25 October 2023
Could Southeast Asia and India be the new Eldorados for global luxury beauty players? At least that’s what international consultancy Kearney and Luxasia, a distributor of premium beauty products in Asia-Pacific, says in a study titled “Unlocking hypergrowth in Asia’s luxury beauty landscape.”
According to the report, the prestige beauty market in Southeast Asia and India is expected to grow at an average annual rate of 11% by 2031; The global luxury beauty market will triple by 2031, growing by 4% to 6%. Ten years.
In 2026, the value in these regions may be 7.6 billion dollars. “South East Asia and India should be on every global luxury beauty CEO’s agenda, as these markets are poised to lead the next phase of growth in the luxury beauty industry,” says Siddharth Pathak, Kearney’s consumer industries and commercial director for Asia Pacific.
While the Chinese market is recovering more slowly than expected and the supply of cosmetics brands is relatively saturated, just like in Japan and South Korea, the South Asian and Indian markets are attracting more attention than ever from local brands as well as international luxury beauty brands.
It is expected that the upper and middle classes, whose population will exceed one billion in 2026, will increasingly turn to luxury consumption. “This represents a limited but golden opportunity for luxury beauty brands to break into the present and thrive,” the study summarizes.
flock to india
Luxury brands did not wait long to turn their attention to India. Global beauty giant L’Oréal re-established its luxury division’s flagship brand, Lancôme, in the Indian market a year ago. Six years ago, Lancôme tried its hand in the Indian market, but low demand for luxury products forced it to withdraw. L’Oréal India’s goal is to have its business worth one billion euros in three to five years, with a growth rate twice that of the Indian beauty market.
Last September, Japanese cosmetics group Shiseido introduced the Nars brand to local beauty stores in India. The less luxurious but more premium The Body Shop, which will change its owner soon, is also increasing its store openings with 200 stores in the country where it has been operating since 2006. Our goal is to open nearly thirty stores every year.
Global players are also investing in local brands. For example, in May 2022, Sugar Cosmetics, a young Indian beauty brand, closed a $50 million financing round with a group of investors, including the Asian branch of French-American investment fund L. Catterton, co-founded by LVMH. In July 2022, American group Estée Lauder, which also had disappointing results in China, joined forces with Indian company Nykaa, which specializes in online sales of beauty products, to launch Beauty & You India, a program designed to support young people. Indian beauty brands and entrepreneurs in the industry are developing their projects.
However, India, like Southeast Asia, consists of highly diverse market ecosystems, making it a complex market.
“Luxury brands today face six major challenges in this fragmented region: partner selection amid multidimensional multifaceted retail networks, heterogeneous local product preferences, disparate marketing approaches, complex regulatory frameworks, costly and idiosyncratic supply chain environments, and information asymmetry.” study.
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