Market Research Report Herbal Beauty Care Industry

Market Research Report Herbal Beauty Care Industry

MARKET RESEARCH REPORT HERBAL BEAUTY CARE INDUSTRY 1 REPORT OVERVIEW Industry Discussed – Herbal health care Focused Market– Indian affluent class Analysis focused -- Determine the industry & market potential. -- Identify prominent existence player. -- Analyze their market, product , profitability & weaknesses. -- Understand their sales, marketing & distribution strategy. Client’s objective The report was to be used to assess the market potential and viability of the high end product among the elite segments of India. MARKET RESEARCH| CONFIDENTIAL 2 CONTENTS Industry Overview 3 Industry Trends 4 Porter’s Five Forces Model 6 Market Overview 9 Growth Drivers 10 Competitive Analysis 11 Profit Margin Analysis 15 • Shahnaz Husain 15 • Kaya 16 • Kama Ayurveda 17 Competitor’s Weaknesses 19 Category-Wise Price Comparison 22 • Body care Products 22 • Facial Care Products 23 • Hair Care Products 24 Our Opportunities & Recommendation 25 Mistakes to Avoid 26 MARKET RESEARCH| CONFIDENTIAL 3 ₹XXX-₹XXXB Industry Size XX%-XX% Annual Growth INDUSTRY OVERVIEW With a growing economy that plans to see annual income triple by 20XX, the cosmetics market of India is full of opportunities and is a potential gold mine for many beauty and personal care companies. Experts tend to agree that the Indian market is bound to explode in a very good way. The beauty industry in India is “Cosmetics market in India growing at a break-neck is growing faster than many pace, almost twice as fast as other developing countries. that of the markets in the Though organic skincare United States and Europe. market is still at a nascent stage in India, the growth According to the recent and penetration in this report by FCCI, the overall segment is very Indian beauty market is remarkable.” currently pegged at ₹XXX- -Aditi Vyas, ₹XXX billion and is growing at Founder & Director, the rate of XX%-XX% per Azafran Innovacion Ltd. annum. MARKET RESEARCH| CONFIDENTIAL 4 INDUSTRY TREND Beauty And Personal Care Growth Slows Down In 20XX Though the beauty and personal care market continued to register good growth in 2015 but the growth was lower than over the period as a result of the impact of sluggish consumer expenditure on demand for mass products. However, within premium product categories, demand remains high and consumers in urban consumers with higher disposable incomes are trading up to more expensive brands. Rising Herbal Personal Care Sales Demand for natural, herbal and Ayurvedic products was on the rise in 20XX due to launch of a number of new products and variants backed by strong promotional campaigns carried out by top players in the industry to tap into the potential of natural, herbal and Ayurvedic products. MARKET RESEARCH| CONFIDENTIAL 5 Industry Dominated By International Brands, In 20XX, the Indian beauty and personal care sales were dominated by international players with diverse product portfolios catering to the mass customer segment with good distribution channels. The domestic players managed to do well by launching new products with aggressive marketing campaigns. Grocers Remain Preferred Distribution Channel Independent small grocers remain the primary channel for sales of beauty and personal care products in India due to the fact that products such as bar soaps, body lotions, shampoos and hair oils tend to be purchased within smaller neighborhood independent grocery stores. However, while internet retailers, beauty specialist retailers and modern grocery retailers currently have smaller sales shares, they are rapidly growing in popularity and recording strong sales growth. Demand Expected To Remain Strong The beauty and personal care market in India has huge growth potential as a large number of products still have only limited penetration in the country. The demand will be driven by a number of factors, including rising disposable incomes, increasing product penetration, the growth of modern retailers, increasing awareness of beauty and personal care products, the rising aspirations of consumers, and strong economic growth. As a result, overall beauty and personal care constant value growth over the forecast period is expected to be higher than during the review period. MARKET RESEARCH| CONFIDENTIAL 6 PORTER’S FIVE FORCES MODEL The beauty industry has grown over the past few decades and it is currently a multi billion rupees industry. Many consumers of beauty products have realized the importance of self image and presentation and this has boosted the purchase of beauty products across the world. There is great innovation in this industry which has also led to the gradual growth in the beauty industry. However, there are certain factors which affect the entry to the beauty industry by firms. These factors can be briefly analyzed using the Porter Five forces analysis. They include the threat of substitutes, threat of new entry, bargaining power of customers and suppliers as well as intensity of rivalry in the industry. THREAT ENTRY: LOW No barrier for new entry Initial capital investment is huge Initial set up of business is complex Huge growth opportunities in herbal beauty industry. BUYER BARGAINING SUPPLIER BARGAINING POWER: HIGH POWER: LOW RIVALRY: HIGH Multiple options to Large number of Stiff competition chose from suppliers FDI in B2C can fuel Low switching cost Large supply of up the competition Price information easy diverse products available THREAT SUBSTITUTE: HIGH Lot of alternatives available Low switching cost for the Buyer MARKET RESEARCH| CONFIDENTIAL 7 Threat Of New Entrants: The beauty industry has a low threat of new entrants due to the huge costs of entry. Developing unique beauty products requires a lot of resources both in terms of research and development and the actual manufacturing process. Few middle and small scale firms have access to the funds and expertise required to perform this effectively. Another factor which discourages entry into this industry is the huge competition present in the industry Bargaining Power Of Customers: The beauty industry has a high bargaining power of customers due to the increase in competition and availability of beauty products from a variety of manufacturers. Bargaining Power Of Suppliers: The beauty industry has a low bargaining power of suppliers due to the high number of market players and large supply of diverse products to the market. There are many beauty products which are developed by both large and small scale manufacturers. Due to the huge supply, consumers have the power to influence the market prices as opposed to the suppliers. Threat Of Substitutes: The presence of many competitors makes the threat of substitute high. If manufacturers sell their products at higher prices, or if the products are of low quality, then consumers are able to purchase substitutes from the many competitors who are present in the market environment. MARKET RESEARCH| CONFIDENTIAL 8 Rivalry Within Industry: With high threat of new entrants and no entry barriers, the competition in the beauty industry is so intense and getting more intense day by day. Business have to come up with new unique beauty products every often and spend more in research & development and marketing to be in the competition. CONCLUSION The industry has high competition, high entry barriers, low supplier power, high customer power and a large number of substitutes. In order for the company to enter and be successful in the beauty industry, it has to apply various strategies. These may include focus on emerging markets, implementing a cost leadership strategy, implementing research and development and applying aggressive marketing campaigns. These strategies will ensure that the company captures a market share, develop customer loyalty and achieve long term profitability over the years. MARKET RESEARCH| CONFIDENTIAL 9 “During the last decade, the herbal beauty care business has emerged as the new growth frontier for beauty business in India,” - Kuick Research Natural Hair Care ₹X.XXCr XX% Current Market Size Growth rate Organic Skin Care ₹XXX Cr XX%-XX% ₹XXXX Cr Current Market Size Growth rate Est. Market Size(2020) MARKET OVERVIEW Driven by the increasing awareness towards beauty & wellness, and rapidly changing life-style, herbal beauty sector is one of the fastest growing segment in the global personal beauty product industry. Organic living is seen as an established trend in developed countries and the concept is fast catching up in India with consumers opting for organic products for daily life. The trend of 'Go Organic' or 'Live Organic' is catching up in the skincare segment too. Market Potential Organic personal care products are XXXX manufactured from natural ingredients extracted from plants, herbs and flowers under eco- Figures friendly conditions. Currently the in market for organic beauty products XXX crores in India is estimated at ₹XXX crore and growing at XX-XX% per year. The market is estimated to grow two-fold in next five years and cross the mark of ₹XXXX crore by the year 20XX. 2015 2020 MARKET RESEARCH| CONFIDENTIAL 10 Our findings based on a study done ₹X.XX Crore by the research firm Nielsen, reveals Market size of the that market for herbal shampoo is herbal shampoo pegged at ₹X.XX crore and the market is growing at a rate of XX% per XX% Annual annually. Growth Rate "while consumers in the rest of the world have to be educated about the MARKET GROWTH DRIVERS benefits of natural herbs, Organic skin care products are this knowledge is well gaining fast traction in the Indian inherited in India from markets as well as APAC region, generations.” with notable brands making a beeline into the segment. Rising concerns for health, safety, Health & increasing go green consciousness Safety and growing consumer awareness Consciousness towards hazards of synthetic chemicals has fueled the demand for Young Urban organic personal care products in Population these regions. With the emergence of a young urban elite population, rising Rising disposable incomes and increase in Disposable Income working women looking for lifestyle- oriented and luxury products, the Increasing market for organic skin care is Working expected to grow as more people Women Population shun chemical products in favor of organic ones.

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