected to find 2020 a challenging year. Demand is set to suffer from the
Godrej Consumer Products... 3.6%
impact of the lockdown while consumer confidence will be dented by ongoing
economic uncertainty. While sales growth is set to recover for some categories from Dabur India Ltd 3.5%
2021 onwards, overall market growth in value sales at constant 2019 prices is expected L'Oréal India Pvt Ltd 3.5%
to be subdued over the forecast period. Consumers are likely to reduce their spending
and limit themselves to products they perceive as essential as price sensitivity is likely Reckitt Benckiser (India... 3.1%
to characterise the market for the remainder of the forecast period. Although industry Johnson & Johnson (India... 2.8%
players and retailers are anticipated to engage in extensive discounting, sales in many
Wipro Consumer Care & Li... 2.7%
categories will be characterised by replacement purchases as consumers are likely to
limit themselves to products they use on a daily or regular basis. Gillette India Ltd 2.3%

Some beauty and personal care products are likely to register declining value growth at Patanjali Ayurved Ltd 2.2%
constant 2019 prices, such as other nail products over the forecast period, while hand Himalaya Drug Co, The 1.9%
care should benefit from increased hand washing to ward off the virus and growing
Emami Ltd 1.6%
demand to moisturise. While growth is likely to begin returning to normal levels and be
positive in 2021 for most categories, it is however, expected to be much more subdued Procter & Gamble Home Pr... 1.6%
for the remainder of the forecast period. Despite the resilience of many affordable ITC Ltd 1.5%
mass brands due to their daily usage, declining disposable incomes and ongoing
macroeconomic uncertainty are likely to lead to weaker value growth at constant 2019 Nivea India Pvt Ltd 1.4%
prices over the entire forecast period. Consumer need for pampering with small Vini Cosmetics Pvt Ltd 0.8%
luxuries and to aid relaxation during the stresses of economic uncertainty and threat
from the virus should promote skin care as well as mass bath and shower, with Bajaj Consumer Care Ltd 0.8%
consumers continuing to seek products that are natural and avoid harsh chemicals. Sun Oriflame India Pvt Ltd 0.8%
protection products are also likely to return to more normal growth rates by 2024, as
Others 34.7%
consumers are set to spend more time outside their homes, sunbathe and travel
abroad once more. The non-essential nature of fragrances, however, combined with
intensifying competition from more affordable deodorant sprays will mean this
category is likely to be particularly negatively affected by extensive discounting and
price promotions as retailers will strive to maintain sales and move stock.
The artificial lifestyle created by lockdown could create some pent-up demand for

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beauty and personal care over the forecast period. However, the COVID-19 pandemic, Brand Shares of Beauty and Personal Care
lockdown and subsequent economic uncertainty will result in a slowdown in premium % Share (LBN) - Retail Value RSP - 2019
beauty and personal care for the forecast period as a whole. Although demand is likely
to rise from 2021 onwards across some categories, ongoing economic downturn will Colgate 3.6%
result in persistent high price sensitivity among consumers. This is likely to lead to Fair & Lovely 3.6%
fewer discretionary purchases and a greater prioritisation of essential items at the
lowest available prices. The strongest selling product categories in premium beauty Lifebuoy 2.6%
and personal care are likely to be those that offer actual, discernible benefits as Santoor 2.5%
opposed to prestige, such as premium liquid/cream/gel/bar cleansers, that promote a
Dettol 2.5%
sanitary environment.
Lux 2.2%
Chart 1 Beauty and Personal Care Value Sales Growth Scenarios: 2017-2024
Dove 2.0%
Source: Euromonitor InternationalNote: C19 Pessimistic 1 represents a modelled Parachute Coconut Oil 2.0%
scenario with an estimated probability of 25-35% over a 1-year horizon, factoring in
Clinic Plus 1.8%
macro drivers including GDP, stock prices, business and consumer confidence rates
alongside infection rates, supply chain and labour supply disruption rates Patanjali 1.7%
Johnson's Baby 1.7%
Chart 2 Beauty and Personal Care Impact of Soft Drivers on Value Sales: 2016-2024
Godrej No 1 1.6%
Source: Euromonitor InternationalNote: The above chart shows the growth
Lakmé 1.4%
decomposition split by macro drivers such as GDP per capita and population alongside
soft drivers listed as having a positive (+) or negative (-) impact on the total growth rate Closeup 1.3%
Pond's 1.2%
GLOBAL MACROECONOMIC ENVIRONMENT Himalaya Herbals 1.0%

The COVID-19 pandemic has forced governments to quarantine entire countries, Pears 0.9%
disrupted global supply chains, slashed business and consumer confidence and Fogg 0.8%
affected financial markets. The effects on the global economy are already being felt,
Bajaj 0.8%
and will be substantial, but the exact magnitude will depend on the length of
COVID-19 restrictions. Others 64.6%

COVID-19 will severely impact both the supply and demand sides of the economy. At
Increasing share Decreasing share No change
the same time, monetary policy tools are almost exhausted due to the slow recovery
from the Global Financial Crisis. Interest rates have not recovered, so central banks
have to resort to Quantitative Easing programmes (QEs), but QEs have limited effect
on labour markets, consumer spending and other aspects of the real economy.
Thus, countries have to turn to fiscal stimulus. However, the response to fiscal
stimulus will be limited too as long as people are quarantined in their homes. In the
meantime, governments are helping businesses and citizens by providing
emergency loans to cover expenses and lower the spillover effects through
economies, but uncertainty surrounding the pandemic limits economic activity.

GLOBAL INDUSTRY ENVIRONMENT

The global beauty and personal care industry is largely considered recession proof,
but the unique economic, legislative and lifestyle factors surrounding consumption
in the current circumstances of the COVID-19 pandemic will pose unprecedented
challenges for the industry in 2020 and beyond.
Lockdown measures, business and school closures, mass shutdown of selective retail
outlets, and travel bans have created fewer social and travel occasions, affecting the
aesthetic side of beauty, tourist spending and overall beauty routines. Dampened
consumer sentiment and a fall in economic activity will see staple toiletries less
impacted by the shock, while discretionary spending on more premium-exposed
categories, coupled with heavy discounting and promotions, will take an inevitable
hit in varied degrees across individual markets. Sustained operations by mass market
channels, pharmacies and a diversion to e-commerce will soften the blow but not
likely offset overall sales declines.
While beauty will not come out unscathed from the expected global pandemic-
linked recession, there could be some positive prospects to explore in terms of
positioning, product formats and engagement through virtual experiences. A shift to
local brands, boost in masstige offerings and a newly redefined channel mix and
retail landscape will likely be observed in the short to medium term, with some
shifts persisting into 2021.
To better understand the impact of COVID-19 on the industry and what the crisis
could mean for near- and mid-term forecasts, please read the report, The Impact of
Coronavirus on Beauty and Personal Care (April 2020), which serves as an early guide
to forecasting the crisis, with insights on current results, lessons from impacted
areas, and scenarios for understanding the virus’ future impact.

DISCLAIMER
Forecast and scenario closing date: 11 May 2020
Report closing date: 29 June 2020
Analysis and data in this report give full consideration to the impact of COVID-19 on
consumer behaviour and market performance in 2020 and beyond. However, the
situation continues to develop rapidly, and the influence and severity of the pandemic

© Euromonitor Interna onal 2020 Page 3 of 5

are constantly evolving. For the very latest insight on COVID-19 and its impact on
industries and consumers, at both global and national level, readers can access strategic
analysis and updates on www.euromonitor.com and via the Passport system, where
new content is being added on a systematic basis.

SOURCES
Sources used during the research included the following:

Summary 1 Research Sources

Official Sources Aditya Limaye

Hygienic Res ea rch Ins titute Pvt Ltd
Na tiona l Council for Applied Economic Res ea rch
Na tiona l Informa tion Centre
Soa p &Toilertires MAnufa cturers As s ocia tion
Trade Associations All India Sma ll Sca le Cos metics Ma nufa cturers As s ocia tion
FICCI
Fra gra nces & Fla vours As s ocia tion of India
Hea lthka rt.com
India n Direct Selling As s ocia tion
India n Soa ps & Toiletries Ma kers As s ocia tion
India n Society of Cos metics & Chemis ts
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Bea uty Bus ines s News
Bloomberg
Bra nd Equity
Broker Res ea rch
Bus ines s Sta nda rd
Bus ines s Toda y
Bus ines s Wire
Ca pita l Ma rket
Cos ma de.com
Cos metique News
Da ily News & Ana lys is
Economic Times , The
Equity Ma s ter
ET Intelligence Group
Europea n Cos metic Ma rkets
Femina Ma ga zine
fibre2fa s hion.com
Fina ncia l Expres s , The
Fina ncia l Times
Forbes
GCI Ma ga zine
Ha ppi Ma ga zine
Hindu Bus ines s Line, The
Hindus ta n Times
ICN India South As ia
Ima gine
India Infoline
India Toda y
India n Expres s
India n Mirror
india ncos meticchemis ts .org
Interna tiona l Cos metique News
Live Mint
Livemint
Ma g India
ma keupa ndbea uty.com
nfibea m.com
Outlook Ma ga zine
Pitch
Premium Bea uty News
Res pons ervice
s lides ha re.net
Soa p Perfumery & Cos metics
The Hindu

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 Official Sources Aditya Limaye
Times of India
wa tblog.com

Source: Euromonitor Interna tiona l

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