Indian retailers such as Nykaa, Reliance’s Tira and Shoppers Stop may gain from the trade deal with the US as more American beauty brands may look to tap the import route into India. With duty-free access into India, experts say that imported cosmetics may also become cheaper intensifying competition for domestic players at the premium end of the market.
Premiumisation Pivot
A Nykaa-Redseer report values the Indian premium beauty market at $1.6-1.8 billion. This market is likely to double to $3-3.2 billion by 2028, the report says, driven by higher disposable incomes, increased aspirations and social media awareness. Apart from multinationals such as Hindustan Unilever and L’Oreal which operate at the premium end of the beauty market, there are D2C players such as Sugar Cosmetics, Plum etc, which also operate in that space.
Global Standards or Bust
Naveen Malpani, partner and retail & e-commerce industry leader, Grant Thornton Bharat, says that the challenge for domestic players especially D2C startups will be to position themselves as brands that are truly global in nature.
“Trade deals such as the India-US or India-UK agreements place renewed emphasis on premiumisation, product differentiation and brand credibility for domestic players. While multinational companies may have an advantage here, local brands may need to scale up on these fronts as consumers at the premium end may simply migrate to foreign brands if they find local brands unable to meet international standards,” he said.
Retail industry experts said that players such as Nykaa and Tira are seeing sharp growth in their cross-border e-commerce stores as these platforms stitch up distribution deals with foreign brands wanting to tap into India’s growing beauty market.
For instance, Nykaa launched more than 600 Indian as well as global BPC brands in FY25, nearly double compared to the 350 brands launched in FY24. This helped the retailer grow 25% year-on-year last fiscal. Significantly, nearly half of this number were international brand tieups reflecting a strategic focus on premiumisation, experts tracking the company said.