India has long glowing heritage of beauty. Specifically Indian women have been conscious beautifying and grooming themselves. In fact the Indian cosmetic market growth is accredited to female consumers. However, it was interesting to know that men and women from rural areas are also contributing to the growing demand of cosmetics in India. According to a recent research report by RNCOS on the Indian Cosmetic Sector, Indian rural population has been increasingly shifting towards more cosmetic products. It is also anticipated that the market will surge at a CAGR of nearly 19% till 2014.
The rural folks in India have gradually become conscious about their dressing and looks. Increasing western exposure, media awareness, penetration of local brands and most importantly, rise in incomes has resulted in higher rural market spends in the cosmetic category. Even the mind set of male consumers is changing. The fast emerging men’s grooming products market has also boosted the cosmetic sector. There is a rise in demand for essential everyday items like bath and shower products, hair care, oral hygiene and skin care products. Realizing the wide potential in rural markets, the cosmetic companies have invested heavily on promoting product visibility among rural folk, which has increased the demand for bar soap, talcum powder, lipstick, tooth powder and hair oil in these areas. The Indian rural market comprises of nearly 828 Million people i.e. 70% of the overall country population. These people generally prefer unorganized market to buy a cosmetic product, which usually belongs to domestic players. Although the penetration of the cosmetic products in these areas is continuously increasing, international players are facing quite reluctant environment due to the lack of consumer confidence.
Domestic players in this sector are giving stiff competition to global players in rural markets. With increased demand and consumer awareness, these players have even upgraded their production quality and technology to retain profits in future. On the other hand, big brands have opted for various innovative strategies to lure the rural consumers. One of the most effective strategies is the sachet format which helps the consumers to try new products at cheaper costs. Companies are focusing to expand their product portfolio in various ranges of products, thus giving an array of choices to the consumers. With the objective of increasing brand recognition and reliability in these markets, companies have come up with innovative consumer engagement activities like the FAL (Fair and Lovely) Vani initiative by HUL and more.
At present, the industry size is worth Rs 10,000 crore, the study by industry body Assocham said. The figures are predicted to increase drastically with rising rural consumer spends in this category. It’s uncertain if domestic players will continue to rule the rural landscapes or global players will take away the pie. But certainly the whole phenomenon has resulted in availing high quality cosmetics products at reduced prices to the consumers.