NEW DELHI: South Korea's Innisfree Corp, Italy's Officina and Canada-based Faces Cosmetics are among a slew of beauty products makers that have lined up to cash in on a business boom in India.
A slowing economy and slowdown in consumer spending on non-essential products and services clearly haven't stopped Indian women from putting up their best face. They are splurging on beauty products, making cosmetic bands from around the world rush for toehold in this booming market.
Innisfree, Officina and Faces Cosmetics have approached the Foreign Investment Promotion Board to invest in single-brand retailing ventures in India, an official said. While Innisfree and Faces are opting for fully owned subsidiaries, Italian Officina has filed for a joint venture with New Delhi based businessman Arjun Khurana.
Shoppers Stop, the country's largest department store chain, meanwhile, plans to open franchisee stores of US-based Bobbi Brown Professional Cosmetics Inc, another person in the know said. Shoppers StopBSE 0.08 % already operates more than four dozen stores of beauty brands Mac, Estee Lauder and Clinique. Its managing director Govind Shrikhande says it plans to open 10 more outlets of these brands this year. He refused to comment on Bobbi Brown.
All those companies are trying to cash in on the huge appetite for foreign cosmetic brands in India amid growing spending power among the country's large section of women, thanks to the increasing number of ladies entering the corporate workforce every year.
And they seem unmoved by the overall slowdown. At Shoppers Stop, for example, overall same-store sales are growing about 10% a year while women-oriented products are growing by 25%.
Consultancy firm Technopak Advisors says working women tend to spend 35% or more of their income on themselves, splurging on everything from cosmetics to cars. It estimates that about 10 million urban women in the age group of 20-40 years are employed in corporate managerial jobs and this number is expected to increase five fold to 50 million by 2020.
S Korea's Innisfree plans to invest `70 crore to sell its beauty and cosmetic products in India. Italy-based Officina holds 51% stake in its joint venture, which has proposed to invest about `1.7 crore to open Bottega Di LungaVita-branded stores and plans to increase the investment to Rs 7 crore over the years. It plans to start by opening two stores in New Delhi followed by outlets in Mumbai and other major cities.
Faces Cosmetics, which is currently sold through about 20 franchisee stores in India, now plans to open about 20 company-owned stores each year for the next few years.