*

India's luxury beauty market to quintuple by 2035,

Kearney,

LUXASIA say

*

Domestic brands account for less than a tenth of sales

*

Global brands modify offerings for India

By Praveen Paramasivam

CHENNAI, Aug 21 (Reuters) - From Japan's Shiseido ( SSDOF )

to France's L'Oreal, global cosmetics giants

are doubling down on India, betting on the world's most populous

nation as a key growth market for premium offerings while sales

slow in developed economies.

India's luxury beauty market is expected to quintuple to $4

billion by 2035 from $800 million in 2023, driven by its young,

affluent, social-media savvy shoppers with rising disposable

incomes, consulting firm Kearney and luxury beauty distributor

LUXASIA say.

Luxury beauty makes up just 4% of the $21-billion beauty and

personal care market, compared with 8% to 24% across top

Southeast Asian countries and 25% to 48% in developed markets

including China and the United States.

That means there is plenty of room for growth.

"India is the last bastion of growth for premium beauty,"

said Sameer Jindal, managing director for investment bank

Houlihan Lokey's corporate finance business in India.

"The Indian consumer is willing to experiment and try out

new things."

U.S. beauty giant Estee Lauder ( EL ), home to the brands

Clinique and MAC, expects a strong runway for expansion and

long-term growth in India, even as it grapples with soft sales

in the Americas and Asia-Pacific.

"India today, within the Estee Lauder ( EL ) network, is looked at

as one of the priority emerging markets," said country general

manager Rohan Vaziralli, highlighting plans to initially target

60 million women in the nation of more than 1.4 billion.

Homemaker R. Priyanka, based in the southern city of

Chennai, said she was thrilled to have better access to Estee

Lauder's ( EL ) Jo Malone London fragrance in India, as a benefit of

the companies' efforts.

"It is easier than asking someone (abroad) to get it for you

every time," she added.

While global beauty brands might have to modify some of

their products for India, which bakes in sultry temperatures in

summer and oppressive humidity at other times, they face little

competition from homegrown brands.

Kearney and LUXASIA identified only Forest Essentials and

Kama Ayurveda as their major rivals, underscoring how domestic

brands make up less than a tenth of luxury beauty sales.

In the more established markets of China, Japan and South

Korea by comparison, domestic brands account for a 40% share.

"There is, of course, a premium perception gap between

globally established brands and Indian brands," said Devangshu

Dutta, founder of retail consultancy Third Eyesight.

Global beauty giants' huge marketing budgets also give them

an edge over domestic brands, other industry watchers said.

WOOING INDIAN SHOPPERS

Estee Lauder ( EL ) is studying online sales patterns to identify

the smaller cities to target, such as Siliguri in West Bengal

state, partnering with designers such as Sabyasachi Mukherjee,

and launching products such as kohl, an eyeliner Indians favour.

It has also invested in Forest Essentials, a brand with

herbal ingredients, and in a programme offering funding to

domestic beauty start-ups.

This year France's L'Oreal said it was investing more in

India and tapping into the "elevated beauty desires" of the

nation's young, digitally savvy, empowered women shoppers to

drive growth. It declined further comment.

South Korea's Amorepacific, known for brands

such as Innisfree and Etude, is trying to leverage the Korean

beauty craze in India with products geared to the market.

These include items for the popular "cleanser, serum,

moisturiser, and sunscreen" beauty regimen, the country head,

Paul Lee, said.

Japan's Shiseido ( SSDOF ), with a history of more than 150 years,

brought its NARS brand to Indian beauty retailer Nykaa's

website this year, and plans to step up growth of its

brands in the subcontinent.

Global brands are very excited about India, where consumers

are splurging more to stay on top of trends such as "cherry

makeup", Nykaa co-founder Adwaita Nayar said, referring to a

look featuring flushed cheeks, glossy lips, and soft pink eyes.

Amazon ( AMZN ), which has also been seeing a big boom in

beauty demand in India, aims to identify emerging global trends

and bring in more brands, said Siddharth Bhagat, director of

beauty and fashion at the e-commerce company in India.

Retailer Shoppers Stop, which also pioneers

foreign labels, plans to open 15 to 20 beauty stores in each of

the next three years to boost its revenue from the segment to a

quarter from less than a fifth now, its beauty business CEO Biju

Kassim said.