India to be fastest growing beauty and personal care market by 2028

MUMBAI: India is poised to emerge as one of the most influential markets in the beauty and personal care sector, surpassing established giants such as China, the United States, Japan, and South Korea.

According to a recent report by Nykaa, an online beauty and fashion marketplace, India’s beauty and personal care market is projected to grow at an impressive rate of 10-11 per cent annually, reaching a valuation of $34 billion by 2028.

The growth trajectory is significantly higher compared to other prominent markets: China is expected to grow by 4-5 per cent, while the US, Japan, and South Korea are anticipated to see growth rates ranging from 2 to 4 per cent.

Several factors contribute to this remarkable growth. E-commerce is identified as the primary driver, with projections indicating a compound annual growth rate (CAGR) of around 25 per cent for this segment.

The increasing aspirations and disposable incomes of Indian consumers are fostering a market for premium beauty products, which is expected to reach $3-$3.2 billion by 2028.

The shift towards premiumisation reflects a changing consumer profile that values quality and brand prestige.

Role of social media

Furthermore, the role of social media in the beauty sector cannot be overstated. With an estimated 520-560 million users in India by 2023, social media platforms are playing a crucial role in demystifying beauty expertise and influencing consumer choices.

The democratisation of information enhances consumer awareness and facilitates informed purchasing decisions, further propelling market growth.

The report also highlights significant shifts in distribution channels. Online trade channels for beauty and personal care products are projected to grow at a CAGR of 25 per cent, reflecting changing shopping behaviours.

In contrast, the unorganised offline trade’s share is expected to decrease from 55 per cent in 2023 to 35 per cent by 2028.

The evolution underscores the growing preference for organised, reliable retail channels which cater to the sophisticated needs of today’s consumers.

As Anchit Nayar, Executive Director and CEO of Nykaa Beauty, aptly summarises, “Our report clearly shows a market poised for extraordinary growth, driven by premiumisation, technological advancements, and a new generation of discerning consumers.”

India’s beauty and personal care market is not just on the cusp of transformation; it is set to redefine global benchmarks, reinforcing its status as a leader in this vibrant industry.