The Rs 45,000 crore beauty industry became less than half its size in April and May when consumption came to a complete halt at the peak of the nationwide lockdown. Locked within their homes, the average Indian consumer did buy essentials such as haircare (shampoos) and skincare (soaps, face-wash) products, but didn't feel the need to use hair-colour, make-up or other colours cosmetics.
The month of June did see a shift in trend with the beauty segment growing modestly by 6 per cent, as per a Nielsen report. Will this growth trend sustain, considering that many parts of the country are still under lockdown and consumers are wary of stepping out?
Amit Jain, MD, L'Oreal India, says the industry will consider itself to be lucky even if it sees a low single-digit growth in FY21. "June came in strongly, but July has gone down. The reason I am being cautious is that there will neither be a V shape or U shape recovery, there will be a W shape (recovery). There will be peaks and drops in various states, depending on the spread of the virus. A lot of it is being driven by the ability of the local State Governments to manage the pandemic."
Jain is hopeful the second half of the current fiscal would see a higher growth rate. "The back half of the year should be positive, but the full year will not be positive as the previous quarter has weighed us down," he adds.
However, the consumer's desire to use a hair-colour or an advanced skincare product is very much there even though he/she is indoors, claims Jain. The beauty products company has significantly accelerated its digital investment in the past few months in order to reach out to its consumers despite the lockdown.
From offering e-consultations on the L'Oreal website to hair colouring tutorials on YouTube and hair and skincare guidance from its team of experts, digital intervention, according to Jain, has become a significant part of the company's strategy. "We had to hand-hold our customers for the new gestures. They were all using hair colour but their gestures were different. As opposed to relaxing on a salon chair, they had to do it themselves. The whole rise of DIY (do-it-yourself) has become a very big phenomenon," explains Jain.
In fact, encouraging consumers to 'do it by themselves' is being done by competitor Godrej Consumer too. To promote its hair colour brand during the lockdown, the company roped in Bollywood celebrity Karan Johar to post a DIY video on social media of him colouring his own hair. The video generated huge traction for the brand.
Apart from hair colour, L'Oreal India also introduced virtual try-outs for various colour cosmetics categories. "If you go on to our sites, you would be able to try out a lipstick or a mascara or a foundation virtually and figure out what it does for you. This allows (us) to move the entire consumption behaviour online. We are not quite there but we have made a lot of progress," explains Jain, who claims that going digital has helped L'Oreal access a new set of consumers. More than 18 per cent consumers on eCommerce in the last couple of months for beauty personal care have been first-time users.
L'Oreal India has also turned its salon partners into last-mile distributors. It has helped them put out online menus of the salon products they sell. "We managed to train more than 9,000 salon partners to move to a hyperlocal e-distribution model. We have also trained 50,000 hair-dressers in the last three months on what to expect when the consumers come back. They will be in a hurry so they will need express service, what are the hygiene standards they need to follow and so on."
Though L'Oreal India is doing its best to woo consumers to buy its premium offerings, Jain admits that it is the mass offerings such as Garnier, which is actually seeing demand. Even within Garnier, it is the lower-priced, smaller SKUs that are seeing higher traction. "This trend will continue till the end of this fiscal. We are headed for a year of belt-tightening among consumers as they re-prioritise expenditure."