Beauty and personal care may become a $34 billion market in India by 2028

Beauty and personal care (BPC) is projected to become a $34 billion market in India by 2028 from about $21 billion currently, primarily fueled by the online growth of core categories, a report said.

The Asian nation is growing at a compound annual growth (CAGR) of about 11%, the fastest growing beauty and personal care (BPC) market in the world, the ‘Beauty Trends Report’ by Nykaa and Redseer said.

In comparison, the beauty market in China is growing at 4-5%, followed by the US at 2-4% and Japan and South Korea at 2-3%, the report added.

The report noted that within BPC, consumer preference and demand are shifting from personal care to beauty, with the skincare segment projected to grow at 13%, followed by makeup (12%), haircare (11%), and fragrance (10%).

Bath and body, oral care and wellness are projected to grow in the mid- to high single digits, the study said.

The report said rising discretionary spends, democratization of information through social media, easy access through e-commerce, growing preference for premium products and new formats, ingredients and concerns are fueling growth of the sector.

“The beauty sector in India is experiencing a dynamic shift towards premiumization, where luxury is no longer confined to price alone. Today, premiumization encompasses an expanded beauty basket, knowledge and regimen, influenced by a highly discerning consumer with evolving desires and an enriched beauty vocabulary,” Falguni Nayar, founder and chief executive officer at Nykaa, said in the report.

Anil Kumar, founder and chief executive at Redseer Strategy Consultants, said: “Social media is not only boosting consumer awareness but also transforming how they engage with beauty categories like makeup, hair care, skincare, and fragrance.”

“India has seen a surge in global and local brands catering to diverse consumers, but few have reached the ₹100 crore revenue-mark. With the beauty market nearing a $34 billion value by 2028, there are significant opportunities to tap into emerging consumer segments nationwide,” Kumar added.

The report noted that global beauty brands, including Estée Lauder, L’Oreal, and Charlotte Tilbury are doubling down on their India business.

Brands such as Estee Lauder have made ‘product minis’ available in countries such as India and Indonesia “to enable brand trials and offer accessible entry price point for consumers,” the report said.

There has been a “proliferation” of homegrown brands such as Kay, Forest Essentials, d’you and WishCare, with such firms raising $2.6 billion in funding over the past 10 years, the report said, adding that there has been a slowdown in venture capital funding over the past 12-18 months.

The report also said that while South Korea, Italy and China remain the global manufacturing hubs for beauty and personal care products, contract manufacturing in the sector is booming in India.

It counted up to 700 contract manufacturers of beauty products, mostly based in North and West India.

“These have evolved though co-innovation, quality control enhancement and adoption of advanced processes,” the report said, adding that the make-up manufacturing ecosystem in India is expected to be at par with China, the US and the European Union by 2030.

The study also found generative artificial intelligence (genAI) and big data analytics empowering platforms and brands to deliver personalized experiences.

While genAI beauty guides are addressing complex consumer searches, AI is simplifying decision making with detailed skin analysis, the report said, adding that leading brands are using genAI for quick and effective ad generation.