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Rising Demands of Cosmetics

Akanksha Soni
Akanksha Soni Jul 05 2019 - 3 min read
Rising Demands of Cosmetics
The Indian cosmetics’ market registered impressive sales, with rising purchasing power and growing fashion consciousness.

The rising awareness of beauty products, increasing the premium on personal grooming, changes in consumption patterns and lifestyles and improved purchasing power among women are expected to boost demand in the cosmetics industry. India's cosmetics and cosmeceutical market are expected to register annual growth of 25% touching USD 20 billion by 2025, according to industry experts. The country’s cosmetic sector has, in fact, emerged as one of the markets holding immense growth potential. The future outlook also seems exceptionally bright due to new product launches that are catering to consumers’ growing requirements and will fuel growth in the industry. 

Changing Factors Causing Demand

Increasing demand from the youth population, increasing adoption of western culture & lifestyle, and the increasing number of beauty salons are aiding India cosmetics’ market. Moreover, increasing per capita expenditure on personal appearance and growth in the beauty and cosmetics market are some of the other factors expected to propel the demand for the cosmetic market over the next five years. The cosmetics industry in India is also being driven by the increasing demand for herbal cosmetic products the high adoption of which has led to the growth of the segment at 15% annually. This is mainly due to the fact that people are becoming more aware of the possible side effects on skin by the constant use of chemical formulations-based cosmetics.

In terms of product type segmentation, skin care products such as anti-wrinkle creams, toners, cleansers, facial creams, etc. account for the largest market share, and form an important component of the market. The whitening creams’ market holds a unique status in the Indian subcontinent and has witnessed the highest growth rates in past few years. Due to these factors, the revenues of beauty brands like Shahnaz Hussain, Vega, Kama Ayurveda as well as international brands like Sephora, MAC etc. have been growing tremendously.

Beautified Business Plans

The best way to make it fast and big in the cosmetics industry is to opt for a franchise that already has a market presence, strong branding/advertising. And, in this beauty-conscious world, a celebrity brand ambassador will also help with attracting consumers. The initial investment on a franchise outlet in this would amount to this: 40-50 lakhs in a store model ranging 1000 sq ft; 15-20 lakhs of the initial investment would go into the product of the brand; adding 10-12 lakhs for state-of-the-art interiors; and 5-7 lakhs would go into the month-on-month operational expenditure including ACs, rent, electricity, maintenance, security and other miscellaneous expenses. A store of this size and variety would require a 5+1 employee system, with one-floor manager, one 24/7 security guard and three salespeople. The monthly revenue of a cosmetics franchise store would amount to around 15-20 lakhs, placing the breakeven of your investment between 8-12 months depending on city/location of the store, preferred tastes of the local populous, and popularity of the franchise.

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