Indian conglomerate Tata Group plans to regain ground in the beauty sector it left 23 years ago, with the local cosmetics market expected to reach $ 20 billion by 2025.
Beauty products will now be “a priority for us” along with footwear and underwear, said Noel Tata, non-executive chairman of Trent Ltd., a unit of the Tata Group operating a chain of retail stores, said in an interview. at her office. in Bombay. âAn expanded product line and format experiments for these products are on the horizon as we see them as growth areas in retail. “
India’s cosmetics and beauty market is expected to nearly double by 2025, up from $ 11 billion in 2017, according to data from Statista, largely aided by online retailers run by Mumbai-based Nykaa, which has experienced tremendous growth during the pandemic. The startup, which is now a $ 13 billion company after a successful IPO, has helped Millennial and Gen Z consumers buy high-end beauty brands as well as access tutorials and to testimonials from social media influencers.
It’s a far cry from the beauty industry dominated decades ago by India’s largest business house. Simone Tata, Noel Tata’s mother, helped found Lakme – the French name for the Indian goddess of wealth, Lakshmi – in 1953 as the country’s first cosmetics company. The group sold it to the local unit of Unilever Plc in 1998. While the coffee-to-car conglomerate returned to the field in 2014, well after the 10-year non-compete clause expired, It was only now that the group started to step up their game again.
The beauty, footwear and underwear category revenue is around $ 100 million for Trent while the market is currently around $ 30 billion, according to data provided by the company.
âAll three of these segments would be handy fruits for Tatas as they aggressively develop their stores and distribution channels,â said Kranthi Bathini, equity strategist at WealthMills Securities Pvt. âWhile competition is strong in these segments, the pie itself is growing rapidly as consumption rebounds in the economy. “
The $ 103 billion conglomerate, under Trent, plans to create new lines of in-house cosmetics brands that may be a driver of growth, Tata said. These products can be retailed through existing large-scale outlets under Westside – Trent’s flagship retail chain – or through stand-alone stores and through digital channels, he added.
Noel, Ratan Tata’s half-brother, is a director of the board of directors of Ratan Tata Trust, which is part of a collective of charities that owns two-thirds of the shares in the main holding company of the Tata group. He has overseen the group’s retail operations hosted primarily in Trent for over two decades.
Indian women used to buy makeup and hair care products from neighborhood stores where selection was scarce and testing unheard of. With the proliferation of shopping malls and supermarket chains and, more recently, online stores, the industry has turned into a fast growing industry, especially the three segments targeted by Tata.
âI think we’ve barely scratched the surface in these categories and that a significant portion of these markets are still unorganized and a shift to organized retail is inevitable. We are also seeing a change in the behavior of consumers preferring more fashionable products in these categories. “Tata said.
The shares of Trent, founded in 1998, have grown more than 9-fold under Tata’s leadership since 2014, surpassing those of its peers Aditya Birla Fashion and Retail Ltd. and Shoppers Stop Ltd. In November, he took a non-executive role at Trent.
âI see the digital opportunity helping us reach more customers wherever they are,â Tata said, whether it’s browsing and buying online or in a physical store.
Trent was an early adopter of the omnichannel model in Indian retailing with TataCliq and recently stepped up his online presence with Westside.com. A great app, which Tata Group is developing, will expand customer access, he said.
But Tata’s retail business will remain on the sidelines of the big discount strategy of e-commerce giants, including Amazon.com Inc and Flipkart Online Services Pvt. to attract price-conscious buyers, Tata said.
About 90% of Trent’s total sales are made at full price, according to data provided by the company.
(Except for the title, this story was not edited by NDTV staff and is posted from a syndicated feed.)