With herbal cosmetics sector expected to grow at a rate of 12 per cent annually, an increasing number of cosmetics and beauty product consumers, especially the younger lot, are preferring products that have Ayurvedic or natural ingredients. This is prompting the manufacturers in the sector to revamp their product and go-to-market strategies. A report
The Ayurveda industry in India is expected to achieve a gross market size of approximately ₹30,000 crore by the end of 2018, while it is estimated to record a compounded annual growth (CAG) rate of a robust 16 per cent until 2025, according to a Confederation of Indian Industry (CII) study. And one of the major factors that will spur this growth, is the rising popularity of Ayurvedic personal care and beauty products, the other contributors being ethical, classical, over-the-counter products, and services like medical, well-being or medical tourism services.
The size of the Indian Ayurveda sector at ₹30,000 crore per annum, compares well with the overall market size of the Indian wellness industry which is put at ₹ 85,000 crore. The Ayurveda sector is set to grow at high double-digit levels in the coming years, and that it also remains the most significant player in the global Ayurveda market, stated the CII study. According to another study by the Associated Chambers of Commerce and Industry of India (Assocham), the Indian cosmetics product consumers are increasingly preferring Ayurvedic offerings, and in this context, the herbal cosmetic industry in the country is expected to grow at a rate of 12% annually in the next few years.
Launches and revamps
To tap the burgeoning Indian Ayurvedic cosmetics and beauty product market, we witness a trend wherein a number of beauty product manufacturers are entering the Ayurvedic bandwagon (both Indian and multination corporations), while enterprises that are not even in the cosmetics sector are also entering the beauty product market just to capitalize on the rising demand for Ayurvedic options in this market.
For example, Kishore Biyani’s Future Group stated to be India’s biggest player in the retail sector, is said to be in advanced stages of launching itself in the Ayurvedic beauty products market. The group is believed to be in discussions to acquire Iraya, that sells a range of personal care products from Athena Life Sciences, a manufacturer of hair and personal care products in the spa, botanical, and Ayurvedic segments.
Iraya would mark Future Group’s entry vehicle into the Ayurvedic beauty space that has been seen much action in the last few years after the debut of Baba Ramdev’s Patanjali Ayurved which sells Ayurvedic products worth over ₹10,000 crore annually. The rising popularity of Patanjali products has prompted both global as well as domestic competitors, such as Dabur, Hindustan Unilever, P&G, Emami, and Colgate Palmolive, and even upstarts like Dr. Vaidya’s and several others, to either launch or revamp their existing Ayurvedic products portfolio and marketing strategy.
The Patanjali effect
In just a few years after its launch, Patanjali has become one of the leaders in the Ayurveda and naturals products market, having already made a significant mark in areas like cosmetics, while other sectors like beverages and dairy are being developed.
Ramdev isn’t the only spiritual entity who has been active in the Ayurvedic products market. Bengaluru-based Sri Sri Tattva, the company started by Sri Sri Ravi Shankar, founder of the Art of Living movement, has recently announced plans to have 1,000 stores selling its Ayurvedic products.
Not limiting itself to only branding and marketing products, Sri Sri Tattva wants to extend its initiatives across the entire value chain, from growing raw material to manufacturing products, as well as setting up Ayurvedic spas and panchakarmas that will complement these offerings. Currently, Sri Sri Tattva has about 300 SKUs (stock keeping units) in the market, and at least 10 more are on the anvil. The company is geared up to compete with not only Patanjali but also with global players like HUL, according to Tej Katpitia, its marketing chief.
Leveraging consumer awareness
In line with the trend, Hindustan Unilever (HUL), a leader in FMCG products, has been revamping its ‘natural’ product strategy in the last few years, which also saw it relaunching its Lever Ayush sub-brand that specializes in a wide range of Ayurvedic body care products. In 2015, HUL had acquired the Kerala-based Indulekha, to transform that brand into a national brand. Indulekha was active only in the south Indian states, with its range of offerings that included shampoo, face wash toothpaste, soap, and hand wash.
Another well-known brand looking forward to leveraging the upward movement in the natural and organic products market, is VLCC, a beauty and slimming product and service specialist, founded almost 30 years ago by Vandana Luthra. VLCC is now planning to venture into the naturals platform to drive the growth of its consumer care business. According to the company, the shift was brought in because of late, the natural and organic products market has grown exponentially, thanks to increased awareness about natural products among consumers.
Himalaya Drug Company, one of the first companies to popularize Ayurveda’s use for medicinal therapy en masse, has also forayed into sectors such as wellness and baby care. Chennai-based Cholayil, the maker of a wide range of products under the Medimix brand, had diversified from soaps to several other areas, such as face wash and moisturizer. Now, the company plans to capitalize on its Ayurveda legacy further even as it targets the younger consumer who is more knowledgeable, and less suspicious, of Ayurvedic and natural products.
References
http://www.assocham.org/newsdetail.php?id=6552
http://www.forbesindia.com/article/my-learnings/dabur-vs-patanjali-veda-wars/51627/1