Strategic tools for the practising manager

KIT

This week: The cosmetic and skincare market in India

Cosmetics and skincare products can be defined as those used for cleansing, beautifying, promoting attractiveness or alternating one's appearance.

The Indian cosmetic industry is buzzing with optimism with a total market spend of Rs 4,897 crore.

Cosmetics and skincare has a 100 per cent category engagement among affluent Indian consumers.

Over 90 per cent of these affluent consumers are aware of luxury cosmetics brands.

Domestic brands have a purchase incidence of 71 per cent with repeat sales, but international brands in spite of high brand awareness do not see repeat sales.

Eighty five per cent of Indian consumers are aware of premium skincare brands with a purchase incidence of 56.6 per cent.

Ninety-three per cent of women buy cosmetics and skincare products from India and a mere 15 per cent buy it from abroad.

Consumers falling in the age bracket of up to 35 years spend the maximum on cosmetics and skincare and buy them on an average eight-nine times a year, whereas consumers in the age group 41 to 50 years and above buy cosmetics approximately five times in a year.

The annual per capita spend on cosmetics and skincare is Rs 13,600 and Rs 15,500 respectively.

Seventy per cent of the consumers like to buy these products from departmental stores.

NUGGETS
Selections from management journals

Most companies do a thorough job of financial due diligence when they acquire other companies. But all too often, deal makers simply ignore or underestimate the significance of people issues in mergers and acquisitions. The consequences are severe.

Most obviously, there is a high degree of talent loss after a deal's announcement. To make matters worse, differences in decision-making styles lead to infighting; integration stalls; and productivity declines.

The good news is that human due diligence can help companies avoid these problems. Done early enough, it helps acquirers decide whether to embrace or kill a deal and determine the price they are willing to pay. It also lays the groundwork for smooth integration. When acquirers have done their homework, they can uncover capability gaps, points of friction and differences in decision making.

Even more important, they can make the critical "people" decisions "" who stays, who goes, who runs the combined business and what to do with the rank and file "" at the time the deal is announced or shortly thereafter. Making such decisions within the first 30 days is critical to the success of a deal.

Human due diligence
By David Harding and Ted Rouse
Harvard Business Review, April 2007
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