Steadily increasing disposable income levels have encouraged significant changes in the expenditure habits of the sizable Indian population. Favorable demographic factors and growing beauty consciousness have directed increased spending towards personal care products. The Indian personal care industry is poised for high growth, with an estimated volume growth rate of 9.6% by 2014.
Expanding demand for personal care makes India attractive for both domestic and foreign suppliers of personal care ingredients. The market was estimated at US$ 177 million in 2009 and is predicted to grow further. However, dominant market shares of top players make it difficult for new entrants to tap in on the possible opportunities. For example, in the case of surfactants, the leading three competitors collectively hold 73% of the total market volume.
Among global trends that have penetrated into the region are growing demand for green products, UV protection, and the requirement for better product performance. While Indian consumers have long exhibited a preference for herbal products, rising consumer awareness of the performance of active ingredients is a more recent development.
What does this mean for personal care ingredients suppliers to the Indian market? Their success will depend on the perceived benefits of the ingredients that they supply and the ease of their application in end-goods. Additionally, there is a need to keep costs low, due to competitive pressures from large foreign investors including ISP, Clariant, DSM, Croda or BASF. Absence of clear regulation and patent laws that would protect manufacturers’ investments is detrimental to market advancement.
Behind the opportunities lurk many market restraints and challenges. Established local suppliers and potential new market entrants will have to exert continuous efforts in market research to ensure that they offer better ingredients at competitive costs.
