Mumbai: From selling Ultra Doux shampoos in Bihar’s Darbhanga about thirty years ago to now leading the business which has crossed a turnover of Rs 5,000 crore, company MD Aseem Kaushik has come a long way in helping L’Oreal grow its roots in India.
On the back of growing disposable incomes and a developing consumer appetite for luxury goods at the top end of the spectrum, Kaushik says the company wants to take the business growth to the next level. In an exclusive interview to TOI, he said that the task is to make L’Oreal India a 1-billion-euro business in the next 3-4 years — a target that would require the company to grow at double the pace of growth of the Indian beauty market. “We estimate that the India beauty market should grow 9-10% CAGR. The intent is to grow at double this pace,” said Kaushik, who returned to India as MD following his assignments abroad, in January.
According to him, India forms a substantial part of the emerging market pie which contributes 15% to L’Oreal globally. “Almost 25% of the contribution to the growth of L’Oreal comes from emerging markets. India, which leads this pie, is the harbinger of keeping the L’Oreal flag flying high in the emerging markets world,” he added.
In the three decades since L’Oreal set foot in the country, much has changed in the beauty and personal care market. Segments like hair colour have become bigger categories, with hair constituting almost 46% of the total weight of the $10-billion pure play beauty market. The constituents of this 46%, however, have changed over the years — with hair care now at about 20%, hair oil at 16% and hair colour at 10%. Skin, at 30%, continues to remain relevant and big, while hygiene is at 7% and fragrance at 2%. What has expanded significantly is makeup, which forms close to 15% of the market.
Yet, there is still a huge headroom for growth. Beauty consumption in India is $7.5 per person, which is very low compared to what a person in Indonesia (around $24) or China (close to $50) would spend.
“If you look at the consumer profile in India in general, there are close to 229 million consumers earning more than $20 a day. We have almost half of these consumers in terms of our penetration and acquisition. Online, too, has been a big breakthrough for us. Among the 180 million consumers who shop online, 47 million buy beauty products. The number of consumers who buy beauty products is expected to increase to 150 million odd in 5 years,” said Kaushik.
E-commerce is also pushing up the market for fragrances and premium skincare products.
“The biggest barrier to us 30 years ago was the ability to find the consumer who is affluent… that barrier is gone. For us, there are no barriers now in the country to reach the consumer,” Kaushik added.
Out of the 30 international brands L’Oreal has globally, 15 are already in India. L’Oreal India distributes its products in close to 10 million outlets across almost 3,000 cities and towns of India.
The company is now launching a new division for dermatology beauty and is also relaunching & scaling up its luxury products division.
A younger demography also means more entry-level consumers in the beauty market. Kaushik says the number of makeup products in a college kid’s bag would have actually increased.