The Face Shop company spokesperons Diane Lee told the Economic Times that the India market was the most sort after international market for any expanding multinational cosmetics players right now and that the time was right for its own entry into the market.
Established in 2003 in Seoul, the business has gone from strength to strength, with international expansion given a significant injection in 2009 when it was bought up by LG Household & Healthcare, one of the biggest conglomorates in South Korea.
India has been a target market
From its one store beginnings it now has more than 2,300 stores in 29 countries, but the company has now decided to add to its international presence by expanding into India.
Lee told the publication that The Face Shop was poised to first break into the e-commerce arena in the country, and plans to break into its traditional bricks and mortar store format further down the line.
With the fast growth in the Indian economy, many Indian cosmetic and personal care consumers are tapping into their country's heritage of ayurvedic practices, which has made natural products a mainstay in many areas of life and an important part of the country’s cultural heritage.
Now that heritage is being combined with an increasing consumer spending power and a burgeoning middle class who are seeking out increasingly sophisticated natural and organic products.
Double-digit growth across many beauty categories
Indeed, such is the speed of growth in the country, that in 2015 GDP growth of 7.5% meant that India surpassed China’s 6.9% economic growth rate, with a 1.3 billion population underlining the continued potential for business expansion in this vast and still relatively underdeveloped market.
According to market research company Mintel, there will be double-digit gains across most beauty and personal care categories in the course of the next five years, pointing to opportunities across the board.
Mintel estimates that the market for cosmetics and personal care was worth an estimated $12.7bn in 2015 and will rise to $13.7bn by the end of 2016, an annual increase of almost 8.0%, with highlights for high category growth likely to be body care, colour cosmetics, facial care and shampoo and conditioners.