The Indian beauty industry has been thriving for the past few years and has witnessed enormous innovations. Countless homegrown brands have been created, and numerous international beauty brands have made their way to India, given the rising demand for quality products as well as the digital revolution driving digital purchases, making the brands more accessible to consumers.

Additionally, the pandemic gave impetus to online beauty retail, forcing traditional offline beauty players to take the D2C route. Just two years ago, online beauty retail was still in a nascent stage in India, and unlike many other types of retail, online purchasing of new products had not caught on in the beauty business. Today, the scenario is entirely different. Online beauty retail is witnessing exemplary growth across geographies through both – e-commerce platforms and brand-owned digital channels.

Today, the Indian beauty and personal care (BPC) market is the 8th largest in the world with a total valuation of $15 Bn and is growing at ~10%, as per a Euromonitor International Study.

According to this study, this market is further expected to double by 2030, and the major contributors to this growth are anticipated to be skincare and cosmetics.

With the world getting back to normal post the pandemic, offline purchases are on the rise. However, online beauty retail will still continue to drive maximum purchases. As per a recent global report by Accenture, beauty and personal care are predicted to gain ground on e-commerce and capture over 40% of global digital spending on average in key markets by 2025.

The future of online beauty retail is certainly bright, and some of the critical factors that will continue contributing to this growth will be:

Driving Content to Commerce:

While social commerce has still not established a firm footing in the Indian market compared to western countries, content-to-commerce has proven to be an effective mechanism for brands to drive product awareness and lead to purchases.

With a plethora of options available across categories and new ones launching on a daily basis, the beauty and skincare space can become overwhelming. Hence, consumers often require assistance navigating a fragmented and wide assortment in both beauty and personal care. This is where the brands can step in and bridge the gap by simplifying purchase decisions through personalised, inspirational and educational transmedia content. While some of the more prominent players in the beauty sector in India are leveraging content for commerce, brands of varied sizes and reach can also benefit from it to connect better with their consumers. Massy brands can also dabble into content created in regional languages to resonate better with audiences from specific regions. For instance, a popular Indian personal care brand recently launched TVC and digital campaigns in the east by roping in a popular regional actress to establish a Native connection with consumers in that market while also running a National campaign with a mainstream Bollywood actress. This approach helped the brand gain a stronger footing in the eastern market of India, leading to a considerable increase in sales.

Technological Advancements:

COVID-19 highly impacted consumer preferences and also accelerated the ongoing shift to digitalisation. While beauty giants in the west adapted to new-age technologies such as Artificial Intelligence (AI) and Augmented Reality (AR) even before the onset of the pandemic, Indian beauty brands are now getting into this space and offering personalised offerings on their website and mobile applications. From AR/ VR to the incorporation of AI into skincare and 3-D printing, the Indian beauty industry will continue witnessing revolutionisation at an accelerating rate. Some of the trends that will drive consumer purchases in the online beauty retail space will be: Automatic Hair Analysis for personalised haircare insights, Virtual Try-on of make-up using AI, helping consumers decide on shades that suit their complexion, customised facial serums and hair care products targeted toward an individual’s skin and hair concerns to name a few.

Quick Commerce for Beauty:

On-demand delivery mobile applications boomed during COVID-19 for grocery and daily needs products. These apps operate out of ‘dark stores’, which are warehouses housing products exclusively for online delivery services. The rise in such applications across top Tier 1 cities in India led to a new habit creation amongst consumers for the need for quick availability of products within 20-30 minutes, driving more impulsive purchases. While quick commerce platforms have recently gained traction and are pacing rapidly to cater to segments such as groceries and fresh and frozen foods, they are also widening their scope to the online beauty retail industry.   Quick commerce will provide beauty brands with a new value proposition, which can set them apart from their competitors. Customers needing immediate delivery may be willing to try new products, and as consumer expectations grow, quick commerce can help online beauty retailers meet and exceed them. This allows retailers to increase conversion rates and will eventually foster brand loyalty.

Integrating Offline with Online:

Online and offline integration has become an expected part of the shopping experience and now needs to become so seamlessly intra-connected that they become one. Exposure to new technologies and innovative social media campaigns has become integral to everyday Indian consumers’ lives. Hence, physical beauty and cosmetics stores will need to adopt these technologies and integrate them with the brand’s online channels to create a brand monopoly. However, merely using the latest technology will not be enough; the content strategy will need to be smartly developed and be led and communicated by key opinion leaders to achieve the most significant impact and stand out from the clutter.



Views expressed above are the author’s own.



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