Walk into the swanky Palladium Mall in Mumbai or the humongous DLF Emporio Mall in New Delhi, and you may think you are shopping at London’s Bond Street or New York’s Fifth Avenue. The Indian luxury landscape is palpably experiencing strong evolutionary underswells that redefine the lead profile and how luxury players need to manoeuvre in this domain.
From maharajas to masses, Indians are made to live in the lap of luxury. It is no longer the privilege of the few born into wealth; the new-age consumers, who do not typically fit into the boardroom definition of luxury consumers, are staking claims to exclusive products, brands and services, but on their terms. There is now a huge shopper base, which has the money to splurge but wants a real value proposition. In the words of the famous Coco Chanel, ‘Luxury begins where necessity ends’.
To cite a prototype, Canada-based skincare brand, The Ordinary entered the Indian market by forging a partnership with Nykaa. With an improved quality of life, India’s personal care market saw an instant surge, where predicted growth between the 2018-2023 period was 9.7%, according to Euro Monitor International.
Large-scale development of digital and manufacturing sectors has resulted in a burgeoning demand for cosmetic products in India, which is no longer restricted to metro and mini-metro urban centres, but equally powerful in rural areas. Gen Z customers are non-inert, tentative and curious about the formulation of the products and whether it’s sustainable and environmentally benevolent. Meaningful consumption has also been shaping the beauty and personal care industry as customer focus shifts towards conscious consumption and ethical living. Individuals want to be informed about the ethical sourcing, packaging, and formulation of what they are planning to purchase while also giving weightage to social media trends, discussions, and reviews.
Owing to a ‘globalised lifestyle’, the inclination of Indian consumers towards international brands has become pertinent. Several factors have led to the drastic transformation in consumer behaviour and lifestyle: growing aspirations, growth in purchasing power and per capita income, social media influence, and lucrative ad and marketing strategies.
There are many more women who can and are willing to spend on themselves, which is a mindset shift from earlier, and there’s more money in the hands of the consumer. But predominantly, aspirations have gone up due to higher exposure to international media. Indian buyers are now truly part of the global ecosystem.
Tomorrow’s luxury consumer is probably buying Dove today. So, to make an exception in a market like India, luxury brands must sit next to popular brands like Maybelline, Lakme, and others. Beauty bloggers also introduce people to brands that influence the viewers’ minds to buy the product.
Nykaa is a gateway to try out brands and convince people to buy beauty products, including expensive luxury ones. They have five Nykaa Luxe stores in coveted shopping areas in Khan Market, Delhi and malls including VR Mall, Bengaluru and Infiniti Mall, Mumbai, which is an important part of their omnichannel strategy. These cater to Nykaa’s opulent public that’ll try out a luxury brand once in person and then buy it online repeatedly. Only the exorbitant, including Davidoff fragrances and Estee Lauder lipsticks, priced at Rs 2,500 each, are available here.
Young shoppers with disposable earnings, contemporary brands, online platforms, and influencers are shaping the new narrative of India’s thriving beauty and personal care market. Financial advisory firm Avendus Capital estimates that the beauty and personal care market will touch ₹2,800 crores by 2025.
Beauty products companies may want to quip that the market is looking safe. The merchandise for such products online has grown from ₹1,400 crores in 2016 to ₹9,100 crores in 2020. These are encouraging numbers. Sales through networked channels are expected to grow at a faster clip.
In the beauty market, many Indians turning prosperous over the last two decades has translated into consumers moving up the value chain to buy more expensive, specialised beauty regimes or even experimenting with more coloured cosmetics. Consumers are sharing images on social media more than ever—the appeal to look a certain way and buy into certain brands is growing.
CEO of Sugar Cosmetics, Vineeta Singh, points to a colossal audience in India’s smaller districts waiting to consume cosmetic brands like never before. For Sugar, smaller cities are growing at twice the pace of metros. The brand draws half its sales from non-metropolitan areas. A combination of money, education, and awareness is driving this revolution of sorts.
In small cities, people are more particular about their looks and extremely faithful to a particular brand. Beauty companies such as the French cosmetics group L’Oreal are betting that the younger, more digitally-connected consumers will trade up and spend on better brands over time. Homegrown Indian brands such as Plum, Sugar, Kay Beauty now sit alongside foreign brands such as Smashbox, Huda Beauty, Elf and several Korean beauty brands on e-commerce marketplaces.
Luxury sales in India are determined by the brand’s ability to understand the complexities of the home-market belly, and their dexterity to innovate and tweak strategies to provide affluent consumers with unique and bespoke brand experiences. The global brands are certain about being in India for the long haul.
Diors Saha correctly said that India had growth potential in 2008-09 when the whole world collapsed with the recession. India is no longer an emerging market, as we have shown beyond doubt with our sales the ability, capacity and potential that is still dormant, and we feel in the next five years, India will be a force to reckon with.
