India’s personal care products market was estimated at $43 billion in 2015, and the country’s 170 million Muslims accounted for $4.2 billion of this total. There is a clear demand for halal-certified products, which has promoted the rapid growth of new lines such as Iba Halal Care. What opportunities are there for other new players to enter India’s halal personal care products market?
The Mainstream Market
India’s personal care products market was estimated at $43 billion in 2015 and is projected to grow by 10 percent cumulative annual growth rate (CAGR) to reach $62 billion by 2020, according to national statistics and BMI Research estimates. Women’s spend on cosmetics was estimated at $1.6 billion in 2014 and is projected to grow by 11 percent CAGR to reach $3 billion by 2020, according to a study by Intecos-CIER.
Rapid growth in India’s cosmetics market is fueled by increasing demand for beauty products among the middle class and the increase in department stores, underpinned by rapid GDP growth, which has exceeded 5 percent annually since 2009.
India’s cosmetics market has historically been dominated by leading domestic players, notably Dabur India Ltd. and Marico. Dabur India Ltd. is the largest FMCG (fast-moving consumer goods) company in India, with 2015 revenues of $1.3 billion. It is also the most popular, due to its Dabur Amla and Vatika hair care brands, as well as its Fem skincare line. Marico is a domestic health and beauty care products company, with revenues of $938 million in 2015. Parachute is the company’s flagship brand, but it also manufacturess coconut-based hair oils under its Parachute Advanced brand.
Unilever is one of the leading multinationals in India, with its Indian subsidiary earning revenues of $5 billion in 2015. It leads with a range of personal care product lines including Lux, Clinic Plus, Lifebuoy, Fair & Lovely, Dove, and Sunsilk.
In India, Muslims represent an estimated 14 percent of the population, based on a 2001 government census, implying close to 170 million Muslims in 2014. Muslims represent a key consumer group and spent an estimated $4.2 billion on personal care products in 2014. This spend is projected to grow by 9.4 percent CAGR, reaching $4.6 billion by 2015 and $7.3 billion by 2020, according to DinarStandard analysis.
There is strong and growing demand among Muslims for halal personal care products free from non-permissible ingredients. Halal standards are increasingly being adopted to accommodate cosmetics products; for example, in 2015 the Emirates Standards and Metrology Authority launched a certification mark for halal cosmetics, following the Department of Standards Malaysia, which launched standards on halal cosmetics in 2008.
Challenges and Considerations
The Muslim market opportunity is highly attractive; however, there are three key considerations to growing a product line for Muslims.
Gaining credibility with the Muslim consumer
There is a lack of awareness among India’s Muslim consumers that mainstream cosmetics may contain haram ingredients. In addition, halal fraud scandals have rocked consumer confidence. In this context, halal certification is vitally important to establishing trust with the Muslim consumer.
According to Mohammed Mansoor, who manages two retail outlets selling halal products in Bangalore, “Halal [has] still not become well accepted in India and Muslims [hold it] in suspicion due to some earlier frauds in domestic markets.”
Hence, while gaining certification is a key step, it must be supported by open communication about certification, and proactive marketing.
Targeting non-Muslim consumers
Many of the attributes of halal cosmetics, such as the avoidance of harmful ingredients, would appeal to non-Muslims as well. Marketing campaigns should include greater emphasis on product qualities, with more focused, targeted messages to Muslims on the halal attributes of the product.