Not just skin deep: Market trends in the skincare industry in India

In a recent panel discussion with YourStory’s Daily Dispatch, Jatin Gujarati, Head of Business, Vedix, Tarun Sharma, Co-founder and CEO mCaffeine and Anand Ramanathan, Partner, Deloitte India come together to discuss the evolving trends in the skincare industry and where it’s headed.
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The COVID-19 pandemic has accelerated growth in the skincare industry as people have begun investing in general health and wellbeing. According to researchandmarkets.com, the skincare market in India was valued at Rs 12, 976 crore in 2020 and is expected to reach a value of Rs 19,109 crore by 2025.

To discuss the buzz in the skincare space, Jatin Gujarati, Head of Business, Vedix, Tarun Sharma, Co-founder and CEO, mCaffeine and Anand Ramanathan, Partner, Deloitte India come together for an insightful panel discussion.

Jatin says that Vedix started out as a hair care brand and then forayed into the skincare category earlier this year.

According to Jatin, customers understood Vedix’s regimen-driven approach to skincare and that received amazing responses. “We saw a fantastic response to our skincare launch and that business scaled up,” he says,

Tarun shares that mCaffeine has always been heavily focussed on the body and face category and hence largely skincare segment. He agrees with Jatin about regimen-driven approach becoming popular, thanks to the proliferation of the internet. For mCaffeine, the scrubbing category is a significant one, which includes face scrubs, foot scrubs, and body scrubs.

“Skin, that is body plus face, contributes to at least 90 percent of our sales,” he says.

Speaking about the market trends and trajectory, Anand explains that the beauty and personal care market is expected to grow in double digits in the next five years.

This growth is going to be led by some key trends. There will be a lot of focus on the Tier 2-3 regions because of online channels facilitating distribution to those regions.

Apart from that, consumers’ behaviour patterns have changed due to the pandemic. And, investors are taking note. “We are seeing a lot of deal activity in space as well,” he says.

Commenting on the boom in the organic skincare market, Jatin says that the customers are now looking towards ingredient-driven products as they now understand what certain ingredients do to one’s skin. Additionally, the trends in customer searches now indicate that they are looking for products based on ingredients and not on the basis of the issue that they have.

Tarun adds that India has historically been an ingredient-driven country. An important metric that is in focus at mCaffeine is revenue by product density. The company recently launched a body wash which comes in a container in the shape of a cup of coffee. Thus, the brand is always trying to launch innovative products in existing categories.

Vedix, as a brand, has been pushing the pedal on launches in the last few months, shares Jatin. The startup recently launched a hair oil and going forward, it will continue to bring innovative concepts for the customers. The brand is going to launch a couple of other categories in the baby care and body care category in the next few months.

“Wherever there is a need or there’s a solution that Ayurveda can offer from a customer’s perspective we will make sure that we bring out a product to meet those aspirations,” he says.

Lastly, Anand says that skincare is a discretionary category and thus there will always be the need for experimentation and product innovation.

“It’s about grabbing attention and grabbing customers right now so it’s still a customer acquisition led story,” he says.

Edited by Affirunisa Kankudti