Skin Care Industry Report

Outsource Research and Analysis

[ANALYSIS OF INDIAN
SKIN CARE MARKET]

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This sample is an abridged
Table of Content:
version of a Customized
project done for one of our I. Executive Summary
clients. To protect our
client’s interests, several II. FMCG and Personal Care Market of India
important data points,
analysis and key A. FMCG Industry
recommendations have not B. SWOT Analysis
been included in this
document. C. Indian Consumer Market
D. Growth Drivers
For more information about E. FMCG Market Segment
this sample and our other
services, please write to: F. Personal Care Segment
G. Personal care Market
info@bizequation.com
or H. Skin Care Market

Visit Our Website: I .Skin Care Market Potential
www.bizequation.com J. Profile of Customers
K. Skin Care Market Trends

III. Analysis of Skin Care Companies in Premium Segment

A. Amway
Research Team:
Tanay Roy, CFA B. VLCC Health Care Ltd
Abhijit Mitra, CFA

Disclaimer
The information, opinions, estimates and forecasts contained in this document have been arrived at or obtained from
public sources believed to be reliable and in good faith which has not been independently verified and no warranty,
express or implied, is made as to their accuracy, completeness or correctness.
written permission.

I. EXECUTIVE SUMMARY:
Indian market is one that is huge in size; it exhibits different social and cultural patterns across different
geographic segments. The market is also promising and set to grow in multiple in future.

Increasing consumer spending power has made skin care one of the rapidly growing industries in India. The
cosmetics and personal care industry has been growing at an average rate of 15-20 percent for the last few
years. The annual value of personal products business in India, including oral care, hair cares and skin cares
products, is currently estimated to be Rs 25.6 bn. Growth has come mainly from the low and medium-priced
categories, which account for 80 percent of the cosmetics market in terms of volume. Even though mass-
market products still constitute the major portion of the India cosmetics and toiletries market, increased
disposable income has led to growth in demand for premium products. The urban population in particular, with
its rising purchasing power, is the main force that drives the demand for various cosmetic products in India.
This report aims to depict Indian market for skin care product.

SCOPE OF THE REPORT:
 Understanding the market for FMCG, personal care and skincare
 Understanding the growth drivers and demand drivers of Indian market
 Understanding the available premium segment skincare product in India

APPROACHES AND METHODOLOGY
 The study takes secondary research approach to cover the scope of the report. This includes scanning
 Publicly available reports, news, blogs and trade publication. All the available data are then synthesized
and
 Analyzed to present in this report with all analytical insights.

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II. FMCG AND PERSONAL CARE MARKET OF INDIA:
Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). India‟s FMCG sector is the fourth largest sector in the economy and
1,20,000 Cr
creates employment for more than three million people in downstream activities. According to
Indian FMCG
market is one the FICCI- Technopark report, FMCG market is estimated to be worth US$25 billion (Rs. 1, 20,000
important sector Crores), including Tobacco. It has grown consistently over the last 3-4 years including last 12
and has registered
months of economic slowdown. The sector is expected to grow at a CAGR of around 12% over
a robust growth
rate. the next few years to reach a size of US$ 43 billion (Rs. 2,06,000 crores) by 2013 and US$74
billion (Rs.3,55,000 Crores) by 2018.The sizable Indian population, Consistent economic growth
and higher disposable income are key growth drivers for the industry. Exhibit-I shows key
statistics related to the industry.

SWOT ANALYSIS:
Strengths:
 Low operational costs
 Strong distribution networks in both urban and rural areas
Weaknesses:
 Lower scope of investing in technology and achieving economies of scale, especially in small sectors
 Low exports levels
Opportunities:
 Untapped rural market
 High consumer goods spending
Threats:
 Removal of import restrictions resulting in replacing of domestic brands
 Slowdown in rural demand

12000 10967 EXHIBIT‐II: FMCG Market Size 2008‐09 EXHIBIT‐I: Key Statistics of FMCG Industry
States with more than 10% pa growth FMCG Market Size US$ 25 bn (1,20,000 Cr)
10000 During The Period 2006‐07 to 2008‐09
Expected Market Size (2013 & US$ 43 and 73 bn
8000 2018) (Rs. 206000 and 355000 Cr)
5402
Rs.In Crores

Expected CAGR 12%
6000
4267 4065 3953 Historical Growth 12%-15%
4000
Retail Stores 12-13 million
2000 1053
593
Advertisement Spending US$ 2 bn
0
Delhi

Orisa

Haryana

Chhattisgarh
Gujrat

Goa
Uttaranchal

Source: Technopark, FICCI, Web source, INDICA Database

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INDINA CONSUMER MARKET:
According to a study by the McKinsey Global Institute (MGI), Indian incomes are likely to grow three-fold over
the next two decades and India will become the world's fifth largest consumer market by 2025, moving up
from its position in 2007 as the 12th largest consumer market. Exhibit-III provides a detail statistics of Indian
consumer market.

EXHIBIT‐III: Indian Consumer Market

Market Demographics Market Size( in US $ Billion)
Population( 1166
mn) 1221 1600 4.1X 1479
1400
Female 1200
191 1036
population(
178 1000
2… 725
800
Personal 600 507
3482 359
disposable 400
2720
income ($)
200
0
0 1000 2000 3000 4000
2005 2010 2015(E) 2020(E) 2025(E)
2012(E) 2008

City Wise Market Size (in US$ bn)
India Vs. China (market size and Growth)
30
30 (US$ bn)
25 21
China 709 1424 2859
20
15 7.9%
9
10 6 7
4
5
India 359 725 1479 7.3%
0
Delhi

Chennai

Hyderabd
Mumbai

Kolkata

Bangalor
e

0 1000 2000 3000 4000 5000
2005 2015(E) 2025(E)

Source: Source: Web source, INDICA Database, MGI

written permission.

GROWTH DRIVERS:
 Changing Income Patterns
 More consumption Opportunity, very low per capita consumption compared to other Asian and
 Developed countries
 Accelerating Disposable income in Urban
 Increasing discretionary spending

EXHIBIT-IV: Growth Drivers

Changing Income Pattern Low Per Capita Consumption
2.56
HouseHold (m) 181 231 Hair Care
1.11

1.32
Strivers 131 96 Colour Cosmetics
0.22
1.74
Aspirers 46 124 Oral hygiene
0.75

5.11
Affluent 3 11 Skin Care
0.55

0 100 200 300 400 500 0 1 2 3 4 5 6
2003 2013(E) China India

Source:Technopark,FICCI,MGI,
Websource,INDICA Database

FMCG MARKET SEGMENT:
Exhibit-V and VI provides a segmental breakup of FMCG industry. Food and Beverages lead the industry with
53% market share, followed by Personal Care Market. This report is aiming to cover personal care segment in
detail.
EXHIBIT-V: Segmental Break-up of FMCG Market
An increase is spending pattern has been witnessed in
Indian FMCG market. There is an upward trend in
urban as well as rural market and also an increase in 2%
20%
spending in organized retail sector. The foods
category in FMCG is gaining popularity with a swing of
15% 53%
launches by HUL, ITC, Godrej, and others. The Indian
beverage industry faces over supply in segments like 10%

coffee and tea. However, more than 50 per cent of
the market share is in unpacked or loose form. The
major players in this segment are Nestlé, HUL and Lighting Food & Beverages HouseHold Care
Tata Tea. Tobaco Personal Care

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EXHIBIT-VI: FMCG Segment, Product and Major Players

Segment Products Major Players

HUL, Nirma, Godrej consumer,
Household Care Fabric wash,household cleaners ITC P&G D b R kitt& ITC, G, Dabur,
Reckitt &Colman
Oral Care, hair care, skin care, personal Colgate‐Pamolive, HUL, Dabur,
wash, cosmetic and toiletries, Lakme, Marico, Fem Care, Emani,
Personal care
deodorants, perfumes, female hygiene P&G, Himalaya, ITC, Godrej
products, paper products Consumer Products
Staples/cereals, bakery products, snak
Food food, chocolates, ice cream, branded Parle Agro, Britania, ITC, Nestle,
food grains PEPSICO
Health beverages, soft drinks, tea, coffee
Beverages and United Breweries, Dabur, Radico,
bottled water Khaitan, PEPSICO etc.
Source: Technopark, Web source,

PERSONAL CARE SEGMENT:
EXHIBIT‐VII: Personal Care Segment in India
Indian personal care product market is estimated to
be worth $5 bn. Personal hygiene product, hair care,
skin care and color cosmetics are the key segment of 6% 1%
16%
the personal care market. Exhibit-VII shows the
46%
market share of each key segment.

Personal Care product market has grown ~5% 31%

p.a. over the last couple of year. Each of the
segments of personal care product market shows
unique trend and growth patterns For example bath
Bath & Hair Care Skin Care Colour Other
and shower patterns. , product has grown at ~5% Shower Product Cosmetics
p.a. over the last five years. In comparison, the
second largest segment of hair care products has seen a much higher growth of ~9‐10% p.a. over the same
period. The skin care market is relatively smaller and is growing at a high rate while moving away from basic
creams and moisturizers to specialized products such as anti‐wrinkle and dark circle removing creams. For
example, the anti‐ageing segment, though only 2% of the skin care market has been growing at a rate greater
than 90% p.a. over the last few years.

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PERSONAL CARE MARKET:
Exhibit –IX shows the regional breakup of personal care market in 2006. Maharashtra, Uttar Pradesh and West
Bengal are three major markets for personal care product with around 37% of market share. Exhibit-VIII
depicts the share of each region.

EXHIBIT-VIII: State Wise Personal Care Market (US$ mn)
846

900
800
581

700
600
392

376

338
500

305

305

277

276

242
400

216

215

154

144
300

122
200
100
0

Orissa
Uttar Pradesh

Gujrat

Kerala
Punjab

Other
Karnataka
Maharastra

Andhra Pradesh

Haryana
Bihar
Madhya Pradesh

Rajasthan
Tamil Nadu
West Bengal

EXHIBIT-IX: Region wise share of Personal Care Market

Maharastra
Uttar Pradesh 6.9
2.8 17.3
West Bengal 2.9
Andhra Pradesh 3.2
Tamil Nadu 4.4
Gujrat
Madhya Pradesh 4.4 11.8
Karnataka
Bihar 5.6
Rajasthan
Punjab 5.7 8.0
Haryana
6.2
Kerala 7.7
Orissa 6.2 6.9
Other

Source: icongrouponline.

written permission.

SKIN CARE MARKET:
The skin care market in India is estimated at ~US$ 800 million. Current per capita spending on skin care is
approximately US$0.55 compared to US$ 5.11 in China. Also, the skin care market in India is growing rapidly
with growth of economy, disposable income and consciousness about health and beauty. The market has
grown about 13-15% p.a. in last couple of years and have immense opportunity to grow in future. Exhibit-XI
shows Key Statistics of Indian skin care market.
EXHIBIT-X: Key Statistics of Indian Skin Care Market

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SKIN CARE MARKET POTENTIAL:
According to Euro monitor, changing consumer lifestyle, adoption of developed world cultures, desire to look
good and rapid urbanization are few causes for growing skin care awareness and market. The market is
estimated to grow about 15% p.a. to reach at US$1.19 bn by 2013. Exhibit-XII shows the major growth drivers
for Indian skin care market

EXHIBIT-XI: Skin Care Growth Drivers

Desire for
Anti‐Aging

Economic Cosmetic
Development Procedure

sTRONG
Improved
gROWTH Awareness of
Market
standard of
Product and
Living
benefit

Expansion to Media
new Channels Attention

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PROFILE OF CUSTOMER:
EXHIBIT-X: Female and Male both access beauty services in all cities
FEMALE MALE

100% 100%

80% 83% 100% 100% 50%
80%
100% 100%
60% 60%
67% 100% 100%
83% 100%
40%
100% 40%
20% 100% 100%
83% 20% 67%
50%
0% 17%
0%
Delhi Bangalore Mumbai Kolkata
Delhi Bangalore Mumbai Kolkata
Employed Students Housewives
Employed Students

EXHIBIT: XI: Customer profile age distribution & Income Distribution
MALE FEMALE

100% 17% 100%
50% 50% 90% 83% 67% 50%
100% 100%
80% 83% 80%
50% 100% 83%
70% 100% 100%
60% 100% 60% 100%
100% 100% 50% 100%
100% 100%
40% 100%
100% 40% 100%
30%
100% 100%
20% 100% 20% 100% 100%
100%
100% 10% 100%
17% 33% 33% 33% 50%
0% 0%
Delhi Bangalore Mumbai Kolkata Delhi Bangalore Mumbai Kolkata
More Than 40 years 30-40 years 25-30 years More Than 40 years 30-40 years 25-30 years
20-25 years Less than 20 years 20-25 years Less than 20 years

MALE FEMALE

100% 100%
33% 33% 33% 50%
80% 80% 83%
100% 100% 100%
100% 100% 100%
60% 60% 100%

40% 40%

100% 100% 100% 100% 100% 100%
20% 20% 100% 100%

0% 0%
Delhi Bangalore Mumbai Kolkata Delhi Bangalore Mumbai Kolkata
Lower middle class Middle class Upper middle class Upper class Lower middle class Middle class Upper middle class Upper class

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SKIN CARE MARKET TRENDS:
EXHIBIT-XII: Market Trends

Strong
Desire for
fair Skin

Men’s Skin
Anti ‐agers Cosmetic
care
Skin Procedure

Care

Natural &
Skin Care
ethical
Application
Products

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EXHIBIT-XIII: Skin Care Trends & Drvers

Trends Drivers Next Development
Strong desire  Fairer equals to upper class Stressful  Whitening will extend beyond the face
for fair skin: lifestyle  Skin whitening for men
 Busy lifestyle resulting in less  More stringent regulations on skin
sleeping time whitening products
 Stress hormone sends the skin‟s oil  Critics on skin whitening products
glands into overdrive  Anti-agers plus whitening products
Anti‐agers:  Ageing population  Target young consumers: Prevention
 Accelerated ageing better than cure
 Rising pursuit of agelessness  Super-premium: From global to local
 brands
 Mass brands developments
 Cosmeceuticals: Collaboration between
cosmetics and pharmaceutical company
 New technology and ingredient
 More regulated industry to ensure the safety
of cosmeceuticals
 Facing strong competition from
 aesthetic beauty service industry
Skin care  Increased consumer knowledge on  Change of Preferences: Usual Routine:
application: skin care application: TV beauty Cleanser->Toner->Moisturizer. New Routine:
programs educates consumers on Cleansing Liquid Liquid-> Cleanser-> Lotion->
different products‟ benefits products AC Essence->Mask->Emulsion-> Effector->
 Technology advancement: White Essence Cream.
 Skin care evolution thanks to  Development of more powerful products
technology and research  Consumers may “outsource”
 Beauty web blogs to allow consumers  personal care and pay for spas and
to exchange ideas treatment
Men‟s Skin Care  Workplace: Pressure from  Stronger growth than skin care
competition in workplace led to the  Moving away from 3 basic cleaning steps
emergence of metro sexual man  New technology: Focusing on
 Greater acceptance in developing  convenience
nations: Move to more „advanced‟
products

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III. ANALYSIS OF SKIN CARE COMPANIES IN PREMIUM SEGMENT
Amway:
About The Company:
Arbonne International, LLC offers skin care products based on botanical principles. The company‟s products include
body care, hair care, anti‐aging, baby care, natural balancing creams, weight loss, and nutrition products, as well as
color cosmetics for face, eyes and cheeks, and lips. It also offers products for aromatherapy and cellulite. The
company markets its products in the United States, Australia, Canada, and the United Kingdom. The company offers
its products through a network of independent consultants and online. The company is based in Irvine, California.
Arbonne International, LLC is a former subsidiary of Levlad, Inc. THE U.S.A. Arbonne (the “Company”) is a direct
selling company that operates internationally. Arbonne markets an exclusive line of high quality skin care and color
cosmetics based on natural and botanical principles. Arbonne's skin care products, based on botanical principles,
became a reality in the United States in 1980. Arbonne skin care products are available in the following categories:
antiaging skin care, radiance and hydration, detox, acne and blemish, makeup for face, eyes, and lips, aromatherapy,
healthy living, and nutrition.
Skin Care Brand Skin Care Brand
Origin Switzerland
Number of Skin Care Product 81
Botanical/ Natural Ingredients Botanical
Price Range Rs. 235-14030 : ( US$ 5- US$298.50)
Retailing Process Direct sales

VLCC Health Care Ltd:
About The Company:
VLCC is a manufacturer exporter of Herbal Cosmetics in India. It is the number one in India as far as Herbal
Cosmetics products are concerned and also marked the first step towards corporatization of the slimming, beauty and
fitness business in India. Today, the 72 centers of VLCC spread across 38 cities in India have come to be
synonymous with weight management and beauty treatments and services That VLCC is one of India most services.
recognized brands in its own right is an acknowledged fact and this is reinforced by its recent induction into the
world-wide hall of fame for brands by being awarded the international Superbrand status. It was founded by Mrs.
Vandana Luthra in 1989.
By redefining wellness, VLCC revolutionized this industry and acquired the status of India‟s largest
health and beauty brand. Today VLCC is the single largest player in the organized sector with a pan‐ India presence
of nearly 225 outlets across 75 cities, 1 in Kathmandu, 9 locations in UAE, 2 in Oman, 1 in Bahrain and 1 in Al Ain.
The VLCC Group, a „Superbrand‟, serves as an umbrella for all its other brands – VLCC Health Care Ltd., VLCC
Personal Care Ltd. and VLCC Institute of Beauty, Health and Management. VLCC‟s services provide holistic
wellness, as a service, marrying scientific research and traditional therapies

Skin Care Brand VLCC

Origin India
Number of Skin Care Product 28
Botanical/ Natural Ingredients Botanical
Price Range Rs. Rs. 515‐1880: (US$ 10.95‐US$39.95)

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