Indian Market HOW PROMISING IS THEINDIAN MARKET FOR BEAUTY AND WELLNESS India is a rapidly growing economy. The middle class is becoming affluentday by day. With the increase in disposable income, India is attractingbusiness Investors and marketers. This applies to the segment of Beauty andWellness too.
Statistics show that India will be a more promising market than theUS (which is the largest market in the world currently) and also the Europe. The beauty and services industry of India has seen exponential growthlast couple of year. The market players have been seeing highly visiblemotivation among the consumers towards concept of grooming and beauty. Theonline segment of the beauty and wellness Industry which is a new entrant tothe beauty and wellness industry has well integrated itself. Consumers are readyto spend time and money to pamper themselves in India.The Indian beauty Industry is growing much rapidly, at a growth rate of15 to 18 % which is twice as much as US and Europe. The reason behind such atremendous growth is the changing lifestyle and fast paced globalization alongwith the growing need for collective identity among the Indian women.
TO satisfy this consumer base Innovation is also a key factor, thesignificant point has been the growth of E-commerce. Successful retailers arealways one step ahead of time. They are using online channels along with Brickand Mortar models to capture the Indian Market.
The rising affluence of the expanding middle class due to fast development inTechnology and consumption patterns is the driver for this. The new marketentrants are focusing on expanding to Tier II and Tier III cities as thesemarkets provide similar potential as their metro counterparts. There is such atremendous growth in India that there are service providers who have alsostarted exploring new venues for rejuvenation like airports and hotels. Thesespas offer 15 or 30-minute dry foot massage, shoulder and back massage, etc.
This changes are very new to the conservative Indian society which earlierrelied majorly on Home-made remedies and products. Graph 1.1:Market size of beauty and wellness Industry Thisstatistic depicts the market size of the beauty and wellness industry in Indiafrom 2012 to 2017, by category.
In 2015, the Indian counter sale of beautyproducts amounted to about 27.6 billion Indian Rupees. Graph1.
2: Revenue ofcosmetics and personal care marketRevenuein the Cosmetics and Personal Care market amounts to US$5,912m in 2017. Themarket is expected to grow annually by 11.1 % (CAGR 2017-2021). Keeping all these factors in mind our team has chosen the Indian Marketfor expansion of Treat well.
INDUSTRYLIFE CYCLE: The Industry is in growth stage inIndia. The possible reasons are as follows:1. Decreasing inrural population rapidly.2.
Huge scope forproduct differentiation and superior services3. No or less marketpenetration for the segment Fig1.1: Industry life cycle CURRENT MARKETSCENARIO FOR INTERNATIONAL PLAYERS The beauty services and spa industry of India has been witnessingincreased number of international players. The market which was earlier womencentric has started concentrating on male grooming and is coming up with largenumbers of unisex salons. Existing players in the market are adoptingfranchisee route for expansion. The growth showcased by the industry has alsocaught the interest of private-equity and venture-capital investors who arefunding expansion plans of businesses in the segment.
The beauty salon and spa industry like any other industry faces certainchallenges. Some of these challenges that are plaguing growth potential arelack of skilled manpower, organized training institutes, increased operationalcosts, etc. These challenges have been discussed in detail in the report andanalyst recommendations have also been included.The report gives an in-depth analysis of the Indian beauty salon and spaindustry. It also assesses the key opportunities in the industry and analyzesthe external macroeconomic condition for effective working of business by usingPESTEL analysis. PESTEL ANALYSIS: POLITICAL: Indian Government passed the bill for the Goods and Services Tax (GST)and was put into effect from July 1, 2017. The GST at 18% holds at different for the different verticals for thebeauty and wellness Industry. Even though this is a single based tax system,the service sector of this Industry like the salons will see a negative impactwhen compared to the service tax which was 15% previously.
The Department of Industrial policy and Promotion has now agreed uponSingle Brand Retail, this will help companies to improve their ownership,broaden brand awareness and drive future growth. India’s single brand retailingis valued at approximately $7bn and is expected to reach at $20-25 bn over thenext 5 years. ECONOMIC: The Average spending capacity of women in the family has considerablyincreased (2000-3000 INR per month). With the progress of time,health and wellness as a concept has taken up a multi-dimensional definition, encompassingthe individual’s desire for social acceptance, exclusivity and collectivewelfare. Chieflyinfluenced by changes in society and in the lifestyles of individuals, thischange has also been accelerated by extraneous factors like globalization and agreater awareness of the need for wellness among individuals. SOCIAL FACTORS: The important aspects inthis category for a new company entering a multi ethnic society like India willbe the effect of the company on the society and how do they deal with it.Keeping this in mind the following factors are being narrowed down.
Thethree major social factors for Treat well are1. rising affluence2. the country’s continuing and unique pattern ofurbanization3. fundamental shifts in family structures. RisingAffluence Interms of spending, the two top consumer categories—elite and affluent—willbecome the largest combined segment by 2025, accounting for 40% of consumptioncompared with 27% in 2016. This is very advantageous for the company as theseare the target consumers majorly. Thecountry’s continuing and unique pattern of urbanization About40% of India’s population will be living in urban areas by 2025, and these citydwellers will account for more than 60% of consumption. These are the group ofpeople who will easy access to the Treat well platform and can cause asignificant growth.
Fundamentalshifts in family structures Theproportion of nuclear households, which has been on the rise during the pasttwo decades, has reached 70% and is projected to increase to 74% by 2025. Decisionmakers in nuclear households—younger and more optimistic than those in jointfamilies—base their consumption decisions more on lifestyle considerations andthe need to “keep pace” TECHNOLOGICAL Indiais becoming more and more technologically driven, which is a very positiveaspect for a company like Treat well. Thenumber of online buyers in India will climb to 300 million to 350 million by2025.
With the increase in online buyers, we expect the total value of e-retailto reach $130 billion to $150 billion, or 8% to 10% of total sales, by 2025.Thereasons behind the rising adoption of e-commerce channels include the strongvalue proposition offered by online merchants, proliferating payment platforms,strengthening delivery logistics, and significant financial investment in thesector. LEGAL: Legally,it is easier to start a new business in India. The Government is more welcomingto FDI. It takes lesser time and simpler procedures to open a new business.India also has a lot of workforce employed in this sector, making it even moresimpler for new entrants. Companies incorporated in India are primarily regulated by therecently enacted New Companies Act.The New CompaniesAct, amongst other provisions, lays down the detailed provisions regardingqualification, appointment, remuneration removal, retirement of directors,conducting board and shareholders meetings, passing of resolutions, relatedparty transactions, the maintenance of books of accounts and the preparationand presentation of annual accounts REFERENCES:[ONLINE] https://www.bcg.com/publications/2017/marketing-sales-globalization-new-indian-changing-consumer.aspx[Accessed 16th November 2017] [online] https://www.statista.com/statistics/550507/indian-market-size-beauty-and-wellness-industry-by-categ [Accessed 18th November 2017] [online] https://yourstory.com/2016/04/business-india-compliance-requirements/[Accessed 16th December 2017] [online] https://www.cosmeticsdesign-asia.com/Article/2012/01/13/FDI-reform-makes-investing-in-India-easier-for-cosmetics-companies[Accessed 16th December 2017]