Colour cosmetics: Growth dips to 8 per cent  ( June '13,2001, FE)

The growth in the Rs 250-crore colour cosmetics industry has dipped to single digit levels of about eight per cent in 2000-01, from 15-20 per cent in the previous year.

The decline in growth is mainly due to the extremely high excise duty levels — which have remained at 32 per cent since the last two years — as against a duty of 16 per cent attracted by other mass consumption items like soaps, detergents, hair oils and toothpastes. The growth in Nail enamels is seven per cent in 2000-01, while that in Lip colour is 10 per cent.

The growths of individual brands, however, shows a different trend: While brands like Revlon and Maybelline have grown at strong double-digit levels, Lakme has grown at a staid pace.

Revlon, as per ORG (value) urban only market for Lips and Nails, has grown at 57 per cent, and Maybelline at 31 per cent. Lakme and Elle 18 have registered growths of eight per cent and one per cent, respectively.

The growths have been higher in the case of Revlon and Maybelline, as these were taken on a smaller base, feel industry analysts.

In the urban Lips and Nails market, ORG reports a growth of over 10 per cent in 2000, which is two points behind the 12 per cent growth witnessed in 1999.

Brands such as Revlon and Maybelline are seen to be outperforming market growth by five times and three times, respectively, as per ORG’s figures urban plus rural (Lips and Nails only). However, a case of downtrading has been witnessed with the local unorganised sector bringing the growth rates down.

The market share of Lakme in Lip colour stands at 42 per cent in value, as per ORG. Revlon’s share is at 10.6 per cent, and that of L’Or‚al is 7.4 per cent. In Nail colour, Lakme’s share is at 30.5 per cent, while that of Revlon is 5.7 per cent. L’Or‚al’s share stands at 3 per cent.

Says a Hindustan Lever Ltd (HLL) spokesperson: “We will continue to grow ahead of market growth through innovative products which are in the pipeline.”

The growth, feel industry observers, can be fuelled by more and more performance based technological innovations. Maybelline, for instance, has recently launched Shine Free Liquid Foundation (Face Make-Up).
There have also been many initiatives with mini sizes in the market, especially in the nail category. These are proving successful short-term initiatives but do not appear a successful strategy for longer term value growth in the market place, feel industry observers.

“As a group, L’Or‚al is committed to introducing initiatives which are new, different, and better than what is on offer currently in the Indian cosmetic market. These initiatives represent the latest technology in lips, nails, face and eyes and are supported by strong media.This strategy represents the best way forward for both consumer choice and value growthin the urban market,” says Mr Mark O’Keefe, general manager, L’Or‚al Consumer Products Division.

Industry analysts expects the urban market (Lips and Nails) to grow at over 10 per cent this year, and the overall urban market for lips, nails, face and eye products at over 12 per cent growth.