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Monday, April 26, 2010
U.S. Eyes Growing Beauty and Cosmetics Market in India
Beauty and Cosmetics Trade Mission to India (New Delhi, Mumbai and Bangalore), November 15-19, 2010. Led by a senior Department of Commerce official, the mission will assist U.S. beauty and cosmetics companies to identify prospective representatives, distributors, partners, and end-users in the vibrant Indian market. The cosmetics/beauty industry is one of the booming retail sectors in India with very strong potential for new-to-market (NTM) U.S. companies. U.S products are perceived to be very high quality in India and are in high demand. Mission participants will have a first-hand opportunity to assess market potential in India and to meet key decision makers. Trade mission participants will have customized meeting schedules to meet with potential partners, professional end-users, major retailers and key government and regulatory officials.
The emergence of a young urban elite population with increasing disposable income in cities, including an increase in the number of working women increase looking for lifestyle-oriented and luxury products is the main driver of demand for imported cosmetics products. Indian consumers tend to look towards international brands as lifestyle enhancement products.
The total size of the Indian retail beauty and cosmetics market is currently estimated at $950 million. The overall beauty and wellness market, which includes beauty services, is $2.68 billion. The cosmetics market in India is growing at 15-20% annually, twice as fast as that of the United States and European market. Premium global brands are gaining sales as Indian consumers gain exposure to the global media and move from functional items to advanced and specialized cosmetic products. With the beauty service industry growing rapidly in India, the spa segment in India is also attracting a lot of attention. The spa industry over the last five years has shown tremendous growth, not only in the number of spas, but also in the diversity of spas and products available. The spa and body treatment segment is estimated to be approximately $772 million over the next five to eight years.
Now is the time for U.S. beauty and cosmetics firms to enter the Indian market. European competitors have already been very aggressive. U.S. products viewed as high quality but awareness levels are low for smaller U.S. brands. Even with a good growth rate, penetration of cosmetic and toiletries is very low in India. With a 15-20% growth rate in this sector, this translates into tremendous potential for U.S. companies.
Recruitment efforts for the trade mission will focus on the dynamic growth opportunity areas such as color cosmetics, fragrances (fragrance is the most popular import purchase), specialized skin care and hair care products, professional salon products, nail care products, and spa equipment and products.
Additionally, the trade mission will allow the participating U.S. companies to learn about potential regulatory changes that would require all foreign cosmetics companies to register their products before being allowed to sell (Note: Indian companies are already required to register; so far foreign companies have been exempted from this requirement). If this proposed change to the Indian Drugs and Cosmetics Act of 1940 passes, foreign companies importing products would receive certificates with three years' validity, whereas companies manufacturing in India would have certificates valid for five years. Moreover, the trade mission participants will learn about India's labeling requirements. While not especially onerous, the labeling requirements must be adhered to in order for U.S. companies to sell in India.
The goals of the Beauty and Cosmetics Trade Mission to India are to: (1) Introduce U.S. mission participants to the vibrant Indian market, especially in the three large metropolitan cities of Mumbai, New Delhi, and Bangalore, to assess business opportunities; (2) establish valuable contacts with prospective agents, distributors and retailers; and (3) meet with Government regulators to understand the policy and regulatory framework and to explain American industry experience and best practices.
Participants will visit three of the India's key metropolitan centers. The mission will have access to major countrywide markets, as well as Indian government officials and U.S. Embassy staff for regulatory and business climate briefings.
New Delhi--the capital city of India where participants can meet with government officials to learn about policies and regulations, particularly current labeling requirements and potential registration issues, which would impact all U.S. beauty/cosmetics companies.
Mumbai--the business and financial capital of India were there will be meetings with appropriate customs and government officials, industry associations, networking reception and site visits.
Bangalore--a booming city with an organized retail market and the first destination of many global consumer brands, especially luxury labels.
During the trade mission participants will receive: (A) Briefings on beauty and cosmetic markets in India; (B) one-on-one meetings tailored to each firm's interests; (C) introductions to potential agents/distributors, facility administrators, and purchasing managers through group events; (D) site visits if applicable; and (E) meetings with local business representatives and government officials, as appropriate.