With the local market for cosmetics forecast to be worth $20 billion by 2025, Indian conglomerate Tata Group plans to reclaim ground in the beauty business it exited 23 years ago.
Beauty products will be “a key focus for us” from now on along with footwear and underwear, Noel Tata, non-executive chairman of Trent Ltd., said. “Extended product line and experimentation with formats for these products are in the offering as we see these as growth areas in retail.”
According to data from Statista, India’s cosmetics and beauty market is estimated to nearly double by 2025 from $11 billion in 2017, aided in good measure by online retailers led by Mumbai-based Nykaa that saw a blistering growth during the pandemic. The startup helped millennial and Gen-Z consumers buy high-end beauty brands as well as access tutorials and testimonials from social media influencers.
Simone Tata helped create Lakme in 1953 as the country’s first cosmetics company. In 1998, the group sold it to Unilever Plc’s local unit. It’s only now that the group has begun raising its game again.
According to data provided by the company, the revenue from the beauty, footwear and underwear category is just about $100 million for Trent while the market is about $30 billion now.
“These three segments would be low-hanging fruits for Tatas at a time when they are aggressively expanding stores and distribution channels,” said Kranthi Bathini, equity strategist at WealthMills Securities Pvt. “While competition is high in these segments, the pie itself is expanding rapidly as consumption bounces back in the economy.”
The $103 billion conglomerate, under Trent, is considering building new lines of in-house cosmetic brands that can be a vehicle of growth, Tata said. These products can be retailed through existing large-sized outlets under Westside-Trent’s flagship chain of retail stores-or via standalone stores and through digital channels, he added.
