MAC & Dior Set Sights on India’s Fastest-Growing Beauty Industry, Market Set for $34 Bn by 2028

India’s beauty industry is growing faster than ever, making it the world’s fastest-growing online beauty market. With higher incomes and a rising interest in premium products, more Indians invest in beauty and personal care. 

Currently worth $28 billion, the market is expected to reach $34 billion by 2028, growing at 10-11% annually. A young population and a growing demand for high-quality beauty products drive this rapid expansion.

A Blossoming Beauty Market

India’s flourishing beauty market creates opportunities for homegrown brands and global giants. As online sales surge, e-commerce platforms like Nykaa and Amazon are experiencing rapid growth. 

With international brands expanding their presence and local companies scaling new heights, India has emerged as the fastest-growing beauty market. Everyone is eager to tap into this booming industry, from luxury icons like MAC and Dior to beloved homegrown names like Sugar and Lakme.

According to market tracker NielsenIQ, between June and November 2024, beauty e-commerce and quick commerce sales saw a remarkable 39% increase in value compared to the previous year. In contrast, physical store sales grew by just 3%, highlighting the rapid shift toward online beauty shopping. 

Despite the impressive growth, India’s per capita spending on beauty and personal care remains relatively low—$14 compared to $38 in China and $313 in the US. This indicates significant potential for expansion as more consumers invest in beauty products.

E-Commerce – The New Era of Beauty Shopping

The shift toward online beauty shopping isn’t just a passing trend—it’s a fundamental change in consumer behavior, especially among younger generations. According to market insights, as of 2024, 17% of Indian consumers buy beauty products online, up from 13% the previous year. Brazil, the second-fastest-growing online beauty market, lags at 27%.

Both global and Indian beauty brands are adapting to this shift by strengthening their digital presence. Leading e-commerce platforms such as Amazon, Myntra, Blinkit, Zepto, Nykaa, and Reliance Retail’s Tira have become the preferred shopping destinations for beauty enthusiasts.

Homegrown Brands Making Their Mark

Indian companies are also making significant strides. The Good Glamm Group, for instance, has become a major player by acquiring various beauty and personal care brands and digital media companies. Their strategy of integrating content with commerce has resonated well with consumers, contributing to the industry’s growth.

Nykaa Leads the Charge

Nykaa, a major player in India’s beauty e-commerce space, reported a 30% year-on-year growth in beauty orders during the December quarter. Impressively, 70% of orders in the top 110 cities were delivered within a day, showcasing the increasing demand for quick and convenient beauty shopping. 

Nykaa also reported a 61% increase in quarterly profits, driven by strong demand for premium beauty products. Their beauty segment, which includes high-end brands like Estée Lauder and Rihanna’s Fenty Beauty, saw a 27% revenue surge, highlighting the growing consumer preference for luxury offerings. reuters.com

Global Giants Eyeing India

Recognizing the vast potential, international beauty brands are increasingly focusing on India. Estée Lauder, for example, is set to commence local manufacturing, aiming to cater more effectively to the Indian market. This move underscores India’s emergence as a key player in the global beauty landscape.

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Key Factors Driving India’s Beauty Boom

India’s beauty market is expanding rapidly, fueled by several key factors. From the rise of e-commerce to changing consumer preferences, new-age beauty brands are thriving in an industry once dominated by a few established players.

E-Commerce is Democratizing Beauty

The rise of online shopping has removed traditional barriers to entry, allowing emerging brands to compete with industry giants. E-commerce platforms have made beauty products more accessible, enabling startups to tap into a vast consumer base without needing physical retail stores.

Gen Z’s Willingness to Experiment

Gen Z consumers are open to trying new brands and niche products, unlike previous generations. Their preference for innovation, clean beauty, and unique formulations has led to a wave of indie beauty startups challenging legacy brands.

Personalization and Technology-Driven Innovation

With increasing competition, brands focus on personalized skincare, AI-powered recommendations, and customized beauty solutions to stand out. Many companies are leveraging technology and data analytics to create products tailored to individual skin types and preferences.

Loyalty and Customer Retention Strategies

Beauty brands invest in membership programs, exclusive offers, and personalized shopping experiences to secure long-term customer loyalty. Many companies now offer rewards, subscription services, and special discounts to retain their growing customer base.

Billionaires Enter the Cosmetics Industry

India’s booming beauty market attracts the country’s biggest business houses, with major conglomerates making strategic moves into the sector. With demand soaring, industry giants are launching their beauty ventures to capture a share of this fast-growing space.

Reliance made a bold entry into the beauty market with the launch of Tira in 2023, signaling its aggressive push into the sector. Meanwhile, the Tata Group is expanding its presence through Tata Cliq Palette, an exclusive beauty platform catering to online shoppers.

Adding to the competition, Ananya Birla, daughter of billionaire Kumar Mangalam Birla, recently announced the launch of Birla Cosmetics. This new venture aims to introduce a wide range of beauty and personal care products across India, further intensifying the race among top players in the market.

Challenges and Opportunities Ahead

While the outlook is optimistic, companies must navigate challenges such as intense competition and evolving consumer preferences. Recent developments, like the market value decline of Mamaearth’s parent company due to reported losses, highlight the need for brands to stay strong and responsive to market dynamics. reuters.com

India’s beauty industry is on a dynamic upward trajectory, offering abundant opportunities for established players and emerging brands. As the market matures, consumers can look forward to diverse products tailored to their evolving tastes and preferences.

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