Cosmetic battle intensifies as Birla & Ambani vie for space on your dressing table

As dozens of beauty brands have popped in the past few years and global companies too begin to find promise in India, India's retail giants are betting big on the beauty and personal care segment. They are launching their own beauty businesses as well as snapping up smaller brands which pitchforked into prominence through e-commerce.

Ananya Birla, daughter of billionaire Kumar Mangalam Birla, on Wednesday announced entry into the fast-growing beauty and cosmetics space with the launch of a new venture. The 30-year-old Birla, who launched a microlending venture at 17 and also sits on the board of the $62-billion Aditya Birla Group's apex strategic body, will come out with a range of beauty and personal care brands nationally through 2025, a statement said.

Ananya's company, Birla Cosmetics, will launch the beauty and personal care brands this year. The move will put her in direct competition with another billionaire daughter, Isha Ambani, of Reliance Industries chairman Mukesh Ambani. Isha heads the beauty and lifestyle segments at Reliance. In Feb 2023, Reliance launched Tira, a platform that sells makeup, skincare, haircare and fragrances. The Birla venture will also be competing with other biggies such as Tata, HUL and L'Oreal. The Tata Group runs its beauty business called Tata Cliq Palette.


Also Read: Kumar Mangalam Birla's daughter Ananya announces new beauty and cosmetics venture

A company statement said rising disposable incomes, deeper e-commerce penetration and growing openness among consumers are leading India's beauty. Personal care market is expected to grow at 10-11 per cent annually and the sector is expected to be a USD 34 billion opportunity by 2028.

The great Indian beauty boom

The Indian beauty and personal care market is poised to reach $34 billion by 2028, up from $21 billion now, driven by a surge in online penetration and a growing preference for high-quality, premium beauty products, according to a report by Nykaa and consulting firm Redseer. The online channel, as the fastest-growing segment, is expected to expand at a compound annual growth rate (CAGR) of approximately 25%, while the organised offline channel is anticipated to grow at 14%.

The ‘Nykaa Beauty Trends Report’, released a few months ago, noted that rising discretionary spending, fuelled by increased disposable income, expanded e-commerce access, and product innovation, are some of the other key trends driving momentum in this sector. Rising aspirations and higher incomes among Indian consumers will propel the market for premium beauty, expected to reach $3-3.2 billion by 2028, it said. Further, it highlighted a notable shift in consumer demand from personal care to beauty products in India, comprising skincare, makeup, haircare and fragrance categories.

A report by Redseer Strategy Consultants and Peak XV estimated last year that India’s beauty and personal care market will expand the fastest among comparable countries by size. The compounded growth rate is projected to be 10% between 2022 and 2027, which will take the market to $30 billion. India, expected to account for nearly 5% of the global growth opportunity, has a per capita category spending of $14, lower than China ($38) and a fraction of the US ($313). That is the definition of a big opportunity. For L’Oréal SA and Shiseido, two of the world’s largest cosmetics companies, India is a key growth driver.

The beauty segment is shifting fast

India's expanding e-commerce sector has led to democratisation of the market and explosion of brands which is truer for the beauty and personal care segment. As e-commerce removed the high entry barriers which existed in offline retail and Gen Z opened up to experiment with new products as well as sought more personalised ones, India witnessed an explosion of beauty and personal care brands.

“Online platforms have become the preferred channel for purchasing luxury beauty products, with growth nearly double that of offline channels.,” Roosevelt Dsouza, head of customer success, FMCG, NielsenIQ India, has told ET. “This shift is driven by unique product offerings from small and mid-sized manufacturers, particularly on e-commerce platforms.”

The sudden growth in the number of e-commerce brands has led to new-age brands facing challenges on scaling up beyond a point or crumbling under the pressure to turn profitable. Many brands are now jumping onto the quick commerce -platform to tide over these challenges. However, consolidation has also begun in the sector as big brands have realised the power of personal connect with the consumer that small brands enjoy.

Recently, HUL, India’s largest FMCG company, announced the acquisition of a 90.5% stake in Jaipur-based direct-to-consumer (D2C) beauty brand Minimalist. The deal values Minimalist at a pre-money enterprise value of Rs 2,955 crore.

A leader in mass market brands, HUL is trying to capture growing demand for niche, premium beauty brands. This acquisition underscores HUL’s focus on premium, high-margin segments, aligning with parent company Unilever’s global strategy to tap into low-penetration categories. HUL has been reorganizing its beauty and personal care (BPC) division to sharpen its focus on premium offerings. Currently, this division contributes nearly a fifth of the company’s revenue and about a third of its profits. Industry executives have told ET that various brands are looking at such options, but those conversations are in early stages. India’s beauty market is becoming increasingly competitive, with focused brands like L’Oréal, Mama Earth, and Nykaa collectively holding 33% market share. This share is expected to grow to 42% by 2027, while traditional players like HUL and Procter & Gamble could see their share drop by 900 basis points to 58%, according to a report by Redseer Strategy Consultants and Peak XV Partners.

The vast promise of the beauty and personal care business became apparent when in 2023 the fast-growing market attracted India's largest retailer Reliance Retail Limited, which launched its omni-channel beauty platform Tira, after the sudden rise of new-age brands Nykaa and Myntra. Now yet another Indian conglomerate is ready to bet on this segment. With Ananya Birla's venture, India will have two young entreprenuers from India's leading business families competing in the same space.