Canadian firm Faces Cosmetics set to enter Indian mkt
Canadian firm Faces Cosmetics is planning an "aggressive roll out" of its franchise stores across the country to sell its branded cosmetics, skin care and anti-ageing products.
NEW DELHI: Seeking to tap Indians' growing interest in personal grooming products amid increasing income levels, Canadian firm Faces Cosmetics is planning an "aggressive roll out" of its franchise stores across the country to sell its branded cosmetics, skin care and anti-ageing products.
Faces Cosmetics, which signed a Memorandum of Understanding with an Indian partner in April for its foray into the country, said in a statement that discussions were progressing well and it was also talking to a potential investor to raise funds for its planned operations here.
"The potential investing party has recently flown to Canada to undertake detailed due diligence on the company. Negotiations are continuing and the Board expects to conclude the terms of the investment by the end of June," Faces Cosmetics Plc, the UK-listed registered holding company of Faces Cosmetics, said in a statement to the London Stock Exchange.
The company initially plans to test waters by allowing the the Indian partner to open company-owned stores, followed by a more aggressive roll out of franchised stores later.
The company mainly operates through a franchise model whereby third parties acquire the right to operate its branded retail sites within shopping centres and other retail locations.
Apart from offering an extensive range of cosmetic, skin care and anti-ageing products, Faces Cosmetics is now concentrating on offering aesthetic treatments through the stores it is opening within shopping centres.
Faces is the latest entrant in an array of foreign players planning a significant presence in the personal grooming products market of the country, which is already flush with a host of domestic as well as foreign players.
Global giants like Estee Lauder, L'Oreal and Chanel are eyeing the upper and upper-middle class consumers, while betting on the huge growth potential of the market here.
India's beauty market is barely 10 per cent of the global market of over USD 36 billion, but low per capita spending on these products so far offers impressive growth opportunities, believe market experts.
According to Euromonitor, which tracks business growth opportunities across the world for European firms, India's USD 3.5 billion market has grown over 60 per cent from the late 1990s.
Besides, MNCs like L'Oreal are believed to have studied the domestic market for over a decade before coming up with their launches. Having arrived in 1990s, L'Oreal is reaping the first-mover benefits and recorded a jump of over 40 per cent in its India sales last year.
Among others, Chanel recorded 50 per cent growth in its India business last year and expects this to continue in coming years.
With the fourth-largest and second-fastest growing major economy in the world generating good income and offering a rather unpenetrated market, both Indian men and women have woken up to the benefits of personal care and grooming, which the companies like Faces are seeking to cash in.
Faces has an extensive product line comprising over 1,000 individual items in different product categories sold through 56, mainly franchised, retail outlets in four countries like Canada, Mexico, the US and Ireland and the next key area of focus is definitely India.
Faces Cosmetic Plc, the UK-based holding firm, had raised 1.2 million pounds (nearly Rs 100 crore) from Alternative Investment Markets (AIM) in early September 2006.
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