Article written by Rahul Ashok, (Senior Consultant, Datamonitor), published in Progressive Grocer, June 2011

1. M A R K E T
I N S I G H T
Derma
Matter
Specialist skincare brands are lending lustre to a
rapidly expanding category.
G
By Rahul Ashok
oing by the na-
ture and vari-
ety of products
launched in the
Indian skincare
market over the last few years,
it is apparent that a makeover
is underway. Retailers, manu-
facturers and consumers are
all playing a compelling role in
transforming the landscape of
this market.
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2. In a nation where almost
every person has some advice
per capita expenditure (PCE)
– Indians spend $1.41 every The skincare
to offer on what is good for
the skin, the dynamics of the
year on haircare, but a paltry
$0.66 on skincare. To put market is heavily
skincare market in India are
being shaped simultaneously
things in perspective, Indians’
spend on skincare is so low skewed towards
by both hand-me-down
traditional knowledge as
that the country does not
even feature in the top facial creams and
well as more contempo-
rary product concepts
50 in terms of PCE for
the product type. fairness solutions in
and formats. As such,
it is not that a desire for
Looking at the evo-
lution of the two cat- particular.
or an understanding of egories, there are some
skincare is a novel con- variations that could
cept to Indians, but that have led to this ap-
product usage has tra- parent difference in
ditionally been limited consumer spending
to few categories or se- patterns. In the case
lect occasions. Over the of haircare, the major
last few years, though, brands have invested a
the increased urge to be lot of time and money in remains in consumers’ minds. Mean- the brand communication. Consider
considered “competitive” educating consumers and while, marketers have scrambled to neutrogena’s slogan, “Get radiant
on various socio-professional building awareness across change the category proposition fairness that lasts even in the sun”, or
platforms has resulted in con- product segments. These ef- through creating more efficacy-led the name of L’Oreal White Perfect.
sumers seeking more convenient forts have been aimed towards show- claims and refining marketing strat- The penetration of fairness
and nuanced ways to address evolv- casing the efficacy of formulations, egies to alter the consumer percep- creams in India is still only around
ing skincare issues, be they dry skin, leveraging existing haircare practices, tion of creams from being meant for 25 percent, despite marketing at-
wrinkles or tanning. and, most importantly, making each special occasions to something that tempts such as creating smaller sa-
The impact of these underly- product relevant and part of consum- could potentially be a part of their chets to encourage trials, taking a
ing currents has been amply evident ers’ standard personal care regime. regular face care routine. “mass prestige” approach to brand
in the changing market landscape. In contrast, the skincare market is From playing purely on mes- positioning, lowering prices and so
Largely fuelled by facial creams, the heavily skewed towards facial creams sages about “fairness”, brands in In- on. The key message for brands here
skincare category in India – worth Rs and fairness solutions in particular. dia, thus, have evolved to talk about is that selling these products is not
37.6 mn as of 2010 – has grown at As such, mention “skincare” and products in varied terminology simply about affordability, but more
a healthy compound annual growth most consumers are likely to recall such as “whitening”, “radiance” and about creating a desire for fair skin
rate (CAGR) of 13 percent over the communications along the lines of: “glow”. These propositions have been and each additional product benefit
last five years. It is also interesting “fair skin is pivotal in getting the best combined with other claims like “sun that is communicated in the minds
to note that even small and niche opportunities in life”. Other skincare protection”, “blemish removal”, and of consumers. For this, brands need
categories, such as anti-aging prod- concerns, including dry skin and “age-masking”, but without moving to go beyond the generic category
ucts and depilatories, have registered wrinkles, are being leveraged by very away from the concept of fair skin. proposition by building the rele-
healthy double-digit growth rates. few brands in the mass media. The intention is to add layers on top vance of each benefit other than fair-
These changes mark the com- As a result, products that can of the proposition of fairness, but ness, piece by piece, to consumers’
ing of age of Indian consumers, not help address those concerns have not to do away with it entirely in skincare regimes.
only with respect to awareness of still not become a part of the average
various personal care products, but Indian consumer’s regime. Further-
also in terms of purchasing them on more, given the fact that consumers
a regular basis. Consumer spending in most parts of India use various
across constituent categories throws home remedies to treat their skin,
some light on how the perception investigating whether and how these
of grooming is evolving differently practices can be contextualised for
across the various product segments. today’s skincare needs is certainly
something that should top the “to-
Skincare vs Haircare do” list of skincare brands.
“Flawless skin” and “lustrous, Fair Enough?
long hair” epitomise the notion of
beauty among many Indians. That Fairness cream is possibly the
said, there seem to be a lot of dif- skincare segment that has attracted
ferences in solution-seeking behav- the most attention over the years, in
iour when it comes to the usage of ways both positive and controver-
packaged personal care products in sial. While debates continue on the
the two categories. This difference cultural relevance and ethicality of
becomes apparent when one looks at the category, the desire for fair skin
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3. Another area worth exploring for
companies is the fact that many skin
nications.
In the Across all the
radiance and brightening formula-
tions that have been proven effective
years
come, Indian
to
skincare categories,
in other countries do not work as
well on Indian skin types. So, Indi-
teenagers are
going to become teenagers contribute
an brands could potentially benefit increasingly likely
to a sizable 20
percent of the total
a lot from contextualising their to make small-
formulations for Indian skin budget skincare
market value.
tones, or even adapting propo- purchase decisions
sitions to the needs arising out independently, based
of climatic conditions (given on knowledge gained
that many parts of India are through magazines and
very hot and humid for a peer groups. Furthermore,
large part of the year). people in this age group
are more likely to stick to
Smells Like Teen at-home skincare solutions
Cream than visit salons. As such, not
only is there an opportunity for
With their ever-increas- packaged skincare brands targeted at
ing exposure to the con- this consumer segment, but it is also
cepts of beauty and fashion imperative that brands explore new deodorants, face washes and so on category markers that align with the
of an international standard, avenues to connect with teenagers. have quite a few brands that have male psyche in terms of product
Indian teenagers are becoming con- made inroads into formulating prod- packaging, imagery, endorsements
scious of their day-to-day grooming Pour Homme ucts to specifically suit Indian males’ (if any) and so on.
and appearance earlier in life than the skin types and skincare needs. Since most personal care catego-
previous generation. They are more Despite Shah Rukh Khan’s ap- The vital lessons learned over the ries, other than those targeted at basic
aware of the importance of main- pearance in Lux advertisements and years, which will continue to be rel- hygiene, have traditionally had a pre-
taining clean and healthy skin, and Fair and Lovely launching fairness evant as this market grows, are two- dominantly feminine image, creating
hence are willing to try new products cream for men, even as recently as fold. Firstly, creating a male-specific a variant under the umbrella brand
instead of just recreating the skincare 2005 most Indian men were not positioning for an existing personal with a “for men” tag will not always
practices that their parents followed. fully comfortable with discussing care brand in India is not only about work for the brand. The well-estab-
The increased tendency of teenag- their personal care needs or address- gaining an effective understanding of lished brand Garnier, for instance,
ers to take control of their skincare ing them proactively. Much has male personal care needs and com- engaged a celebrity with a macho
is evident from the fact that across changed since then, and categories ing up with formulation changes; image to create an effective platform
all the skincare categories, teenagers such as fairness creams, shower gels, it is also imperative to create strong for the launch of male grooming
contribute to a sizable 20 percent of
the total market value as of 2010. In
spite of this opportunity, there are
only a few brands in the market that
cater specifically to the needs of this
consumer group.
Johnson and Johnson’s (J&J’s)
Clean & Clear is the most promi-
nent player in this space, and this
firm’s journey over the years has been
something of a tight-rope walk with
respect to product positioning at
retail outlets and building the right
marketing pitch for teenagers. Aside
from working on these aspects, J&J
has also increased its product portfo-
lio under the Clean & Clear brand
with the launch of an entire range
of skincare products, using claims
specifically designed to resonate with
teenagers such as “daily care” and
“acne control”. Even with these ef-
forts, the buying habits of the aver-
age shopper are testimony to the fact
that the brand has not had sufficient
promotion through traditional me-
dia and in-store marketing commu-
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4. products in categories such as deo-
dorants and fairness creams.
their presence in the Indian market
by claiming to deliver salon-quality Anti-ageing solutions
Secondly, tangible product claims
are a safer route to adopt compared
results through home skincare prod-
ucts. Both Olay and neutrogena are (valued at over Rs
to those driven purely by sensory at-
tributes, in the case of personal care
examples of brands that have rid-
den on this wave of premiumisation, 1.1 bn as of 2010)
products targeted at Indian men. which is increasingly becoming effec-
have grown at a
CAGR of almost 25
With claims such as “up to two tones tive among the affluent, urban Indi-
fairer” and “48-hour confidence”, ans. These brands have been very suc-
percent over the last
even skincare brands are moving to- cessful in building a market for their
wards efficacy-led claims, which talk offerings, which are priced at a signifi-
five years.
about how the product benefits the cant premium over the others offered
consumer rather than highlighting a in the same or allied categories.
sensory issue such as fragrance. What has worked in favour of
In the light of the two lessons de- these companies is the fact that they
scribed above, manufacturers should first built awareness about tangible
capitalise on the fact that there has product benefits (which they had a
been a substantial increase over the very high success rate of delivering)
last few years in the use of products through advertisements and product
such as moisturisers and sun care literature, and clearly described how
items among Indian men. their products differ from the com-
petition. Furthermore, the fact that
Crème de la crème they involved celebrities helped to
a large extent in creating the right
Amid the efforts to make prod- brand perception. Building on this, salons or select modern retail chan- to come – yes, we are talking about
ucts accessible to the masses, vari- the brands chose to not only reach nels, but also made their products anti-ageing solutions. not only has it
ous brands have effectively built out to customers through exclusive available through outlets such as caught the fancy of many an average
pharmacies. Given the fact that these consumer, but the fact that it is the
brands have established the right fastest growing segment in the Indian
platform, and Indian consumers’ skin care market (valued at over Rs 1.1
tendency to spend a small premium bn as of 2010, and grown at a CAGR
on “proven efficacy”, they have the of almost 25 percent over the last five
set the right precedent in testing years), stands testimony to the immi-
the waters for mass premiumisation nent opportunity in this space.
among Indians. This is no surprise, given a whole
In categories such as body care generation of Indians who want to
and hand care, there is still a lot of ‘stay young’, and another who want
“education” required to build a need to ‘look young’. While the mantra
for such products among the major- for getting consumers on-board in
ity of consumers, but personal care the case of the former has been ‘catch
companies can take a leaf out of the them young, to keep them young’, it
book of brands such as Dr. Scholl’s has needed little convincing from the
in foot care. Dr. Scholl’s is a very part of effective brands, to establish a
well-known foot care brand in In- market for the latter.
dia – in fact, it was the first to en- Brands have lived up to the hype
ter the market – that started with a by creating solutions in a variety of
small range of products, but now has product formats, which are both easy
a huge selection of offerings to ad- to use and provide a long-lasting, ef-
dress cosmetic, epidemiological and fective cover to the signs of aging.
therapeutic needs associated with These products are being used by
feet. Although these products are of- consumers as a quick solution before
ten slightly more expensive than the probably attending a party, or even
alternatives, the company has spent as regular solution targeted at under-
a lot of time and effort in success- eye puffiness or skin firming. Going
fully building an understanding of forward, it is important for brands
and demand for foot care products to channelise the consumer interest
among Indians. that already exists in the category,
into regularised and specific usage
Fighting the Signs of occasions and not just rely on bene-
Ageing fit-led marketing claims. n
This is one skincare market seg- Rahul Ashok is a consumer markets
ment that is not ageing for some time consultant at Datamonitor.
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