NEW DELHI : The popularity of e-commerce and social media in India has played a major role in stimulating demand for beauty products over the past decade, Alexis Perakis-Valat, president of the consumer products division at L’Oréal, said in an interview. This is helping the world’s largest beauty company attract more shoppers. Valat, who was in India last week, oversees a portfolio of brands for the French beauty company, including Garnier, L’Oréal Paris, Maybelline, Nyx, Essie, and Mixa. Edited excerpts from the interview:
What changes are you seeing in India?
It’s fascinating to see the changes in the Indian beauty market. A decade ago, when I came to India, I was living in China then. The feeling was that the market was moving in a very traditional, very static direction where the distribution was static, and the brands were the same for years. In the last five years, the Indian mass beauty market has changed more than it has maybe in the last 100 years.
The catalyst of this change is clearly digital, social media and e-commerce. What’s very interesting is the way social media has democratized knowledge because now Indian consumers are more savvy than before. For instance, year-to-date, the number of beauty video views in India has doubled, but it’s the same in the rest of the world. I’m seeing consumers that are more savvy because they know more. They are demanding more from brands and are ready to pay a bit more for products that deliver. The second consequence is that you’re also discovering new beauty segments and categories, such as serums and make-up products. We see this as an amazing opportunity for our company and our brands. The next 10 years are going to be even more exciting.
L’Oréal has made several acquisitions globally. Do you plan to acquire brands here?
As far as we’re concerned in the consumer products division, we have tremendous growth potential for our three biggest brands: L’Oréal Paris, Garnier and Maybelline. L’Oréal Paris is the number one beauty brand in the world. It’s not yet the No. 1 beauty brand in India. It’s built around these three pillars, which are science, women empowerment and Parisian luxury. L’Oréal Paris is a multi-category brand. So, it’s filling a place that no brand can in terms of pricing. It’s in this masstige (more expensive than a mass brand) segment which is affordable enough to appeal to many Indian consumers. So I think L’Oréal Paris has a lot of potential. Moving to Maybelline, 10 years ago, it was a very small brand, selling a little bit of kajal. Now, it has become a leading make-up brand, again multi-category. Garnier has made great progress in the last ten years, but in the greater scheme of things, it’s the champion of green beauty powered by green sciences.
As far as my division is concerned, I feel that this democratization of knowledge is leading to the opening up of brand-new product categories that can be hosted by our brands.
For the parent, how often does India come up in boardroom conversations?
See, India is the sixth-largest beauty market in the world. It’s a very, very big market, and on top of it, now more than ever, these changes happening in India are really playing in our favour. So we’re talking more and more about it. As a division, our strategy is to both democratize and premiumize the market. And it’s the moment to do that because, for more and more people, social media is democratizing knowledge. Then, the development of new channels like e-commerce is also in favour of this because e-commerce gives access to great products and brands. To make the business model work, you need a certain average ordering value. L’Oréal has always been better at building aspirational brands…The role of my division is to take the best of Loreal R&D and to make it accessible to as many people as possible.
How much does premium beauty contribute to L’Oréal’s consumer products division in India?
Depends on what you call premium. Frankly, I haven’t done this math, but from what I’ve seen, the premium part of our portfolio is growing significantly faster than the average (this is not a luxury portfolio but a premium). The premium part will grow faster because of e-commerce and the rising savviness of beauty.
Is L’Oréal planning to stimulate demand for beauty products in rural India, beyond hair colours and shampoos?
I’ve been told that more and more big e-commerce players want to go to rural areas, and that’s the great thing about e-commerce. Social media, of course, also doesn’t stop at the frontiers of the cities. So, there will be a natural spillover of our portfolio in rural areas. Now, it’s not at the heart of our consumer base, clearly.
Has inflation eased for your division? What’s your outlook on pricing globally?
What we’re seeing is that inflation will most likely ease because we’re lapping some past price increases, and we’re seeing everywhere in the world an easing of inflation. That being said, first, there will be some remaining part of inflation—because, for example, our green transformation, i.e. our move to recycled plastics, etc, has a cost, and it will have an impact. As a company, our priority is not to raise the prices of the same product. Our priority is to bring innovations, to re-stage our products with new formulas, or to work on the mix between different categories that premiumize our overall mix. If you come up with a lipstick that is really better, then you are able to price it higher. You can increase your mix without increasing your prices on the same product. There is a bit of natural inflation because of other input costs in the past months—but I think this kind of natural inflation will not disappear but will most likely ease.
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