L'Oréal seeks Indian expansion

11 January 2013

NEW DELHI: L'Oréal, the cosmetics giant, is hoping to expand its customer base to 150m shoppers in India by the end of the decade, a more than five-fold increase on the current level.

"India is a key contributor to L'Oréal's objective of reaching 1bn new consumers," Jean-Paul Agon, the company's chairman and chief executive, said.

The organisation, which owns brands like Maybelline and Garnier as well as its eponymous range of beauty products, has around 25m customers in the Asian nation at present.

When discussing revenues, the French multinational is seeking to generate Rs70bn in 2020 from its Indian operations, measured against a projected total of Rs15.8bn in 2012.

Per capita spending on beauty products in the country stands at roughly €3 today, compared to €12 in China and €241 in Japan, according to L'Oréal's figures.

The company established a presence in India some 18 years ago, and its goods are distributed at 750k points of sale across the fast-growing economy, with considerable room for expansion remaining.

As part of this process, it will invest Rs9.7bn in India during the period from 2011 to 2016. Approximately 30% of these resources has already been devoted to projects in the country.

One major recent source of expenditure was a new research innovation centre focusing on hair and skin products for Indian consumers, with hubs in Mumbai and Bangalore.

"This research and innovation center is a tribute to India's scientific excellence. It is designed to become a laboratory of innovation for Indian beauty and a source of inspiration for the rest of the world," said Laurent Attal, L'Oréal's executive vice president, research and innovation.

L'Oréal has a proven record when it comes to rolling out lines specifically for Indian shoppers, as demonstrated by Garnier Men and Garnier Color Naturals.

It has also created "bridge products" which help consumers combine the best of traditional beauty routines and more modern lines, like Garnier Shampoo + Oil and Maybelline Colossal Kajal.

"The R&I Center in India reflects our confidence in the great potential of the Indian market and our strong commitment to the country," said Agon. "It is in line with L'Oréal's universalisation strategy of adapting our global brands to each culture's specific needs."

Data sourced from L'Oréal/The Edge Malaysia; additional content by Warc staff