The global cosmetic industry is changing at a rapid pace. This is part of a global phenomenon as new markets emerge and with it, new contenders. Smaller firms from across the world are positioning themselves as worthy adversaries. Cosmetic manufacturers India are part of this new world order.
This could well be our moment to make or break it. As markets across the world open up and become more inclusive, Indian firms have a golden chance to capitalise, much like the pharma industry that virtually rewrote the entire global market scenario. It would not be easy, given the domination of European companies, but this is one of the best scenarios that we are looking at.
Global growth
Experts predict a robust growth with the global cosmetics market growing at a CAGR of 4.3% in the 2016-2022 period. This will take the global market at $429.8 billion by 2022. Retail sales are still doing better than online sales, though the gap is closing. The retail segment includes departmental store, brand outlets, supermarkets and chemists.
As expected women lead the sales over men, although the growth in the men segment has also been impressive. North America still leads the global market, followed by Europe. This is followed by Asia-Pacific and finally, the LAMEA region. Overall there are healthy signs of growth across the world, showing us that there is scope for all kind of businesses.
Rising disposable income: With rising income graph, disposable income is rising across the world. While this is largely consistent when it comes to economies of North America and Europe, the two leading markets, the actual change has been in emerging economies like that of India and China. This has brought about changes that has altered the entire global industry. Increasingly now, it is the developing markets that are leading the charge. Rising income has, for instance, also encouraged the local industries. As a result, we have a strong emerging cosmetic industry from the developing world.
Changing global demographics: This is one of the direct effects of the previous point, rising global income. While the developed market may still lead in numbers, these are also fast reaching saturation. Instead people from emerging markets are now emerging as big spenders. It has, of course, boosted local industry (as explained above), but it has also meant the emergence of a new demographic. These are people from emerging economies who are influenced by local factors. These buyers usually buy affordable products, but do occasionally indulge. This means that there is now pace for vitally everyone.
Move towards herbal industries: Globally and particularly, in the western world, we are also now seeing a move towards a more sustainable and environmental products. People are now looking for herbal or natural products that do not contain any toxins. Studies have shown that conventional products that contain chemicals have a long-term toxic effect on our body. This has, consequently, given rise to the demand for natural products that use raw ingredients sourced from the nature, such as herbs and plant extracts. This is a sector that is tailor-made for cosmetic manufacturers India, especially our many Ayurvedic cosmetics manufacturers. With a long traditional of herbal care, Indian firms have an advantage in manufacturing.
Change in lifestyle: The demand for natural ingredients comes with a conscious change in lifestyle and the way it effects the cosmetics industry. Many in the developed as well as developing economies are now looking for a more holistic approach towards health. Hence, natural products not only satisfy those who want to avoid toxic chemicals, these cosmetics also appeal to a rising demographic that is now looking for cosmetics that can heal and rejuvenate as well. The Indian Ayurvedic industry, the original makers of cosmeceuticals, are uniquely poised to benefit from this change in attitude.
Variable business models: Perhaps the most encoring trend comes from the growth of the cosmetic industry across the board. So, we now have more players than ever before and a really varied business model that fits different segments and budgets. For instance, cosmetic manufacturers India now include luxury brands, cottage industries, herbal and Ayurvedic centres, PCD pharma franchises and even contract cosmetics manufacturing. There is clearly something for everyone to share and thrive!
