Australian Health & Beauty to India

In an era of selfies, video calls and profile pictures driven social media, the need to look good in India is no longer confined to special occasions. In fact, both men and women are drawn into the need to look good, and the prevailing obsession with healthcare and wellness. As a result, the health & beauty industry in India is growing in scope and breadth.

Consumers are looking for innovative brands that demonstrate a strong concept and unique ingredients and consumers are influenced by the whole product (functionality, packaging, and appeal). 

Key Trends Driving India’s Beauty Industry

• A significant proportion of India’s population are young, part of the rapidly growing middle class, and fashion savvy;
• The synergy between health and beauty is partly driving a trend towards organic products in personal care: organics accounts for close to one-third of the personal care category;
•  Male grooming is amongst the fastest growing categories  with explosion in product range targeted towards men in the middle and upper income groups;
• Emergence of large eCommerce platforms which provides opportunities for Australian health and beauty companies to interact with customers directly 

The Indian Beauty Market

The Indian beauty industry is categorized into various segments that includes skin care, hair care, and oral care, fragrances, and colour cosmetics. The cosmetics industry is currently valued at US$ 6.5 billion and is expected to grow to US$ 20 billion by 2025 with a CAGR of 25%. In comparison, the global cosmetics market is growing steadily at 4.3% CAGR and will reach US$450 billion by 2025. It is expected that that by 2025 India will constitute 5% of the total global cosmetics market and become one of the top 5 global markets by revenue.

Social media & favorable demographics are playing an important role in spreading awareness about cosmetics products and developing fashion consciousness in metropolitan and tier-1 & 2 cities across India.

The Indian beauty market which is divided into 7 categories is further sub divided into 3 positioning – mass, mid-premium and premium.

Tariffs, regulations and customs

All cosmetics products imported to India need to be registered with the office of the Central Drugs Standard Control Organization (CDSCO) in the office of the Drug Controller General of India (DCGI). The DCGI’s office administers the Indian Drugs and Cosmetics Act of 1940, which governs the manufacture, sale, import, export and clinical research of drugs and cosmetics in India. For more information on the DCGI please visit www.cdsco.nic.in

The fee for registration is US$ 2000 per SKU which may include any number of variants, colour, shades or pack sizes. The duration of a registration certificate is for a period of three years from the date of its issue unless it is suspended or cancelled sooner for any reason.

India allows import of cosmetics into the country only through specified ports of entry, which includes: Chennai, Kolkata, Mumbai, and Cochin sea ports; and Delhi, Mumbai, Chennai, Kolkata, Bengaluru, and Ahmedabad airports. Importantly for exporters, India has imposed a ban on the animal testing of cosmetics, and the same provisions are also relevant for all cosmetics products imported into India.

The total customs duty for cosmetics (based on HS code: 33049990, 33041000, 33049190) is around 40.28%.

Distribution Channels

The most effective way to enter the Indian market is to work with local distributors and agents, who normally contribute not only to the sales and marketing, but most importantly to brand building activities and sustainable development of the brand in the market. These distributors to large format stores (LFS) like Shoppers Stop or multi brand outlets (MBO) like Sephora, Health & Glow etc. Over the last few months- there is a growing interest amongst large Australian brands to enter India via an exclusive brand outlet (EBO).

Another channel to consider are vertical e-commerce platforms like Nykaa, Purplle, etc. which are leading the space with a focus exclusively on beauty and wellness products. Large horizontal e-commerce companies like Amazon and Flipkart (owned by Walmart) are also bullish on this category and are keen to add more premium international brands. These online players tend to invest in the user experience of a consumer. They claim that a personalized experience for a user will increase their customer retention rate. 

Austrade in September 2019 took a buyer mission of category managers from Amazon India to Australia and reached out to several beauty and health companies for on boarding them to India. This is part of the Australia Amazon Partnership Programme (2A2P).

Mapping Customer Touch-Points

Customers are the most important node in any market. It is no different in the beauty and personal care market with brands/companies strategizing aggressively on ways to gain new customers and maintain a high repeat rate as well. India as a demographic has utilized beautification and personal care products for a long time. The customer goes through a purchase journey which starts with the customer becoming aware of the product/brand and culminating with the customer using the product and providing reviews and ratings as a promoter or detractor.

The 4 steps identified in the purchase journey are awareness, engagement, conversion and delight. To achieve awareness, brands/companies aggressively spend on marketing both online and offline. L’Oreal is a great example of this strategy. For a brand which has ~1% of its sales coming from the online channel L’Oreal has spent 20% of its marketing budget on digital marketing in FY 18-19.

How Austrade can help

Austrade has a well-resourced network across India with major offices in New Delhi, Mumbai and Chennai. Austrade is well placed to assist Australian exporters to export to India and beyond.

If you are an Australian cosmetic or personal care brand, we can assist in pulling together a market overview for you and your team, connect you with relevant importers, distributors and retailers, and prepare you to enter the Indian market. We are keen to hear from you directly.

Yaser Siddiqui is a Business Development Manager at Austrade, working with Australian companies to export food, beauty, skincare and fashion products to South Asia. As well as having an MBA in International Business, he has over 7 years of marketing and business development experience, working across several industry sectors in South Asia. When not working, you can find him creating new business and marketing content, collecting matchbox covers (yes you read it correct) or playing Peekaboo with his 19 month old.

Source:

https://redseer.com/wp-content/uploads/2017/10/118-Cosmetics-Industry-Report_Final_July2017.pdf

https://cdsco.gov.in/opencms/opencms/en/Home/