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They make money as your skin glows

02-August-2005
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They make money as your skin glows

The demand for personal grooming and beauty products is not only huge, it is galloping. To be more precise, it is driving the growth in the Rs 2,000-crore cosmetic industry. Evident from the plethora of launches in the past 12 months, the skin care category is becoming a key growth driver for FMCG companies.

While skin care products have always been there, it's the scale and range of new launches which is making waves. According to industry watchers, the large number of launches in the skin care industry recently is due to the larger phenomena of grooming. People have realised the importance of looking good and are therefore spending a lot on it, they point out.

“Our research tells us that Indian women are more loyal to their skin care products in the cosmetics category,” says William Pinckney, MD & CEO, Amway India. He is bullish over this category and optimistic about more launches in this segment cashing on this consumer insight.

“There is a general trend of growth in this industry which involves colour cosmetics also, but the growth in the skin care industry is more significant,” says Anand Halve, partner, Chlorophyll.

The action started last year - to be precise in June '04 - when HLL stormed in with its launch of Fair & Lovely Perfect Radiance range for the premium skin care segment. It leveraged the existing brand equity of their Fair & Lovely fairness cream that commands over 80% share of the Rs 800-crore fairness cream market.

Dabur too followed suit with the launch of Dabur Vatika fairness pack. In recent months, CavinKare launched 'Natural Fairever' fairness cream while Ozone Ayuvedics came out with four new product launches in the segment.

In February this year, Amway launched the 'Attitude' range of skincare products which includes cleansers, toners, moisturisers, face wash and sunscreen lotions.

The premium products are here to stay but what will drive top line for players will be the low priced products in this category. In other words, women in the Sec B &C categories and middle class young girls in their early 20s who are in college or have just started working will be on the hit list.

“Skin category as a whole is quite amenable to small packs as a person who wants to do a face pack once a week doesn't have to necessarily go for a very large pack,” says S Raghunandan, VP, sales, Dabur India.

So, even before you start realising, the skin care category might start looking like a clone of the shampoo market in India - 70% of industry sales there are driven by low priced sachets and smaller packs. Obviously, the Rs 1,350 crore-skin care market is a big market and will develop its own unique power price points soon. For example, CavinKare's new launch 'Natural Fairever' is available at Rs 5, Rs 28, Rs 50 and Rs 70 price points. “We have introduced the Rs 10 price point in this category,” says Mr P S Sandhu, vice-president, Ozone Ayurvedics, expecting to touch a base of 4.5-lakh consumers, driven by the mass products.

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