Kearney, a leading global management consulting firm, has partnered with LUXASIA, the premier omnichannel brand-builder in the Asia Pacific, to launch a fresh whitepaper entitled India’s Significant Untapped Potential in Luxury Beauty. Building upon insights from their inaugural whitepaper last year, this report delves into the substantial growth potential, complexities, and challenges within India’s luxury beauty sector, highlighting key commercial areas crucial for market success.
Significant Market Potential
Currently valued at over a billion dollars, the Indian luxury beauty market is projected to reach USD 1.6 billion by 2028 and potentially quadruple to USD 4.0 billion by 2035. With an expected compound annual growth rate (CAGR) of 14%, India stands out as one of the fastest-growing markets globally and within Asia. This remarkable growth trajectory is primarily driven by the country’s overall economic development, a rapidly expanding middle class, and an increasingly sophisticated consumer base eager to indulge in luxury products.
While the luxury beauty segment remains relatively small compared to India’s vast population, it is on track to mirror the high-growth trajectory seen in China over the past 15 years. Therefore, it is essential for brands to establish a presence now, capturing the loyalty of Indian consumers ahead of this anticipated growth surge. Numerous international brands have already entered the Indian market in recent years, recognising the potential for early-mover advantages.
Navigating Complex Challenges
However, entering this market presents significant challenges. India is often described as a “land of many Indias,” characterised by its vast geography and rich ethnic diversity, which contribute to varying consumer preferences across the nation. For brands to succeed, they must craft region-specific—and even city-specific—strategies instead of relying on a one-size-fits-all approach. Furthermore, navigating operational and regulatory complexities, such as product registration and importation, while optimising supply chain setups is essential.
To succeed in India, brands must focus on three strategic pillars: customising product offerings, implementing targeted regional marketing strategies, and optimising omnichannel distribution through strategic partnerships. The latter is vital for unlocking value quickly, enabling brands to leverage a nationwide sales team, and effectively training and managing a dedicated network of beauty consultants across various omnichannel environments.
Expert Insights
Karan Dhall, Partner at Kearney’s Consumer Industry and Retail Practice, states, “India’s luxury beauty market is at a crucial juncture, poised for exponential growth. Now is the perfect time to invest in this sector. Brands that navigate its complexities strategically will establish a robust presence and foster lasting relationships with a new generation of luxury consumers.”
Shashank Goel, Principal at Kearney, highlights the growing consumer sophistication and strong economic climate, asserting, “The time to invest in India’s luxury beauty market is now. Success will depend on a nuanced understanding of local preferences and the ability to customise offerings for diverse regional demands. Brands that attune themselves to the preferences of Indian consumers will succeed in this ever-evolving market.
Satyaki Banerjee, Group COO of LUXASIA and overall commercial leader for several markets, including India, comments, “Despite India’s inherent complexity and diversity, it is a vibrant and attractive market for luxury beauty. Growth will likely occur in sharp inflection points rather than gradually over time. Brands must establish a presence in the market before these sudden surges. It is crucial to play the ‘long game’ and invest in understanding Indian consumers and the dynamic omnichannel ecosystem. This effort must begin today. In light of the evolving market structure and information asymmetry, collaborating with the right partners will multiply gains.”
Dr Wolfgang Baier, Group CEO of LUXASIA, affirms, “The time to enter India is now. However, due to market risks and the potential for a costly learning curve, brands require expert support to enhance their market presence. Having facilitated solid growth for numerous brands in India thus far, LUXASIA is prepared to offer its expertise and partner with international luxury beauty brands for sustained success in this promising market.”
