No Recession Impact: Beauty Business Continues to Flourish

By Sheena Shafia

When it comes to beauty care, consumers are not shying away from loosening their purse strings. The spectre of slowdown does not seem to have touched this sector, with beauty services and products said to be clocking healthy growths.

This year, the Indian arm of leading global beauty care company, L’Oreal, is expected to report a growth of 30%, in line with last year’s growth. Said Dinesh Dayal, COO, L’Oreal India: “The beauty care industry is largely unaffected by any kind of slowdown in GDP, because people do not change their daily and weekly buying habits.’’

L’Oreal India uses multiple channels to market its range of beauty care products including colour cosmetics, grooming and personal care products. The company’s turnover has reached Rs 600 crore, with its Garnier range of products penetrating the small-town market, adding to the company’s largely urban-driven growth.

Competing hair colour brands from Godrej Consumer Products Ltd (GCPL)—Color Soft and Renew —too have witnessed ‘satisfactory’ growth, according to the company’s executive director & president, HK Press. According to industry estimates, the hair colour market is said to have grown by 27% in November 2008, compared to November 2007.

“It’s, what they call, the ‘lipstick effect’. The grooming industry grows despite other sectors facing a slowdown. In these times, people indulge in spending more on their grooming habits than maybe, on a car or a durable,’’ said Press. Among other cosmetics brands, Eraser and Lissome Cosmetics have clocked growths of 52% and 36%, respectively, during April-November 2008.

Service care brands in beauty care industry are also said to be unaffected by the slowdown. Take, for instance, Kaya, a service brand from Marico. It is witnessing a double-digit growth in the current quarter vis-a-vis last year.

According to Rakesh Pandey, CEO, Kaya Ltd: “In the last two months of the current quarter, we have seen greater business coming from existing customer base. There has been about 7-8% increase in repeat customers over last year.’’ Growth for Kaya is said to be uniform across the country.

In line with its expansion plans, Kaya has opened five new outlets in the last month.