While relatively small compared to the country’s overall population, the Indian luxury beauty market is poised to follow the high-growth trajectory that China enjoyed over the past 15 years, finds the latest report from Kearney and Luxasia [1], building on insights arising from their inaugural whitepaper last year.
Already a billion-dollar market, the Indian luxury beauty market is expected to reach USD 1.6 billion by 2028 and quadruple to USD 4.0 billion by 2035. With an expected CAGR of 14%, India is one of the fastest-growing markets in both Asia and the world. This growth is driven by the country’s overall economic development, a burgeoning middle-class, and increasingly sophisticated luxury-conscious consumers eager to trade-up.
A market fraught with challenges
This potential has not gone unnoticed, as numerous international brands have entered India in recent years to capture early-mover advantages, win the loyalty of Indian consumers, and ride the impending growth wave.
However, highlights the report, Indian market entry is “fraught with challenges”.
Unlike other Asian countries, India’s vast geography and ethnic diversity create divergent consumer preferences across the country. “To succeed, brands must develop a range of region-specific (even city-specific) strategies rather than relying on a generic or single-market strategy.”
Additionally, brands need to navigate operational and regulatory complexities such as product registration and importation while optimizing their supply chain setups.
According to Kearney and Luxasia, three pillars must be addressed to succeed in the Indian beauty market: product-offering customisation, targeted regional marketing strategies, and omnichannel distribution optimisation through strategic partnerships.
“India’s luxury beauty market is at a pivotal moment, poised for exponential growth. There has never been a more opportune time to invest in this sector. Brands that strategically navigate its complexities will not only establish a strong foothold but also cultivate lasting relationships with a new generation of luxury consumers,” said Karan Dhall, Partner at Kearney’s Consumer Industry and Retail Practice.
“Despite the complexity and heterogeneity intrinsic to India, it is an extremely vibrant and attractive market for luxury beauty. Growth is expected to come with a sharp inflection point and not gradually over time. Brands need to be present in-market prior to these sudden spikes. It is imperative that brands play the ’long game’ and invest into an understanding of Indian consumers, as well as the dynamic omnichannel ecosystem in the market. This effort needs to start today,” added Satyaki Banerjee, Group COO, Luxasia, who is also the overall commercial leader for numerous markets including India.
