homebusiness Newscompanies NewsNo takers for lipstick? Here’s how work from home is changing dynamics of cosmetics industry
No takers for lipstick? Here’s how work-from-home is changing dynamics of cosmetics industry
The work-from-home era has changed the way India works, eats, sleeps and looks. Growth rates for India's 45,000 crore beauty and cosmetics industry have tapered over the past few months. Sector experts say the industry, which was growing at 15-20 percent, is now struggling to get back to pre-COVID levels. The non-essentials space, especially in colour cosmetics, has taken the biggest heat.
The work-from-home era has changed the way India works, eats, sleeps and looks. Growth rates for India's 45,000 crore beauty and cosmetics industry have tapered over the past few months. Sector experts say the industry, which was growing at 15-20 percent, is now struggling to get back to pre-COVID levels. The non-essentials space, especially in colour cosmetics, has taken the biggest heat.
"The biggest challenge we have seen is on colour cosmetics given that everyone is staying at home and not going out. We believe that has been a temporary blip and that make up will be back as festivals are around the corner. We are still scraping through Q3 managing the topline but believe we will move into a growth trajectory in Q4," said Pankaj Sharma, Director - Consumer Division, L'Oréal India.
While the months of April and May saw an 80 percent loss of business for most players, many categories have now started recovering. Two such categories have been -- skin care and hair care.
"Hair colours being a discretionary category got impacted in the first quarter, especially in April and May. In the past few years in India, the entire penetration of hair colours has been through Rs 30 sachet packs. Given the challenges in terms of income, it is sachets that will gather more momentum & drive growth," said Sunil Kataria, CEO - India & SAARC, Godrej Consumer Products.
To tide over this slowdown in demand, companies have launched sachet packs of premium products both in the hair care and skin care range. Retailers who were forced to shut shop during the lockdown have re-adjusted inventory levels to match demand.
"We are definitely not even thinking about growth right now. Step number one is to get back to 75% of our pre-COVID sales which we expect to get back by season time - sometime Nov or Dec," said J Suresh, MD & CEO, Arvind Fashions, which runs Sephora in India.
"We have readjusted the current inventory in line with the current sales so that we adjust our future orders. We can’t do much about the inventory we are already holding & have been able to control the inventory flow," he said.
Just like for other sectors, sales in the online or e-commerce space have boomed. Most beauty brands saw sales in the online space driving growth.
"In April, we were down by about 80 percent compared to February. February mind you was also our best ever month because it’s a month that goes into Valentines Day. In May, we were down by 30% of pre-COVID levels and in June we started hitting our pre-COVID levels in terms of net revenue. July we have gone ahead of our pre-COVID levels by 15-20%," said Manish Taneja, co-founder and CEO, Purplle.com, which is an online marketplace for beauty products backed by JSW.
With the festive season around the corner, most retailers and brands have pushed new launching schedules to the last quarter of this calendar year, with the hope that the tide will turn and sales will come back!
First Published: Aug 21, 2020 4:10 PM IST
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