When it came to India, The Body Shop – the second largest cosmetic franchise in the world – was targeting only high-end consumers. But it didn’t take long for the 100 per cent subsidiary of French cosmetics brand L'Oreal to realise that the only way to prosper in the country is to move down the economic pyramid.
So last year, Body Shop lowered the prices of around 200 of its best-selling items. But that was only a trailer. This year, the cosmetics brand extended the 10-35 per cent price cuts to 600 more products. “We want to be an affordable brand for Indian consumers,” says Shriti Malhotra, general manager, Body Shop India.
Brands like Body Shop insist that they do not intend to be a super-premium brand. “We are in the segment between mass and premium,” claims Malhotra, who is eyeing first time consumers with its lower price strategy. The new ‘The Body Shop Loves You’ campaign will give up to 35 per cent reduction in prices and Body Shop says that these reduced prices are “in-line with key markets.”
That, experts say, is a sensible strategy as the Indian retail beauty and cosmetics market is currently estimated at Rs 4,370 crore, growing at 15-20 per cent annually – twice as fast as that of the US and the European market. And 90 per cent of the demand is for the medium or low-priced products. It’s that segment of the market that Body Shop is targeting.
Body Shop plans to widen its retail presence from the 40 stores across 18 cities to about 65 stores in 30 cities. In India, The Body Shop has a franchising arrangement with Planet Retail Group. Body Shop has 2,400 stores in 61 countries.
But there is tough competition. This segment has seen the entry of quite a few new players, including Piramal Healthcare, Faces Cosmetics and the Pierre Fabre Group, the second largest pharmaceutical group in France, which recently launched a derma-cosmetic range, Avene in India.
Nuria Perez, global marketing director, Avene Dermatologic Laboratories says, the derma-cosmetic market in India is fairly new but has a lot of potential. The company plans to launch 20 more SKUs in the coming year.” Faces Cosmetics, a Canadian cosmetics brand, too recently announced “affordable” prices for its mineral makeup products. The company has rapidly expanded to 10 cities since its launch in January 2009.