“India has a long way to go in improving product quality standards”

India has a long way to go in ensuring that her citizens get only the high-quality cosmetic products, according to Murli Narayan, Proprietor, Cosmic International. An India-based export marketing company, Cosmic International has a full range of skin care, hair care, aroma-based and many other cosmetic products in its portfolio. In an interview to Cosmedic India, Murli, with his decades of experience in the global cosmetics industry, offers fresh perspectives on diverse subjects including product quality, standards, and market trends. Excerpts of the interview:

Can you tell us a little bit about your company’s business?

Cosmic International has been a leading cosmetics player serving the global market demand since its inception in the year 2002. Our product-range covers categories such as skin care creams, hand & body lotions, face & body scrubs, face masks, beauty soaps, hair oils, hair creams, natural henna powder, henna hair color, body sprays, and hot oil hair treatment creams, to name a few.

What has been the business outlook of the cosmetics industry in India, according to you?

If you observe the trends from the late 1980s onward, the cosmetics industry has experienced unbelievable growth in sales. Companies have witnessed their revenues grow beyond imagination. Both, manufacturers as well as traders have benefited from this upward trend. Some companies have even grown by nearly 1,000 percent during this period.

What explains such gigantic growth?

The key demand driver has been the rising aspirations of consumers in India. Everybody in the society has a strong desire to feel good and look good. People do not want to be perceived as like being “dead men walking”. They are quite concerned about their appearance. There has been a growing awareness about self-grooming. People also want to be seen with good-looking people. It provides them with a sense of self-esteem and respect in the eyes of others.

Cosmic International’s products

Is this demand uniformly distributed across the country?

No. There is a clear distinction between spending by the urban and rural consumers. We need to classify the market into two major categories: the rural market and the urban market.

The rural consumer’s appetite for cosmetic products has increased. However, it is still far lower than the urban consumer demand. There is a huge difference in how, what, and how much theurban and rural India spend on cosmetic products. The urban India is far ahead of the rural market in terms of consumption. A young man from urban India, for instance, may buy a new deo every three to four days and not think too much about the expenses incurred on such purchases. The rural India cannot match the sales volumes of urban India.

There has been a perceivable change, though in the rural market demand. In the past, the rural consumers spent only on the traditional cosmetic items such as kumkum and kajal. But over the past few years, the products like lipsticks, nail polishes, body sprays and perfumes, besides hair oils and talcum powders, have been in great demand in small towns and villages. The women (and men) from rural India wish to look good too.

Are there any other differences between these two market types?

The urban India contributes the lion’s share to the overall cosmetics market volumes. There also is a structural difference in the make-up of these two markets. Urban centers are flooded with thousands of brand options for consumers to choose from. All the leading international brands and private labels are available in metros. With the existence of multiple brands, multiple distributors, and multiple dealers—there is a cut-throat competition in metro markets at every level.

In comparison, does the rural market offer any opportunities?

Absolutely! Since the metro markets, such as Mumbai, Hyderabad, Bengaluru, Delhi, and Chennai continue to offer sizable sales to cosmetics players, the rural markets remain largely untapped by them even today.

Companies are gradually realizing the huge potential that rural markets offer. The competition in rural India is not as severe as in metros. As a result, brand owners and their distribution channels can tap the opportunities in rural India with greater ease.

What are the key challenges faced by the cosmetics industry?

Let me be candid about this. The more educated people get, less will they spend on cosmetics. They will realise that many of the cosmetic products available in India today are more harmful than helpful. The day the Indian consumer awakens to this reality, cosmetics manufacturers will have a tough day at work.

With greater education, a teenage girl may realize that the shampoo she uses contain toxic chemicals and that its overuse may potentially lead to hazardous diseases. With proper education, a man in his twenties may discern that his innocuous looking deo may be harmful if sprayed all over the body every day.

Isn’t it related to the quality of the ingredients used?

It is also about the gap between the claims made by brands and the reality. Brand owners mention big name ingredients to boost sales. The customer has to be aware whether these big name ingredients are actually needed to be included in those products or not.

But aren’t there standards and certifications to regulate the quality of products or the ingredients used?

India has a long way to go when it comes to the system of standards. The system needs to undergo massive improvements. The quality standards prevalent in the developed market are far more stringent than what we see in India. Every product, before being allowed to be shipped to these countries, has to undergo several tests. Only the products that pass all tests can reach retail shelves.

Do you see any improvement or steps taken for this? Many companies are making herbal based products nowadays…

The use of the term herbal can be misleading. Something like homegrown aloe vera used in its purest form without further processes is herbal. For instance, you apply the gel from aloe vera leaves directly to your skin. Ideally, only that should qualify as herbal and not what is printed on the label. Claims made by labels can potentially be bogus.

If herbal products contain chemical ingredients, then they should not qualify as being herbal. Brands misguide consumers by calling their products as herbal when only one or two ingredients are herbal and the rest is all chemicals. A lot remains to be achieved in India with regards to enforcement of rules with respect to quality standards.

Is the quality issue due to lack of capabilities? Are manufacturers here not capable to produce great quality products?

Quality of Made in India products is not the real issue. In fact, many Indian products are far superior to many other competing products available in the developed Asian markets. It is more to do with imposition of stricter rules and consumer awareness. Consumers should start asking straightforward and tough questions to brands. Greater consumer awareness and stricter implementation of rules may perhaps change things for the better.