1) Introduction

Indian cosmetics industry has gone through a major overhaul over the course of time.
Starting from home-grow products to chemical products and now trend is again shifting
towards herbal products. Hence, companies need to innovate themselves continuously in
order to stay relevant and competitive.
Evolution of Indian Cosmetics Industry

International
brands like loreal,
Mac etc. are
Rising disposable expanding pan-
income and growing India and home-
number of middle- grown companies
class population has especially hebal
Past generations have
helped india to brands like
mostly used home-
become largest Patanjali,
grown products like
Indian cosmetics sandalwood turmeric, cosmetics consuming Himalaya etc. are
industry got a country in the world. establishing their
lemon which lost its
Indians have had much needed appeal due to chemical overseas
a long heritage push post 1991 products. footprints.
of using beauty liberalization of
and cosmetics Indian markets.
products.
Overview of Indian Cosmetics Industry
The size of the Indian cosmetics industry globally is USD 274 billion while that of the
Indian cosmetic industry is USD 4.6 billion. The Indian cosmetics industry is majorly
categorized into hair care, skin care, oral care, fragrances and color cosmetics.
Cosmetic Industry Segmentation: Leading Brands

Hair Care Skin Care Oral Care Fragrances Color Cosmetics

Products Products Products Products Products

Market Leader
Market Leader Market Leader Market Leader
Colgate-
Marico HUL Vini Cosmetics Market Leader
Palmolive
Leading Brands Leading Brands Leading Brands HUL
Leading Brands
Parachute Fair & Lovely FOGG Leading Brands
Colgate Total
Advanced Ponds White Tone Lakme
Colgate
Livon Lakme Glam Up Elle18
Sensitive Pro-
Mediker Dove 18+ Toni and Guy
Relief
Hair and Care Lever Ayush Delicca
Colgate PLAX P a g e 1 | 10
a
According to the data published by Euromonitor- global cosmetics market is growing
steadily at 4.3% CAGR and will reach approximately USD 450 billion by 2025.
While Indian market is growing with a CAGR of 25% and will reach approximately USD
20 billion by 2025. That mean that by 2025, India will contribute 5% of the total global
cosmetics market.
Given the prospects of the growth in the Indian cosmetics Industry, it has become the
center of attraction for many domestic and international brands. Companies are spending
heavily to increase their reach to the Indian consumers. There are many factors that are
fueling this unprecedented growth in the cosmetics industry:

Rising disposable
income of Indian
consumers

Globalization
impacting
lifestyles

Increased
penetration by
online and retail
channels

Adoption of
natural products

2) Contemporary Product Under Cosmetics Industry- Face wash

Amongst the various cosmetics categories (hair care, skin care, oral care, fragrances and
color cosmetics) skin care is one such category that is getting increasingly popular
amongst males and females equally. This is primarily due to the prospective change by
the companies as the brands shift focus from selling to educating consumers about skin
care in effort to build lasting relationship with customers. Companies are launching
products that meet the specific skin-type requirements of the customers and with the help
of trained staff professionals they help customers understand what suits best for their skin
problem and suggest solutions according to that.

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Skin care category is further divided into many sub-categories- Body care, Facial
care and Hand care. According to the recent data report published by Euromonitor
facial care occupies approximately 89% of the sales value of entire skin care market.
Sales of Skin Care by Category

For the purpose of this report analysis we will be focusing on the Face wash market in
India under skin care category. Indian Face wash market has projected to grow at a rate
of 15% CAGR over the period 2018-2023. Factors like rise in disposable income,
growing number of middle-class population, desire among men and women to look fresh
and consciousness towards personal hygiene are few factors that drive the sale in face
wash market.
3) Competitive Analysis
The skin care regimes had been existent in India for decades but the skin care routines
have been greatly changed over the years. Face wash has a significant share in the skin
care segment which accounts to about 35% of the overall skin care products.
Companies like Unilever, Himalaya, and L’Oréal who have the significant market share
in this category have products at various price ranges according the targeted consumers.
Unilever has brands like Ponds, St. Ives, Lakme under its portfolio where Ponds is
positioned as the affordable face wash brand and Lakme and St. Ives are costlier than the
Ponds. Himalaya has a different USP (Unique Selling Preposition) which brands itself as
an ayurvedic product and most of its products are in the affordable range only. L’Oréal, a
French brand has more premium products in its portfolio and are costlier than the
products from Unilever and Himalaya, hence targets different set of consumers. There are

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other brands under Johnson & Johnson like Clean and Clear, Neutrogena and
products from Amway whose demand is picking up in the recent few years.
These brands have an history of resorting to heavy spending on advertising their products
in India given the fact that there is less awareness of skin care products in India, and these
brands took necessary steps in creating product and brand awareness by roping in
celebrities to advertise their product offerings. Research suggests that the whole industry
spends 80% of their marketing budget in TV ads and now the shift is changing gradually
to the other platforms.
Performance of different companies in India

Performance of different brands in India

3.1) Threat of Substitutes

Threat of substitutes is high in case of face wash industry due to high availability of many
alternatives and low switching cost for the buyers. Since there are many competitors
present in the market place buyers can easily switch from one alternative to another for
better cost and improved quality. That is why it is important for companies to keep
innovating their product line.

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Buyers cannot only switch from product of one company to another but also to the
product type of one company to another product type of same company. Based on the
product type for specific skin requirement face wash market is segmented into dry skin,
oily skin, normal skin, anti-acne and sensitive skin. Hence, it is very important for
companies to diversify their portfolio and include face wash for different type of skin
category so that buyers do not switch from one brand to another due to the lack of
sufficient option. All these factors contribute to high threat of substitute for face wash
market.
3.2) Competition
With no or less entry barriers for new firms to enter and high threat of substitute,
competition in the face wash industry is so intense and getting more intense day-by-day.
Hence, it is very important for companies to respond quickly to changing customer
demands. Companies are adopting to various strategies to stay ahead in the competition.
For example, Hindustan Unilever continued to host its Lakme Fashion Week, which
attracts many consumers. HUL retained its leadership position in 2018 as well by
relaunching its core brand Fair & Lovely. Apart from this its strong presence across retail
and online channels have helped it penetrate well in urban and rural India market.
Though the competitive landscape is primarily dominated by large multinational players
such as HUL and L’Oréal, competition is getting heated up by small domestic players
who have been launching the products and targeting local audience. For example, brands
like Organic Riot, Phy and Enn’s closet are targeting the premium skin care category by
offering products derived from natural ingredients.
3.3) New entrants
The market for face washes in India is predominantly covered by Unilever, Himalaya
Drug Co, and L’Oréal which constitutes to around 65% of the total market size in India.
These companies sell their products through distribution channels via retailers or through
their exclusive stores.
Research about the cosmetic industry suggests that these companies spent more resources
in educating the consumers about maintaining healthy skin regimes and had been
successful which is evident from the increasing demand for the face washes. The increase
in demand and also the rise in disposable income among consumers enabled newer
brands entering into the face wash segment.
There have been many brands and companies in the past couple of years entering in the
Indian market given the opportunities- current market for facewash in India is around
2000cr rupees and is expected to grow at 10 – 15% CAGR. Newer brands like Kaya,
Beardo, The Man Company, and luxury ayurvedic brands like Forest Essentials and
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Kama Ayurveda have been successful in creating the space for themselves at a time
when Unilever, and Himalaya had been ubiquitous with their products.
Mostly, the new players use the lucrative online medium to target its potential customer
base than the traditional distribution network as consumer-awareness has never been the
problem for the new entrants. New entrants are using social media platforms like
Facebook, and Instagram effectively to place the orders and market their offerings which
is a cost-effective model. Also, platforms like Nykaa through its wide range of collection
enables the new brands and companies to sell their products.
The below table shows different brands and their offerings in Face washes through
various platforms and their target customers:
Forest Patanjali Body Shop Kama The Man
Brand Essential Ayurvedic Company

Men and Men and Men and Men and Men of age
Target women of women women of women of group 18 to
Market age group age group age group 40
18-40 18 to 55 18-40
Products Swadeshi, Products Organic Exclusively
USP having yoga are not products for men
spring inspired tested on
water products animals
Rs 400 to Rs 40 to Rs Rs 400 to Rs 300 to Rs 300 to
Price Rs 3000 300 Rs 1800 Rs 2000 Rs 1500

Customer E-business, E-business, E-business, E-business, E-

Service retail retail retail retail businesses
outlets outlets, outlets outlets
pharmacies

This shows there are virtually no barriers for entry for newer brands in face wash
category of the skin care as many newer brands have been successful in this domain .
3.4) Bargaining power of buyers
Face washes are generally categorized on the basis of their reaction to the different skin
types. Till recently, most of the face wash brands targeted women and came up with more
products suitable to the skin types of women. The trend has been slowly changing as the
market share for men face washes has risen to around 20% and many companies are now
trying to leverage the growing awareness of the face washes among men. For example,
brands like The Beardo, The Man Company, Ustaara have their products exclusively for
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men but their overall market share in the face wash category isn’t that significant.
But, this growing demand for men face washes has prompted many companies and
brands to release more and more products for men to stay alive in the competition.
Also, ayurvedic and herbal brands like Patanjali, Forest Essentials, Kama Ayurveda,
Lotus Herbals have come up with face washes suitable for all the skin types and making
the market more competitive. These products proved their effectiveness and the demand
for herbal or Ayurvedic products has substantially increased in India that many
mainstream companies also started manufacturing the herbal face washes. Also, the
inclination of consumers towards swadeshi products
made the ayurvedic brands even more desirable and companies like Patanjali could make
a huge benefit out of it.
Animal Testing is one key thing all the brands want to avoid as buyers have become
more sensitive regarding the same and this has become the USP (Unique Selling
Preposition) of many brands like The Body Shop, and many companies are following the
suit. This shows that the buyers have huge say in the face wash industry as it is evident
that companies have been continuously changing their products according to the
customer preferences and the bargaining power of buyers is very high.
3.5) Bargaining power of suppliers
Face wash industry consists of herbal or ayurvedic products and the normal face washes
that constitute of various compound chemicals. There are many suppliers to either of the
categories and the cost of the raw materials to the face wash industry can’t be controlled
by an individual or a group of suppliers. This says that bargaining power of suppliers is
low.
4) Insights from Porter’s Five Forces Analysis
The industry has high entry barriers, high competition, low supplier power, large number
of substitutes and high customer power. In order to stay ahead of the competition,
companies need to take strategic decisions to create point of differentiation amongst other
options available in the market. These may include implementing research and
development, focus on emerging markets, designing aggressive marketing campaigns and
implementing cost leadership strategies. All these steps will help ensuring long-term
growth of the companies.

5) Future Prospects of Face Wash Industry

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In order to survive and achieve sustainable growth in this VUCA (Volatile,
Uncertain, Complex and Ambiguous) world, it is very important for companies to
align their market strategies according to consumer preferences. Below are some future
prospects of face wash industry:
Market Size:
 Indian face wash market is expected to grow approximately with a CAGR of 15%
over the period 2018-2023.
 Market share of unorganized and organized marketplace will be 45:55 by 2025
from the current ratio of 25:75
 Online market share will be increased by 8% from current value of 2%.
Factors Fuelling Growth:
 Rise in the disposable income of Indian middle-class
 Wider market penetration into urban and rural market
 Growing awareness of people towards skin care
Influx of Brands:
 Many international brands like L’Oréal, Colorbar and NYX are penetrating into
Indian market.
 Existing brands are also trying to reach wider set of audience by increasing their
footprints to newer territories
Increasing Demand of Herbal Products:
 There is a growing demand for herbal products, especially in southern part of India
due to pre-existing inclination towards herbals.
 Export potential is also increasing. Domestic brands like Patanjali, Himalaya are
increasing their overseas footprints.
Innovative Distribution and Marketing Strategies:
 E-commerce channels have enabled the foreign brands to cater to cross-border
markets
 Due to increased influence of social media, bloggers have high influence on
consumer trends
 Added facilities like beauty tip, treatment, trail makeup and salon services are
helping to increase consumer awareness regarding skin care products.

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6) Conclusion
The face wash market in India has been existing from quite a long time but the
awareness about it started increasing very recently. There are companies present in India
like Uniliver and Himalaya from decades but the awareness and demand for face washes
opened market for multiple companies. This demand may be due to the rise in disposable
income among the consumers and increase in the marketing budget by the companies to
make the consumer aware of the product. The trend in face wash market partly has been
shifted to the ayurvedic and herbal products after few companies like Patanjali started
manufacturing only herbal products and consumers were able to appreciate their
effectiveness. This made the other companies to follow the suit. The total market for face
washes is expected to grow at 15% CAGR and soon catch up with the matured markets
like the US, South Korea and other European nations.

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7) References
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57j0l4.6215j0j7&sourceid=chrome&ie=UTF-8

https://www.businesswire.com/news/home/20180419005783/en/India-Face-Wash-
Market-Overview-2018-2023--
https://www.livemint.com/Industry/erjvdcqO9L9BtcmucP36eL/Guess-whos-
driving-the-face-wash-market-in-India.html
Neilsen
Euromonitor Internationational
https://www.transparencymarketresearch.com/face-wash-market.html
https://www.lucintel.com/facial-cleanser-market.aspx?
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