With Flipkart Group company Myntra investing in the growing personal care segment, Amazon India is also reportedly looking to tap the segment with its own brand of personal care and beauty products. The country's two top e-commerce majors appear to be locked in a race to capitalise on the cosmetics segment.
However, why are the online retailers eyeing this particular segment? According to the report, they are increasing their focus on cosmetics, which is a high-margin category, at a time when the online apparel market, worth $3.8 billion and growing at a modest 10-12 per cent, has shown decelerating growth.
However, sounding a note of caution, experts told the financial daily that both e-tailers should establish themselves in the category before striking out with in-house brands.
Speaking to the financial daily, an anonymous source familiar with the plans said that Amazon India was in talks with contract manufacturers and would be "launching private labels in a few categories within skincare and makeup".
Amazon India, which retails 2 million beauty products under 19,000 different brands and considers the personal care and beauty segment to be a "strategically important category", and Myntra, which offers such products across over 100 brands, are competing for a pie of the domestic online beauty and personal care market, which Red-Seer Consulting expects will cross $3.5 billion by 2022 from about $300 million now.
Myntra, which ET says plans to launch its in-house beauty and personal care labels this year along with retailing through offline stores in collaborations with international players, is investing in the growing personal care segment and expects it to contribute 7-8 per cent of its revenues in the next two years.
"Personal care is an important category and we are investing in it," Myntra CEO Ananth Narayanan had told news agencies in December, adding, "The purchases are more frequent and we have seen a strong growth in the category with brands like Estee Lauder."
Myntra aims to clock a total revenue rate of $2 billion by March 2018.
Speaking about the product portfolio, Narayanan revealed that the company would operate in the "masstige" segment. The fashion e-commerce major would look at "more mass-premium or masstige products like a Mac or Bobbi Brown", he said, adding that the company also hoped "to bring in more international brands".