India’s beauty and personal care sector is growing at 11 percent and is currently a USD 18 billion market. Global brands are making a beeline for India to take share, and companies in India are making a decisive impact with their new products. This insight was published in the recent blog from Business Sweden titled “Hit the spot with beauty and personal care products in India.”
Cecilia Oskarson, Trade Commissioner of Sweden to India, appealed to Swedish beauty and personal care brands to consider India a viable partner in their journey toward their future growth prospects. Given the large and rapidly evolving consumer base with growing income and changing preferences, there is space for new brands to enter the country, which is currently a USD 18 billion market. She also offered Swedish enterprises assistance if the idea of launching in a market the size of India seemed daunting to them.
While reading Cecilia’s post and the blog, my interaction with Robert Jonchick, Co-founder of Oriflame at Stockholm, and Peter Huggard, Head of India Operations, flashed before my eyes that got published in my feature highlight Indo-Swedish Relations in 2002.
While discussing if Robert felt deterred while choosing Oriflame to enter India in 1995, he mentioned, “While we were planning to enter India, I interacted with plenty of other Swedish Companies and learned that India is a very different and difficult market. But then I always tell them one thing – doing business outside your home is never easy. We saw India as a huge market with lots of potential, a liberalizing economy offering sizeable opportunities, low manufacturing costs, export benefits, etc. Today, I don’t have any regrets that we chose India over China.”
Regarding the price sensitivity of the Indian market, Robert mentioned, “We are not expensive when you compare us with globally renowned brands. Yes, we are expensive when you compare us with the local brands. Once again, some product lines are expensive while some are not. We are constantly trying to be competitive without compromising on quality. The whole idea is to offer ‘Value for Money’.” Further, Peter Huggard mentioned, “In sync with ever-changing market demands. Oriflame works to provide its customers with the most innovative and high-quality products.”
In 2004, I again had an opportunity to meet Robert Jonchick, accompanied by my colleague in Stockholm, for yet another Sweden special. Robert was excited to share, “Oriflame continues to show robust growth, and sales have shot up by 20% to Euro 652 million in 2003 while operating profits grew by 19%. While Asia contributes 5% of total sales and a mere 1 percent to the operating profits of Oriflame, it is a crucial region in terms of its overall global strategy.”
He added, “The Indian market has performed very well in Asia, and we expect rapid growth in the future. The primary category sold in India is skincare and especially whitening products. The Body care products work very well for us. By tradition, the colour cosmetic market is small in India, but it is growing fast.”
In 2004, Oriflame deputed a diehard India fan, Thomas Ekberg, from Indonesia to boost their India operations. Thomas opined, “Oriflame globally is implementing an entirely new global product strategy, built to be more relevant for customers, and that better lives up to the company’s heritage and product story, natural Swedish cosmetics. Sweden has a fantastic design tradition, and we want both that and the use of Swedish ingredients to come across more in our products.”
Oriflame entered India in 1995, among the first direct-selling firms in India. At present, 95 percent of sales of Oriflame in India come from online platforms through the app and websites.
“One of the priority markets for Oriflame is India,” says Frédéric Widel, VP & Head of South Asia & MD Oriflame India, in his media interaction. He further mentioned, “We expect to continue the double-digit growth over the next 3-5 years, and I don’t see it as a huge challenge. The company will continue to grow here for the next decades because of the growing population and will continue to invest in India and build the business.”
Interestingly, Oriflame India has recently acquired a manufacturing facility at Roorkee in Uttarakhand to cater to the wellness segment in India and other Asian countries.
Given the success story of Oriflame in India, global beauty and personal care brands should consider India for their future ventures in view of the large and rapidly evolving consumer base with a growing income.