The new face of beauty

The year is far from over but it has already proven to be a big one for the beauty and skincare market in India, especially direct-to-consumer (D2C) brands. While L’Oreal picked up Innovist’s portfolio of brands such as Bare Anatomy, Chemist at Play and SunScoop earlier this year, Wipro Consumer Care & Lighting acquired a majority stake in Dermatouch and Nykaa picked up Aminu in August. Luxury Ayurvedic player Forest Essentials too made its way into the Estée Lauder bouquet of brands earlier this year.

In 2025, Hindustan Unilever had picked up Minimalist, Dabur went on to pick up RAS Beauty and Godrej Consumer acquired men’s grooming brand Muuchstac.

In the last three years alone, more than Rs 17,000 crore has been spent acquiring Indian beauty brands, estimated Sarvangi Shah, founder, Noya Beauty Works, in a LinkedIn post.

Experts note that this trend of D2C acquisitions is gathering steam because of the huge market opportunity. A recent RedSeer report predicts that by 2030, India will become the fourth-largest beauty and personal care (BPC) market globally, growing to $40 billion. Segments like face cleansers, creams, serums, sun care and body wash are the big growth drivers in the category, with channels like quick commerce and e-commerce boosting access to consumers not just in metros but also in tier-II markets and beyond.

It is not just that more consumers are taking to skincare; the real growth story is that the same consumer is now consuming far more products than ever before, points out Nitika Sharma, assistant professor, marketing, IMI Delhi. “We have moved from two or three basic products to three-step, five-step and even seven-step skincare routines, involving cleansers, toners, serums, targeted treatments, moisturisers, sunscreens and more. The growth potential is significant because skincare is increasingly becoming a structured daily routine rather than a single-product purchase,” says Sharma.

The D2C opportunity in the category differs from others such as food, health or accessories. Skincare sits at an intersection of beauty, wellness, self-expression and everyday consumption. “For large companies, acquiring a successful D2C skincare brand can mean acquiring not merely a product portfolio, but a relationship with a digitally engaged consumer that can potentially be extended across multiple products and routines,” she adds.

Shekhar Suman, co-founder of Brandshark, notes that large FMCG and beauty companies are buying D2C skincare brands because acquiring relevance is far quicker than building it. “These brands offer science-led formulations, proprietary R&D, younger digital audiences and the ability to launch products in weeks rather than years,” he says.

Skincare itself is particularly attractive because gross margins can reach 65-75%, successful products encourage habitual use and replenishment, and customers are less likely to switch once they find a routine that works. This makes the category a rare combination of high margins, repeat purchases and strong brand loyalty. 

More than skin deep 

Such acquisitions are a win-win for both the brands involved. While large companies benefit from the agility, expertise and customer relationships that D2C companies have nurtured, the latter gain from the scale, distribution and capital that MNC firms offer. “Scaling beyond the digital ceiling of roughly Rs 150 to Rs 500 crore also requires complex and expensive offline distribution, while rising digital advertising costs and quick-commerce commissions can squeeze margins,” remarks Suman.

Traditionally the Indian skin care market was largely confined to fairness and cold creams. Though the market also had many niche products, the penetration was low, and hence was relatively ignored by MNC players, observes Santosh Sreedhar, partner,

Avalon Consulting. He notes that players like L’Oreal too have struggled to drive penetration in the category.

New-age and specialist beauty firms such as Minimalist, Forest Essentials and Innovist have succeeded where the MNCs and large Indian FMCG players have struggled. “Larger companies are recognising this and are acquiring successful brands in this market that they can grow further using their distribution strength,” explains Sreedhar. He notes that the skincare market is poised to grow annually by 14-18%. This means it is likely to double in the next five years. Premiumisation and specialised product offerings that address areas such as acne, pigmentation and ageing are enabling higher growth.

Experts add that global beauty trends are also accelerating this growth. While K-beauty or Korean beauty has become popular especially among Gen Z consumers, Chinese beauty and Philippine beauty regimes and products are also gaining traction. India’s rich ayurvedic heritage too continues to have strong consumer relevance and is increasingly being presented in contemporary formats.

The real challenge for D2C brands then begins after the acquisition. The risk lies in adding capital, supply chain strength and distribution without corporatising away the agility and authenticity the large firms paid to acquire.