The value of the market should increase from a current estimate of Rs10,000 crore (US$19.3bn) to Rs 20,000 crore by 2014, according to the Chambers of Commerce and Industry of India (ASSOCHAM).
The government-backed association believes that the huge increase will be driven by improved spending power and rising awareness of social trends, backed by industry players investing heavily to market and promote cosmetic products.
But ASSOCHAM believes that expansion will not be solely down to the urban phenomenon that has traditionally driven growth, with new sales expected to be driven in rural communities, where specialized products should also drive revenues.
Indian economy should continue to grow
The Indian economy has continued to grow at double-digit rates in recent years, and ASSOCHAM believes that, despite global economic uncertainty, the economy in India will continue to grow at this kind of pace over the next few years, paving the way to continued growth in the cosmetics market.
In particular, the report highlights the importance of women in the 30-plus age group, stressing how important skin care should be over the next few years.
“They [Indian women] are willing to spend more on separate sets of creams and lotions that target problem areas. These women also are more open to buying higher-priced products,” the report states.
Survey included 6,000 Indian cosmetic consumers
ASSCHOM says it is basing its forecasts are based on a survey it conducted in the country that included 6,000 cosmetic consumers.
The survey showed that 65 percent of teenagers interviewed said their branded cosmetic consumption had increased by at least 75 percent in the last ten years, while 62 percent of young males said that their expense on cosmetics had risen by 45 percent or more.
The forecast figures were based on the survey findings for consumers’ expense on cosmetic products over the past 11 years, showing that since 2000, average monthly expense has grown five-fold, from Rs. 1,000 in 2000, to Rs. 5,000 in 2011.
Niche areas see more dramatic increases
In niche areas this rise was even more dramatic, with expense on cosmetics by teenagers rising 95 percent in the same 11 year period.
But as well as increases in volumes, the survey also reveals that Indian consumers are looking for better quality products, with 71 percent of students stressing this to be the most important criteria.
In the second part of this article, CosmeticsDesign.com will take a look at how changing spending patterns and the evolution of new niches will be the key drivers of growth for the market in the future.