Beauty still a nascent segment in India; massive opportunity here: L'Oreal India head

A: So stating the obvious, there was a boom on e-commerce and depending on what survey you are looking at, there were somewhere between 20 and 28 percent first time buyers for our beauty categories online. Things like e-consultation, e-diagnosis went up 30 percent. Very importantly, what this led to was what we like to call the low touch economy. When consumers can’t go out to the shops, touch and feel the products, our investment in beauty tech at L'Oréal came to the fore. We were in a position, along with a lot of our colleagues in the industry, to give the consumers the option of virtual try ons. So consumers from the safety and comfort of their couches could suddenly start accessing their brands at home, and thanks to applications like ModiFace, which we got integrated with a lot of our partners, consumers can actually try on various colours, makeup from the security of their homes. We have something called L'Oreal Skin Genius, which allows you to actually scan your face and artificial intelligence actually suggests a skincare regimen. Now, this is not the future, this is stuff which has started happening. So one trend in digitization was virtual try on. The second bit, as the pandemic started lifting a bit, was the emergence of the whole purchase online and try online or the other way round. So the RoPo or Research Online, Purchase Online or vice versa, which is the omni-channel consumers – this really led to the consumer being spoilt for choice, as they had extra time at home and they started experimenting a lot. So that really drove the proliferation of brands and we can see the emergence of some online-only beauty brands.

A: In a country like India where beauty is still a very nascent category, penetration still remains the single biggest opportunity. So unlike most of the sophisticated Western economies, I believe there is going to be growth both online, as well as traditional general trade, though, we do believe that online will become a bigger and bigger chunk of the incremental consumers being recruited into the categories. But there is space for both. India has got among the lowest per capita beauty consumption, it is in the region of 3 euros compared to a China which is about 8x of that, Thailand which is 5x of that. So we have such a long way to go. I won't park any favorites in terms of it is just going to be online-only. Online will drive great consumer experience, the other piece which I was talking about, which is the experience seeking consumer. However, general trade will remain very big for the Indian beauty industry.

A: First, advertising spends are not necessarily a surrogate about the size of a business. It depends on where you choose to deploy your communication. So we at L'Oréal, and as you talked about our global results, and we very clearly said, we have placed a very big bet on digital and e-commerce. We have seen a big shift of our advertising spends away from television, into digital and that is led exactly by the consumer behavior I just spoke about. Consumers are spending more and more time on the smaller screen. We know that for Instagram, Facebook, India is now among the largest markets in the world, as is the case for Google and YouTube. So yes, there is a much bigger chunk of our messaging, which is now happening digitally. And let me explain why. That gives us the luxury of completely sharpshooting the right cohorts, as they are called right now. So the ability to customize messaging, the same messaging of a Garnier Naturals, now driven by AI, could have 100 different avatars depending on which cohort it is being served up to. So that is one advantage of digital, which is the consumer gets the messaging, depending on whatever are their needs as opposed to linear advertising over television.

A: I will call it pretty much even stevens.

A: NYX represents a very unique experiment for us here in India, where we decided to go online-only. There are very interesting learnings, and as you can see, the brand is up there and growing well for us. In terms of the use of influencers, we at L'Oréal, our standards are way beyond the ASCII guidelines. So we already self-regulated ourselves in terms of the use of influencers. There are very clear global guidelines in terms of what and where they can message L'Oréal brands, or endorse them. So very clearly, we are setting the bar way above the ASCII guidelines. So they haven't really touched us very much.

A: These tech giants, obviously, are global partners for us. There is the inevitable push and pull of attribution of sales to advertising and that is of course the holy grail of digital advertising. I would like to think that over the last couple of years, we made a lot of progress with the tech giants. They have been very collaborative, in helping us drive attribution of revenue, and of course sharing relevant data within the guidelines of the statutes in India. And let's face it, it is driven also by a convergence of interests. Clearly, the giants are driving advertising in the face of television and the more they share, the better is the business case for them and for consumer brands like ours, to move digital.

A: In fact, this is an interesting new trend which has been catalyzed by the pandemic, where we see that the Indian consumer right now is searching for their style of beauty. No longer do you have these very mass products, which kind of meet the needs of the janta. Given the proliferation of digital and access to imagery on global platforms, consumers are demanding personalization more than ever. So let me give you a small example. A year back, we launched a foundation called “Fit Me”, which is available in 18 different shades, which meets pretty much most of the Indian skin types.

Initially, we kind of thought this would be restricted to a few fast movers, but guess what, consumers are voting with their foundations, and they are happy to now get foundations which match their complexions. The kind of demand which we are receiving for something like this, is amazing. Similarly, consumers seeking products which are customized for their skin types and being who they are, as opposed to being somebody else who's portrayed out there in advertising is a big new trend.

A: I would like to think it has taken root for us here in India and that makes us feel really glad that we were ahead of the trend. For example, L'Oréal Paris, is turning 50 with its iconic line “Because You Are Worth It”. So our complete philosophy is about each and every woman finding her style of beauty, her idea of beauty, as opposed to being measured through the male gaze, and being herself and building her self confidence. So maybe we were slightly ahead of the times in India. But now over the last year or so, we are seeing an upsurge of this sort of consumer behaviour, which leads to a lot of affinity with our brand.

A: In all fairness, fairness is a manifest need in India. It is not going to go away in a hurry. The issue is not the fairness cream, the issue is how it was portrayed, to make out one complexion is better than the other. So of course, fairness and lightening is going to be around for a long time, but it is not necessarily better than the next complexion. That is the core issue. Having said that, to answer your question, I gave you the example of “Fit Me”, which comes in a variety of shades from light to dark, and in response to the demand from small town India, we had to now launch a “Fit Me” mini, which can travel to a small town in India and we are delighted to let you know, that we are selling across all kinds of complexion types and skin tones, as opposed to fairness. So, I think is a very important trend which we are seeing the beginning of.

A: The third thing that I talked about was consumers wanting an enriching experience. So we ran some research midway through the pandemic, and obviously, consumers were at home, they had time, which was saved from all the commuting. So at the beginning of the end of the work day, they were looking for their fitness regimen or the beauty regime. 71 percent consumers expressed they wanted enriching experiences which uplift their lifestyle. So what does that mean? It means that consumers, for example, we were talking about them being comfortable about who they are -- natural hair has come back big. Now people are comfortable with their curls. No longer is straight, flattened hair, necessarily the archetype of beauty.

A: Great question. India is an incredible market right now and penetration of the hair color category is barely in its 20s. So, there is a long way to go. But just to finish the bit about seeking experiences - consumers are now obsessive about hygiene in their products. They are looking for light makeup. So in response to this whole bit about needing to wear the mask, you look for light makeup. So you see an upsurge in skin serums as opposed to the traditional heavy duty creams. You are looking at an upsurge for cosmetics which allow your skin to breathe. There is a lot of demand for non-transferable makeup which is coming in. So we see a boom in our long stay lipsticks like “Creamy Matte” from Maybelline. Most importantly, in terms of experiences, the Indian consumers have become really demanding on natural, which was of course an emerging trend for many years, linked with science and efficacy. So it is incredible the kind of things which you are seeing there. There is turmeric with vitamin C, or there is rosewater with Hyaluronic acid. There are incredible combinations which are being brewed to meet this emerging experience seeking Indian consumer.

A: L'Oréal globally has four businesses which is the luxury business, active cosmetics, professional and the mass consumer business. India right now is represented by three of the divisions and we are actively looking at getting in active cosmetics in face of an upsurge of consumer concern around hygiene and wellness. We see a lot of gray market imports which have come in, in the face of consumer demand over the last year. So clearly the consumer is guiding us and we are actively looking at getting some of our iconic global brands like Vichy and La Roche-Posay and CeraVe. We are in the process of evaluating them right now.

A: Early days as yet. Like I said, very transparently, we are in the process of evaluating it with consumers and the consumer will tell us if the time is right.

A: I am stating the obvious when I say stay focused on the consumer and your customer, regardless of whatever the diversions outside. So, through this pandemic, we stayed focused on the fact that the consumer still is looking for our brands, and we evolved massively using the beauty tech platforms which we are building.

So essentially, we reinvented the way we are going to our salons, 40,000 partners, we built up a complete e-way of reaching our salons 200,000 hairdressers through beauty tech, and they served our consumers through social commerce and various other evolving ways of e-commerce. So my one message is through these troubled times, stay focused on your consumer and their needs, and then the right solutions tend to emerge.