In addition revenue growth is experiencing a slowdown, going from 12.9 percent at the end of 2012 to just 2.9 percent in June 2013.
Sales of the Fair and Lovely brand of lighteners, the biggest product range with over 57 per cent of the overall market share, dipped by 4.2 per cent, while its male counterpart Fair and Handsome dropped by 14 per cent.
The fairness cream and lotion industry as a whole is estimated to be worth Rs 2,940-crore (USD$4.7bn), with many Indians using the products on a daily basis.
Against the markets
The drop in skin whitening products comes at a time when creams and skincare as a whole are continuing to grow, with skin creams increasing in sales by 9 per cent and value by 2 per cent.
In a conference call with analysts, Nitin Paranjpe, MD and CEO of HUL, the biggest manufacturer in the marketplace, said:"The [HUL] skin care story is a story of two parts. Ponds, Lakme and Dove have continued to do well. But the overall growth in skincare, indeed the overall growth in personal products, has been muted by Fair & Lovely."
However, he rejected the suggestion that Indian consumers were becoming more “mature” or opposed to skin lightening.
A glowing report
According to marketing firm Euromonitor, there was a slight decline in the number of skin whitening moisturizers sold in India relative to those which did not include whitening products, from 84.8 per cent to 83.7 per cent, from 2008-2011.
However, statistics also show an increase in retail value of lightening face masks and moisturizers, and a large increase for anti-ageing products from 1 percent to 2.8 percent.
A 2012 Euromonitor report also highlights trends boosting the size of the market such as the growing number of male users, increased use of skin whitening moisturizers and the strengthening power of skin lightening products.
The organization also noted that while the overall skincare market continued to increase in size, annual growth shrank from USD$24.6m in 2010-11 to USD $21.5m in 2011-12.