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Premiumization and Natural Cosmetics Trends Shift the Market for Lakmé

The Indian makeup giant makes a statement with argan-oil-infused lipsticks.

MUMBAI — Lakmé, which has long led the Indian mass beauty category, has made a statement on the importance of the naturals cosmetics trend in India with the launch of its new argan-oil-infused lipsticks.

“Skin care and makeup is becoming this lovely hybrid space now and [we] are seeing a huge trend of naturals entering makeup as well. We [feel] the time is right,” Purnima Lamba, head of innovation at Lakmé Lever Pvt. Ltd., told WWD. “It almost seems like fashion designers are catching on that conversation and saying that they owe a debt toward sustainability. So we are doing that in the beauty business as well with argan oil getting into lipsticks.”

The range reflects the current Indian trend of brighter colors, with a range of bright scarlet reds, berry shades, oranges as well as the more traditional deep browns.

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The gold packaging, a first for Lakmé, ties in to its beauty statement for the year — liquid gold. The lipsticks are priced at 750 rupees, or $11.25, each.

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Long known for its sustainable pricing, as well as its ability to keep its finger on the pulse of Indian taste, the Lakmé brand has maintained its market lead in  India.

Lakmé is part of the large portfolio of consumer goods company Hindustan Unilever Ltd., and was hived off into a subsidiary in 2009 under Lakmé Lever Ltd. According to a statement issued by Hindustan Unilever at that time, “Growing disposable incomes and changing lifestyles have led to greater awareness about personal grooming, health and wellness — a trend that augurs well for the beauty and wellness services sector.” Hindustan Unilever’s other market-leading brands in India include Fair & Lovely, Pond’s, Dove, etc.

The $12.5 billion beauty market in India has seen double-digit growth for most of the last decade. Industry analysts note that, surprisingly, the growth in the last few years has come from color cosmetics, which historically has been a small segment in India.

Although Lakmé has always had real strength in the mass market, it has been bolstering its premium portfolio as well, with brands such as Lakmé Absolute and 9 to 5, its two premium ranges.

Lamba said, “If you take 9 to 5 and Absolute, its gathering momentum much faster. So its close to half my portfolio, in terms of value. Volume-wise, India is always a tale of many, many cities. In terms of volume, India’s largest-selling lipstick is still Enrich, which is priced at 250 rupees [$3.75],” she said.

Part of the success for the brand, Lamba explained, was the fact that there is a different price point for every customer. For example, lipsticks in the Absolute range are priced at 750 rupees, $11.25, and 9 to 5 are in the 450 rupees, $6.75, range.

The other brands that compete in the segment with Lakmé include Revlon, Chambor and L’Oréal Paris.

As global brands have intensified their campaigns in India, many local brands feared that they would lose customers. “That didn’t happen because we stayed contemporary,” Lamba insisted. “We stayed the trend leader and that’s why we didn’t lose that edge. Otherwise international brands, what else do they have to offer? They don’t know our consumer better than us, they don’t know the market better than us, so the only thing they offer is a trend that the Indian consumer hasn’t seen. And with Lakme Fashion Week, that entire edge has gone because we are the ones who set the trends in India.”

In September 2016, for example, the brand launched Illuminate 2.0, to celebrate shimmer and luminosity. The new line of Illuminate makeup included the Lakmé Absolute Illuminating Foundation, four new metallic shades of the Lakmé Absolute Shine Line and a Sabyasachi Collection, which included the Lakmé Absolute Sun-Kissed Bronzer, Lakmé Absolute Moon-Lit Highlighter and Lakmé Absolute Illuminating Shimmer Bricks. (Sabyasachi Mukherjee is one of India’s most prominent fashion designers.)

Over the last two years, lip colors have changed noticeably in India.

“Colors have really shifted,” Lamba also noted. “India used to be a country of browns and maroons, and today we are a country of reds and pinks. It’s not just the premium portfolio but across the board. Even in Enrich, my top-selling shades are now reds and pinks.

“It’s not just the young generation either. Everybody is getting more comfortable with brighter colors. We have also been designing shades that work for India. For instance, in this argan oil range there’s a shade called Ruby Velvet, which is designed for the yellowness of our skin. It is a difficult color to wear otherwise, but if you design it for the right skin tone then it looks more natural.”

Other products from the brand that the younger generation of customers endorses are daily use products that have additional benefits of being nourishing for the skin, for example, the club lip balm, which is a tinted product with a moisturizer.

“There are others that we have been introducing,” Lamba said. “For example, there is a very low usage of face makeup in India. That’s often because foundation is seen as something heavy, and that is bad for your skin and it is considered that customers don’t want to load their skin with products every day. So we introduced a product called Weightless Mousse Foundation, which feels like air on your skin; it’s really light and at the same time, it gives you incredible coverage and a soft finish because it’s a mousse. It covers all the flaws, which is what people wear makeup for, right?” Lamba explained that the approach to custom design makeup has been helping overcome the barriers to makeup in India and “hopefully we are inching our way up upward in terms of changing attitudes,” she said.

The other leading category for the brand is eye makeup, which has always been a big seller in India. According to figures from consulting firm KPMG, the eye makeup category in India grew at a compound annual growth rate of 29 percent from 2.1 billion rupees, or $31.5 million, in 2010 to 7.6 billion rupees, or $114 million, in 2015.

“India is the only country where lipsticks and kajal are such big sellers,” Lamba observed. “India is a very eye-focused market and, therefore, the more we design kajal that are long-lasting, the better it works. India loves colors that are intense, that is why Eyeconic does so well because we recently introduced a really intense black kajal and that’s a 22 hour stay,” she said.

As the brand turns toward naturals, it’s focus on premiumization appears to be key to growth. Results from Hindustan Unilvever each quarter in 2016 noted that Lakmé sustained its broad-based innovation led growth, with robust quarters on premium makeup, with the Lakmé Absolute and the 9 to 5 ranges strengthening the brand position.

Talking about the products, and the new trend, Lamba observed, that the frequency and use of makeup in India is still special occasion driven. “Six months ago we launched the shimmer line. It was a nice addition to the portfolio because it is designed for special occasions, so come wedding season people start reaching out for their shimmers.”

But occasion-wear makeup isn’t quite enough.

“This year our focus is to increase lipstick from a goodness point of view — so it’s not so much occasion led as nourishing for lips, which can be worn every day,” Lamba explained. “Its really about building convenience into the product this year, and building a pamper factor into it.”