One of the best-loved anecdotes about Covid consumption is the rise in sales of eye makeup, since masks had made lipsticks irrelevant. But it’s 2023, and the $430B international beauty market is trending upwards, all set to hit $580B by 2027.
How do these numbers look in India? Our $14B beauty market is expected to touch $21B by 2027, and research reports describe it as an “emerging hotspot with underserved consumers open to local and foreign brands.”
At Fireside, we’ve been studying the beauty landscape – particularly colour cosmetics, its fastest-growing subsegment – as well as talking to consumers. Here are the key dynamics we believe deserve a second look:
Off to office
The growing number of women in the workplace has led to a two-pronged “push” to colour cosmetics, as they seek makeup for a work-appropriate look, as well as enjoy a higher disposable income.
Nobody needs another lipstick
Lip and nail colour are experimental, impulse buys – you don’t buy lipstick because you’ve run out of it; you pick it up because it’s a shade that catches your eye, or it’s a new twist on a product. Lipsticks and nail polish act as an entry point for the brand.
Don’t go by the numbers
Most brands target the younger audience, between 18 and 30, however their buyers are often older, between 25 and 35. This comes from the older cohort’s greater purchasing power, possibly coupled with the desire to appear more youthful.
Keeping things fresh
Younger consumers flirt with several brands, and loyalty is hard to earn. The task with this consumer is to keep catching her eye, and pushing trials and repeats – through innovation. Consumer insighting will keep your brand ahead of the curve with trendspotting, and an agile approach will help you get your innovation in front of your consumers in time. The over-35s are more loyal, usually to a couple of brands. For both sets of consumers, though, brands are discovered through their nail and lip products, but loyalty or “repeats” are strongest for face and eye products.
Follow the stars
The category is aspirational, influencer-led, and desire-based. This makes it important to have a face to your brand, preferably an A-list celebrity. Next in line are social media influencers, who introduce and guide consumers to a “look” or a product. The last mile, though, is usually an instore Beauty Attendant who acts as an offline influencer, guiding you towards purchase.
Try, try, try!
Cosmetics need to be tried, so a solely online presence is untenable. You need to be omnichannel very early in your journey, since consumers need a window, whether a kiosk, or a pop up shop, to experience the look and feel of the product. After all, they conduct their own research before buying.
How to use it, how to customise it, how to create a certain look, tips, tricks, shortcuts, masterclasses… Colour cosmetics are usually supported with content from brands and from influencers of all types. This has led to a high volume of clutter, so do balance your content with commerce.
Clean beauty, green beauty
Clean beauty is a completely differentiated, and highly attractive white space especially post-Covid, as consumers have become so much more conscious of what they apply on their skin. Having said that, efficacy and performance still need to be the primary proposition. Gen Zers demand that brands stand for something, and help them express their authentic selves – showing a clear preference for brands with a sustainability practice, whether vegan or cruelty-free, or ethical sourcing, or even better practices in packaging at the right price-points – all of which would form a key part of the Fireside Value of Good.
Skin care or beauty?
Consumers expect their beauty products to be good for them as well as make them look good, which leads to the blurring of lines between skin care and beauty. Wellness is the third leg of the triangle, with Ayurvedic or natural/ clean label ingredients adding yet another dimension to products.
At Fireside, we believe the next few years will be a dynamic time for the beauty industry, bringing new opportunities and even newer challenges. The high profitability and quick scalability of the category will continue to attract new founders to serve increasingly sophisticated consumers. The need for innovation will catalyse new products and formulations, and offer consumers even greater choice and customisation. As investors and consumers, we can’t wait to see how it turns out!