- L’Oréal is eyeing companies with a range of make-up and skin care products to fill gaps in its existing portfolio, says MD Amit Jain
- As of 2018, India’s beauty and personal care market stood at ₹97,100 crore, according to Euromonitor
The local arm of the world’s largest cosmetics company, L’Oréal, is scouting for acquisitions in the skin and make-up market in India, said a top company executive, adding that it seeks to capitalize on the country’s rising demand for beauty products.
L’Oréal is eyeing companies with a range of make-up and skin care products to fill gaps in its existing portfolio, which comprises Garnier, Maybelline, NYX and L’Oréal Professional, Amit Jain, who took over as the managing director of the French company’s India business last year, said in an interview.
“What’s of great interest to us is skin and make-up. These are two areas that are still nascent in India, where we believe there are a lot of opportunities,” he said.
While Jain declined to share details of the companies that L’Oréal is eyeing, he said the company’s global M&A team has been talking with companies in India. “If in the next one year we haven’t got something, then we would have missed an opportunity,” Jain said.
While L’Oréal has a large portfolio of global brands, Jain said it is looking for brands that meet specific needs of Indian consumers. “We are looking for good strong formulations for Indian consumers, and high quality manufacturing. For us, it is also about getting in products that are close to the Indian consumers both from a brand and product type.”
Brands offering a natural proposition “will be interesting for us,” he added.
L’Oréal’s interest in Indian companies comes as the market for beauty products in India is growing.
As of 2018, India’s beauty and personal care market stood at ₹97,100 crore. Of this, coloured cosmetics is estimated at ₹8,000 crore, while skincare is estimated at ₹12,500 crore, according to data from research firm Euromonitor. Coloured cosmetics is expected to grow at an annual average growth rate of 17.4% through 2022, and skincare is estimated to grow at 10.4%.
Overall, the market for beauty and personal care products will grow at 10% during the same period.
India’s growing youth population is contributing to the exponential sales growth of grooming products, more so as the smartphone-wielding millennials are in know of the latest beauty and fashion trends the world over and are seeking more variety at lower price points.
The popularity of e-commerce companies, such as Nykaa and Amazon, has also helped the youth get access to the latest products. This has prompted major brands, including Hindustan Unilever-owned Lakme and L’Oréal’s Maybelline to spruce up new product launches.
While globally, L’Oréal has built a sizeable business through acquisitions, including popular brands such as The Body Shop, Vichy, Kiehl’s, Shu Uemura, IT cosmetics, Maybelline, Nyx and Urban Decay, its India business is still small compared to fast moving consumer goods (FMCG) major Hindustan Unilever, which has a large portfolio of hair care, personal care and beauty products under Sunsilk, Dove, and Lakme brands.
In India, L’Oréal made its first acquisition in 2013 with the purchase of Mumbai-based skin care brand Cheryl’s Cosmeceuticals.
“We acquired Cheryl and spent the last three years in completely homogenizing, formulating, and bringing them up to L’oreal standards. Now, we have upgraded the products and formulations to a level where it can travel across markets,” Jain said.
L’Oréal started business in India 1994. It sells a range of products including mass-market brands L’Oréal Paris, Garnier, Maybelline New-York, professional hair products under the Matrix, Kérastase brands, and premium beauty products under Lancôme, Kiehl’s, Vichy and La Roche-Posay.