Body Shop India Adds Missing Element

A recent product launch was inspired by India and uses coconut oil, an important local ingredient.

Dia Mirza unveils The Body Shop's Rainforest Coconut Hair Oil.

MUMBAI, India — Taking a cue from the fact that more than 50 percent of the hair-care market in India is about hair oil, The Body Shop has come up with a new solution.


“Hair oil as a category was missing,” Shriti Malhotra, chief operating officer of The Body Shop India told WWD, speaking about its recent product launch that was inspired by India and uses coconut oil, an important local ingredient. “It is part of a local tradition and hair is the most important asset in India. Coconut oil is considered extremely important for long, shiny hair.” He continued,  “Hair is one of our biggest focus areas of the year. We’re doing a big customer contact strategy with hair oil. There is a lot of sampling, trials and we’re really doing some great social media campaigns with this.” Without disclosing figures, Body Shop executives said consumer reception has been positive.

But coconut oil? Really? It is the stuff of household routine care and is sold by several established Indian companies. One Indian company Marico, for example, is estimated to have garnered 25 percent of the coconut hair oil market. Other companies such as Dabur Ltd. also play in the segment.

“In the last five years, the hair oil industry has been registering healthy double-digit growth,” Minoo Phakey, marketing head of Hair Oil in Dabur, India, observed. “This is mainly due to increasing hair damages  caused by lifestyle and environmental changes. The new generation has experimented with hair treatments and are now embracing hair oil all over again to undo some of the damage and provide that much-needed nourishment to their hair.”

The fear of chemical treatments for hair casts a strong shadow over the hair products market and strengthens the tradition of hair oil even further. The consumer packaged hair oil industry in India generates sales of about 3.8 billion rupees, or $718.5 million, and is growing at a rate of 30 percent a year.

The Body Shop’s new offering, at 645 rupees, or $12.20, for a 200-ml. bottle is far above the market price, but comes with its own differentiation, primarily its high performance positioning with vitamin E, pracaxi oil and eco certification. “With The Body Shop products, there will always be some price-points difference,” she said, “and finally the strength of the product is how the product performs — its credibility, its natural products, how it is sourced and its efficacy. The customer understands the difference.”

By comparison, Marico’s Parachute oil is priced at 64 rupees, $1.21, for a 250-ml. bottle. Several local brands hope to take market share by offering lower prices and updated packaging. Marico generated a 38 percent growth in coconut oil sales from 2011 to this year. The company has a turnover of  2.7 billion rupees, $553 million, for all its products. Marico has built widespread distribution across India.

The new launch drew additional attention, thanks to Bollywood actress Dia Mirza, who is The Body Shop’s brand ambassador in India. She inaugurated the launch of the product and also of the new Pulse store format, which provides additional services and customer amenities beyond the Body Shop norm.

The brand, overall, has been blazing its own path in India, where beauty stand-alone stores have not been the norm, and certainly not on this level by a global brand. There are now 90 The Body Shop stores all over India, with a target of 100 for the coming months.

The excitement about The Body Shop’s Pulse concept is also just beginning, with the top three performing stores having adopted this format in Gurgaon, New Delhi and Mumbai. “Going forward, all the stores will be in the Pulse formats. It has become very important to match the consumer expectations and really helps in getting the pulse of what they want,” Malhotra smiled.