The image of scantily clad nymphs swirling concoctions in large pots and preparing ingredients with mortars and pestles amid a sylvan setting takes you to a magical, make-believe world where beauty products contain the goodness and bounty of Mother Nature. That television campaign, created for the ayurvedic luxury brand Forest Essentials, reiterates the transformative power of ayurvedic formulations and ingredients. The brand set up by Mira Kulkarni, Chairman and Managing Director of Mountain Valley Springs (the parent company), is well-known for its huge (and, at times, bespoke) portfolio, as is Rajshree Pathy-Vivek Sahni's Kama Ayurveda. Both have put their respective brands on the global map and the overall industry outcome is not unsatisfactory. Consider these numbers: India is emerging as a key player in the global arena, exporting over 300 products across 20 categories, to more than 200 countries. The organic products market is growing at a compounded annual growth rate of 25 per cent and is expected to touch Rs 10,000-12,000 crore by 2020, according to a report by ASSOCHAM and Ernst & Young.
Global brands are still sought-after all over the country. But the domestic market has slowly evolved over the past few years, giving rise to a new breed of buyers. Discerning consumers know what they are buying, how the products are made and what the impact is on the environment. They are also looking for what they perceive is unique and essentially Indian, largely an endorsement of the desi brands with global success stories. The traction is growing, according to Rimpie Panjwani of Mintel, a global market research firm that has published several reports on the Indian beauty and personal care market. "The Mintel Global New Products Database indicates that natural claims and botanical ingredients are a must-have in facial skincare products. In fact, 68 per cent of these products launched in India between January 2016 and June 2019 claimed to be botanical/herbal and 22 per cent claimed to be all-natural," the senior analyst says. Without market demand, companies would not have entered that space.
This growth has been partially fuelled by high Internet penetration, which, in turn, has enabled people to stay in touch with global trends and local brands and demand the kind of products they are keen on. Consumers are becoming more knowledgeable even though they are sitting in remote corners of the country. Their growing disenchantment with all things chemical, coupled with a general desire for squeaky-clean natural products, has changed the course, and it is easy to see why the clean-and-green segment has exploded. Ingredients such as turmeric, rosehip, kokum, olive oil, vanilla, aloe vera and the likes are eagerly sought for their cosmetic and therapeutic value, and any product that comes with 'no chemicals' or 'no synthetic ingredients' tag will sell.
There is an obvious danger here as many of these natural beauty brands offer nothing more than the latest buzzwords to lure unsuspecting customers. In the absence of a proper labelling mechanism (it is not mandatory to specify all ingredients that a product contains) and stringent, national-level certifications, most Indian brands do not fit into the neat descriptors for which clean beauty is lauded today. Moreover, the brands abuse the law in spirit when they comply with definitions of organic and natural in the most basic sense but fail to be completely honest with the already befuddled consumers.
With buzzwords like natural, organic, herbal and vegan (see Beauty Decoded) are being bandied about indiscriminately, the buck stops with the consumer who must figure out what works best for her and make an informed choice. A better insight into the industry and its jargon also helps. For instance, 'natural' is nothing more than ingredients obtained from nature, but they are not necessarily chemical-free. Organic, on the other hand, indicates that the ingredients have been grown without pesticides and synthetic fertilisers and do not contain antibiotics or growth hormones. Although several brands claim that their products are "certified organic or natural", it is important to understand the parameters used by that specific certifying agency (see Beauty Benchmarks).
In spite of all cautionary notes, those looking for clean and homegrown beauty products are spoilt for choice. There are the veterans - Forest Essentials, Kama Ayurveda, Shahnaz Husain, Biotique and the likes. And then there is a whole new bunch with widely varied portfolios. For example, there is Organic Harvest, a mass-market organic brand that has shaken up the space a la Himalaya in the herbal arena. "Our products are available in 20,000-plus outlets across Tier-I and Tier-II cities. With more than 30 per cent growth in revenue and brand presence in 2017/2018, we are expanding at a thrilling pace," says CEO Rahul Agarwal. The brand is priced slightly above those in the non-organic space and is currently working on a high-volume business model.
Others like SoulTree, Organic Riot, Omorfee, Plum, Just Herbs and Just B Au Naturel have turned the segment on its head with price points which make them premium brands. With more than a little help from e-commerce channels such as Nykaa, Sephora, Vanity Wagon and Amazon, these brands have managed to reach out to conscious consumers who are willing to pay a lot more to buy products which they believe are clean and sustainable.
Plum is a vegan brand launched in 2014 with just 15 products. The concept was to keep out all ingredients of animal origin. Accordingly, the brand managed to find plant-based alternatives and also launched Phy, a luxury vegan skincare sub-brand for men. "We take natural actives (ingredients which can change skin structure) and mix them with good science," explains Shankar Prasad, the founder of Plum. "However, we understand that certain ingredients like green tea or aloe vera will give you a potency that science can never replicate. We also focus on responsible packaging as the thinking consumer has started to comprehend the impact of her consumption on nature." Nearly two-thirds of the brand's business is done online, but it also sells through 220 outlets across the country. "We are not a mass brand. Hence, our strategy has to mirror that focus," adds Prasad.
Not all brands wanted to rush in, though, until the market was ripe. Take, for instance, the biotechnologist couple, Trishla and Naman Adlakha. Four years ago, they had started an organic and chemical-free brand called Omorfee in Italy but only brought it home when they felt the consumption pattern changing.
"We launched the brand as we believe in the sanctity of body, mind and nature. We did our own formulation in 2015 and launched with just four body butters in luxurious but sustainable packaging," the duo recalls. "Our products have no parabens (synthetic chemical compounds), silicones, sulphates, artificial colours or fragrances, and we use essential oils which are pure and steam-distilled. The rest comes from overseas markets to maintain the quality of the final output." The ingredients used by the company cost anywhere between Rs 5,000 and Rs 1,75,000 per kg. All products go through rigorous checks at an international level before they are deemed fit for sale and the herbal preservatives ensure two-year shelf life. The brand is halal-certified and will soon earn a vegan certification.
The quality pledge has worked out well. Omorfee currently has a portfolio of more than 120 retail products besides a professional range. It is also growing at 400 per cent year on year, mostly due to exports, but domestic sales are also picking up. The brand has been selling on Amazon India and Nykaa, but from October onwards, it will be only available at Sephora, the cosmetics retail chain owned by LVMH Moet Hennessy Louis Vuitton. Its most popular products include anti-ageing serums, scrubs and facial creams, all priced between Rs 500 and Rs 5,000.
Although brands like Omorfee try to amalgamate the goodness of nature with the latest technology and manufacturing best practices, the credibility battle is far from over for their peers. The stringent certification process carried out by international agencies is one of the biggest hurdles in this area as no one in India has the authority to certify either ingredients or finished products. When Vishal Bhandari set up SoulTree in 2013, few were aware of natural and organic beauty products, and there was no authenticated brand in India. "Now, we are a BDIH-approved brand, and all our herbs come from farmers who grow organic products but may not be certified. That is a big problem. Besides, certain products have to be imported as Indian suppliers do not have the documentation available to comply with international guidelines," he rues.
Purearth's Kavita Khosa concurs. "I work with several farmers whose produce is completely organic, but they lack the money to get certified as it is a very expensive process for every small farmer to go through. This remains a big challenge in India." The company was set up in 2011 by the Hong Kong-based entrepreneur and focusses on clean, sustainable and ethical products and the concept of conscious luxury. "You also need full disclosure of ingredients, something many brands are selective about. My brand is certified vegan, natural, and we source from organic farmers. I am proud of using Indian ingredients which are sustainably grown and harvested," she adds.
Mumbai-based Siddharth Somaiya, who founded Organic Riot earlier this year, details the entire procedure and the hard work that goes behind it. "We spent four years building everything from scratch and one of the best formulators (one who creates the formulation for a product) from New Zealand is working with us. Our mission is very simple. We currently have four products, but we are looking at creating a premium, safe and sustainable brand that is vegan, cruelty-free and also hypoallergenic-tested." While Organic Riot believes in fewer SKUs, which is the ultimate luxury, Somaiya is quick to add that he is "looking at it as a volumes business and would like to do a Shiseido in India. To make an impact, the brand has to be mainstream even if it costs more in the long run."
Reaching to discerning buyers has not been too difficult, though, going by the route taken by Omorfee and others which are selling their products online, at least during the initial years. Many a fledgling brand felt wary of entering the retail market via the capital-intensive brick-and-mortar model and tied up with the likes of Nykaa and Vanity Wagon. The benefit has been mutual. "Over the past couple of years, the share of the 'natural' category at Nykaa has nearly doubled. This category mainly includes products offering natural, organic, ayurvedic and herbal beauty solutions. Its growth has been triggered by a global movement where customers are taking a lot more interest and are more discerning about product ingredients. We expect this trend to continue," says Nihir Parikh, Chief Business Officer at Nykaa.
Since its launch in 2012 by former investment banker Falguni Nayar, Nykaa has grown manifold, fuelled by its omnichannel business model. After a recent round of funding by private equity firm TGP Growth Capital, Nykaa is valued at $724 million. It has also set up over 35 stores across the country.
Building distribution synergies varies, however, as this space is getting too crowded, too fast. According to Naina Ruhail, Founder of Vanity Wagon, a year-old portal selling organic, natural and herbal products, "New brands are coming up every day. Sometimes, the brand approaches us and we check its certification, get the product tested and try the product before selling. We also go to a new brand after doing a background check to see how it manufactures, what ingredients are used and whether it is worthy of being featured on our e-commerce site."
Interestingly, Amazon India, Nykaa and Vanity Wagon have seen a large chunk of their business coming from Tier-II and Tier-III cities as well as smaller towns. The north-east region, Telangana, Visakhapatnam, Bengaluru and Pune are some of the areas which have seen a growing demand for clean beauty products and people are also willing to pay more for them. And much like Nykaa, Vanity Wagon is growing by 40-50 per cent month on month, riding the growth wave.
So, what does the road ahead look like? It is still to be seen if up-and-coming Indian brands can do a Forest Essentials or a Kama or a Shahnaz Husain, either locally or globally. Sticking to global quality standards is one way of doing it, but the buck does not stop there. Both big and small brands across the globe are looking at reducing their carbon footprints and working on zero-waste packaging. Marketing intelligence agency Mintel has also announced that "sub-zero waste will be a movement towards a ground-shaking new archetype for the beauty and personal care industry." This means India's homegrown brands need to embrace a whole new paradigm in terms of sustainability. Making and marketing of green products more eco-chic are going to be the next big challenge for all.