L’Oréal sets its sights on India’s beauty market

L’Oréal’s CEO has told investors that the company hopes to soon double its Indian revenues to become a €1bn business.

Why it matters

While similar in population to China, India is a distinct market for multinationals, and the challenges of engaging in the market are very different, with strategies requiring a different conception of price and packaging.

What’s going on

In comments reported by the Economic Times, Nicolas Hieronimus, CEO of L’Oréal, the French-headquartered global cosmetics firm, noted the opportunity in India but lamented the distribution challenges. This meant the company has struggled to gain traction outside the biggest and most connected cities. 

“Middle classes are rising in a major way. It’s still not as developed as we would like in terms of distribution, but it’s really accelerating and our shares are growing,” he said.

In part, this is a result of changes wrought by the pandemic, in which e-commerce has offered a big opportunity to disrupt the market share distribution – currently dominated by the FMCG giants Unilever and P&G.

Growing with the expanding middle class

L’Oreal enjoys only a small market share in India but caters to some of its wealthiest citizens who account for 50% of its sales.

While the country only accounts for around 2% of total global revenues, it sees big opportunities to grow its share of India’s expanding cosmetics market.

 “What’s interesting is to look at this upper part of the Indian middle class, which is today, let’s say 200m to 300m people, but which is set to double in the next five to 10 years,” said Alexis Perakis-Valat, president of the consumer products division, on a call with investors and analysts.

Sourced from Economic Times, Seeking Alpha