Global cosmetic giant Estee Lauder Companies has approved a 'massive investment' in India to capture the growing demand from aspirational consumers and penetrate into the mass market by providing luxury products at affordable price points, president and chief executive officer Stéphane de La Faverie said during the Barclays Consumer Staples conference. The comments come as the company is targeting its investments in consumer-facing areas to fuel growth.
Faverie did not specify the quantum of investments earmarked for India. Estee Lauder declined to comment.
In India, The Estée Lauder Companies sells a wide range of beauty products under its namesake brand, Estée Lauder, and many of its other prestige brands, such as MAC Cosmetics, Clinique, Bobbi Brown and Jo Malone London. India is the largest among the emerging markets.
"In India, one of the winning strategy has been the deployment of small sizes. The ability for a consumer to get access to a luxury product is to limit it. In India, 90 percent of the market is mass and 10 percent is prestige. Prestige is growing faster but has very limited number of consumers. So, the ability to bring the luxury products at a mass affordable price point, with innovation, is going to be critical for us to win in the market. We are committed, we have just approved a massive investment in India to expand because the market has a tremendous momentum," Faverie added.
Apart from ELC, other international beauty brands such as Avon, Burberry, Calvin Klein, Christian Dior, L’Oreal, Max Factor, Maybelline New York have been present in India for a long time. The Indian beauty and personal care market, which accounts for less than 5 percent of the $532-billion global industry, is not as large as compared to the United States and China’s billion dollar markets. However, global brands are lured by the “growth potential”.
The India beauty and personal care market size was valued at $28 Billion in 2024, as proliferation of smartphones and internet access empowered consumers to explore and purchase a wide range of beauty products online, boosting the market expansion.
Other than India, ELC also has business in other Asian markets such as Japan and Korea.
Faverie said that emerging markets are set to contribute 15–16 percent of Estée Lauder’s global business in the foreseeable future, led by India, highlighting that these markets are already “very profitable” but require significant upfront investment, making India central to the company’s growth strategy. Currently, emerging markets contribute 10 percent to the company's global business. He flagged a tremendous growth potential in these markets especially when sales in Europe and Americas are facing headwinds amid consumption slowdown.
The luxury cosmetic maker saw its fourth quarter organic sales plunge 13 percent year-on-year, hurt by the ongoing weakness in the US and China markets and other European markets like France and Germany. During the quarterly results, ELC said it would reduce the inventory and dial down on the discounts to mitigate the tariff impact.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
