India presents an uncharted opportunity

The Indian C&T market offers opportunity for both domestic and international C&T players but brands need to be aware of the country’s diverse regional differences and infrastructure. Chris McLeod reports

India has a population of 1.2 billion, and is the ninth largest economy in the world by nominal GDP, according to a report by the International Monetary fund for 2012, facts that now show India as a dominant global presence rather than a nascent nation. The same can also be said of India’s cosmetics and toiletries market.

Although it continues to grow due to India’s position between stage two and three of the demographic transition model, with a high rate of natural increase at 1.5%, its annual figures and growth pattern are now wholly comparable with the other big players in global personal care.

A report from Euromonitor International shows that beauty and personal care continued to increase strongly in both value and volume terms with the entire health and beauty sector having a combined worth of Indian rupees INR459.2bn in 2012 with an expectation to grow at a CAGR of 20.5% between 2012 and 2017. This is driven mainly by new consumers in second tier and third tier cities who have a greater disposable income and this has been seen to translate into a greater interest in personal care and grooming. Anjali Rajagopalan, Deputy Regional Manager at Mintel, explains this correlation through the ease of access to foreign media via television and the internet. Various regulations have been implemented over the last year in an attempt to make cosmetics safer and in line with the more stringent European and FDA regulations too. The Indian import regulations came into play on 1 April 2013 as an amendment to the Indian Drugs and Cosmetic Rules 1945, which places heavy emphasis on manufacturing details, quality standards and claims substantiation. Furthermore, in June 2013, India was the first country in south Asia to ban the testing of cosmetic products on animals.

With the Indian middle class expected to increase tenfold to 583 million by 2025, according to the Indian marketing magazine Pitch, the Indian consumer market is at the threshold of becoming the fifth largest in the world, offering vast opportunities for growth. A total of 70% of households are in rural areas, according to estimates from Euromonitor. And with consumer product consumption now moving out of the cities and into more rural outlying areas, as exemplified by the last decade’s growth figures, the next stage of market development is far from stagnating.