India, a country full of beauty dreams - L'Oréal Finance: Annual Report 2018
2018 Annual Report

India, a country full of beauty dreams

With its growing middle class and young demographics, India is a strategic market for L’Oréal, at the heart of its Universalisation strategy. Amit Jain, Managing Director of L’Oréal India, reveals the market challenges and potential for development.

Amit Jain

Managing Director, L’Oréal India

A promising and thriving beauty market

India is one of the fastest growing beauty markets in the world, growing at around +10% in 2018 . Nowadays, it is full of promise and just beginning to awaken to the potential of beauty. This transformation is being driven by a rising middle class, with increasing disposable income and higher levels of aspiration. The main beauty aspiration of this population is quality: India today has one of the lowest per capita spends on beauty products. The consumers are value conscious and extremely demanding with regard to quality and experience.
These needs are covered thanks to L’Oréal’s portfolio, with its aspirational and innovative brands. The Group, which has been present in the country for 25 years has developed a deep consumer understanding. The aspirational categories in India are makeup, hair colour and premium skincare and L’Oréal has all the assets to provide Indians with these products.

Operations and Research & Innovation, the winning partnership

With its two research facilities, which have studied the specificities of Indian hair and skin, L’Oréal has developed and produced particular innovations in the two L’Oréal factories that are strategically located in the country. One of the most iconic products is Garnier Black Naturals, a hair colour cream in sachets, with a formula specifically adapted to Indian beauty needs, and a packaging especially designed for multiple retail touch points.
At the back end of the product value chain, L’Oréal has a strong supply chain network, which is able to deliver to a huge number of outlets and a network of distributors who help reach the final points of sale.
The local triptych of manufacturing, supply chain and Research & Innovation is a strong asset for L’Oréal. With the emergence of e-commerce, it is now becoming one of the key drivers of performance.

To learn more on this subject, listen to Aalok Oke, Director Operations at L’Oréal India:

Aalok Oke

Director Operations, L’Oréal India

E-commerce, the game changer

The digital and e-commerce revolution is bringing with it an awareness of global beauty brands and trends. Today, a young Indian has access to brands worldwide, bypassing the hurdles of traditional distribution. As urban youngsters are more and more connected thanks to an important mobile penetration in large and middle-sized cities, e-commerce is becoming the strategic channel of the future especially in the makeup category. It offers a whole new level of consumer recruitment opportunity. E-commerce is the No. 1 growth driver for L’Oréal India.

The makeup category is particularly dynamic in e-commerce due to L’Oréal’s commitment to creating best-in-class online consumer experience. We are changing the game when it comes to consumption with augmented reality and India is set to experience a whole new way of buying makeup online.
Moreover, India’s e-commerce potential has caught the attention of global giants like Amazon, Walmart, Alibaba and the Indian e-retailer Nykka. Today, Amazon and Flipkart cover nearly 100% of post codes in the country through an extensive, robust network of delivery partners. This has helped brands win new consumers beyond the metropolitan cities and towns. Consumers in these towns now have access to beauty products that are not available through traditional physical retail distribution. E-commerce has truly opened up new ways to gain consumers across beauty brands.

Shaamain D’souza-Fernandes, General Manager and Head of e-commerce for the Consumer Products Division in India, explains how L’Oréal has become a major actor of e-commerce in India:

Shaamain D’souza-Fernandes

General Manager and Head of e-commerce for the Consumer Products Division, L’Oréal India

The hair salon business in India

The professional haircare market was practically non-existent in India 21 years ago when L’Oréal’s Professional Products Division entered the market. Organised education did not exist, and hairdressers did not have access to professional products.
Nowadays, hairdressing is an aspirational job in India, thanks to L’Oréal’s efforts in modernising and transforming the industry. Through our exclusive Absolute Route To Hairdressing (ARTH) academy, 15 partner schools and 45 education centres all over India, L’Oréal helps people pursue a career in hairdressing. Training and education is the bedrock of the industry and L’Oréal continues to invest a lot in these key development areas, along with upgrading salons through superior products, revolutionising the consumer experience and providing hairdressers with platforms like the Indian Hairdressing Awards, to showcase their talent. L’Oréal trains more than 200,000 hairdressers every year.

To learn more about the haircare industry in India, listen to D P Sharma, Director of the Professional Products Division, L’Oréal India:

D P Sharma

Director of the Professional Products Division, L’Oréal India

  • 45,000

    L’Oréal is present in 45,000 hair salons in India

Today, the professional hairdressing industry has double-digit growth, and the L’Oréal Professional Products Division is the market leader with a market share of 56% with brands like L’Oréal Professionnel, Matrix or Kérastase.
Hair colouring is a key example of L’Oréal’s efforts in the country. India, which used to be the land of henna, has today over 45,000 salons using professional hair colourants and post colouration services.