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Online beauty sales to touch $3 bn by 2020: Google-Bain study

The report predicts 20% of total beauty & hygiene sales to come from online, double that of the 8-10% online sales for the FMCG market

BS Reporter  |  Mumbai 

Online beauty sales to touch $3 bn by 2020: Google-Bain study

A study by technology major Google and consultancy firm Bain & Company says that online sales for beauty & hygiene products will be double that of the overall FMCG market by 2020.

The study, a follow-up of the first edition released last year, says that online beauty & hygiene sales will touch $3 billion by 2020. Online sales of the overall FMCG market in the interim will touch $8-10 billion, the study says. This assessment is based on the estimated value of the FMCG market in 2020, which will be $100 billion, the report says.

It is important to note here that the first edition of the Google-Bain report had said that online FMCG sales would be $5 billion in value by 2020, which is 5 per cent of $100 billion.

“A figure of $8-10 billion (or 8-10 per cent of $100 billion) is a significant upgrade over last year’s figure. But our predictions are based on the manner in which e-commerce is evolving in India,” Nikhil Prasad Ojha, partner, Bain & Company, said.

Last year's report had also marked out a few categories that would lead the charge as far as online sales went. While beauty was included in this list, some of the other driver categories included male grooming, food & beverages and infant care respectively.

The report this year also notes what it had last year — that a third of the $100-billion FMCG market (which is $35 billion in value) would be influenced in some form or the other by the digital medium by 2020. Adding a layer to that, this year's report says that $11 billion of the $17-billion beauty & hygiene market, which is two-thirds of that market, would be influenced by the internet.

The report estimates that 130 million Indians will buy beauty and hygiene products online by 2020, which is 52 per cent of the 250 million people who will shop online by then.

The base of online shoppers itself will be significant, the report says, touching 38% of the Internet user base of 650 million by 2020. "There has been a consistent growth in online shoppers in the last two years and this number will only grow in the next few years," Vikas Agnihotri, industry director, Google India, said.

Beauty & hygiene searches on Google, Agnihotri said, were the third-largest after apparels & accessories and mobile phones. "Despite being the third, beauty & hygiene is the fastest-growing category for shopping searches, showing a surge of 33% year-on-year," he added.

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First Published: Sat, February 13 2016. 00:24 IST