MUMBAI: Growth slowdown? “What’s that,” ask colour cosmetics players. With big brands like Lakme and L’Oreal clocking double-digit growth rates, the colour cosmetics category has bucked the slowdown.
It’s a clear indicator that the lipstick index ’ exists in India. The term was coined by Leonard Lauder, former chairman of Estee Lauder, to describe the company’s increased cosmetics sales during the economic downturn of 2000. In India, while consumers are said to be delaying big ticket purchases like an automobile or a consumer durable, they find disposable income for small indulgences like a lipstick.
Lakme owner HUL’s VP (skincare and colours) Prabha Narasimhan said, “One of the key reasons why colour cosmetics is less affected by the slowdown is that consumer usage is still low. As women become more aware about brands, they are willing to upgrade. There are a host of brands offering premium products at higher prices.”
Given the growing demand for cosmetics, brands are rolling out 15-25 shades at every launch. More than a decade ago, this was restricted to a few shades at best. Further, building on another secular trend of premiumisation, Lakme has just unveiled a premium line of lipsticks in matte range, priced at around Rs 800.
“If we look at the entire spectrum of consumers, the aficionados buy 5-7 lipsticks of a given range and, with every collection, while at the other end of the spectrum, there are consumers who pick up just 1-2 lipsticks annually,” said Narasimhan.
Interestingly, L’Oreal India, which gets 35-40% of its sales from colour cosmetics, is growing in “high double digits”, said its director (consumer products division) Aseem Kaushik. “You will always find in a woman’s drawer a lipstick and a compact powder. Awareness and education about makeup, especially the ‘how to’ videos, are some of the building blocks driving the category’s growth,” said Kaushik.
Makeup is a category where fashion trends change frequently, within a year, and are driven by global markets like New York and Paris. When products tweaked to Indian tastes are launched in line with these trends, consumers lap it up. “Social media has helped spread awareness, with the more evolved consumers continuing to spend disposable incomes,” said Kaushik. Affordability — with L’Oreal India launching its Maybelline ‘creamy matt’ lipstick and foundation at Rs 299 — is said to have fuelled volumes.
Top beauty retailer Nykaa is seeing consumers spending regularly on makeup. Nykaa chief business officer Nihir Parikh said, “For us, business is great as usual. There will be no deviation from our growth path in 6-12 months. If we look at new customer acquisitions, the number of products in a consumer’s cart, which are typically associated with consumption patterns, and the growth rate has been good.”
Nykaa, which has a portfolio of over a 1,000 brands across makeup, skincare, haircare and wellness, clocked 115% growth 2018-19. “What’s driving the growth is new launches, especially in the premium segment. While our existing consumer base continues to purchase makeup products as rampantly, we are also seeing a new set of consumers entering the category. Consumers typically begin with buying a kajal or lipstick and move to purchasing concealers and foundation too,” said Parikh.
E-commerce is said to be fuelling growth in this category, with products now accessible to consumers even in small towns and parts of rural India.
(As published in https://timesofindia.indiatimes.com/ 29 Aug 2019 )