Indian in India that there are service providers who

 

Indian Market  

 

 

HOW PROMISING IS THE
INDIAN MARKET FOR BEAUTY AND WELLNESS

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India is a rapidly growing economy. The middle class is becoming affluent
day by day. With the increase in disposable income, India is attracting
business Investors and marketers. This applies to the segment of Beauty and
Wellness too. Statistics show that India will be a more promising market than the
US (which is the largest market in the world currently) and also the Europe.

 

The beauty and services industry of India has seen exponential growth
last couple of year. The market players have been seeing highly visible
motivation among the consumers towards concept of grooming and beauty. The
online segment of the beauty and wellness Industry which is a new entrant to
the beauty and wellness industry has well integrated itself. Consumers are ready
to spend time and money to pamper themselves in India.

The Indian beauty Industry is growing much rapidly, at a growth rate of
15 to 18 % which is twice as much as US and Europe. The reason behind such a
tremendous growth is the changing lifestyle and fast paced globalization along
with the growing need for collective identity among the Indian women.

 

TO satisfy this consumer base Innovation is also a key factor, the
significant point has been the growth of E-commerce. Successful retailers are
always one step ahead of time. They are using online channels along with Brick
and Mortar models to capture the Indian Market.

 

The rising affluence of the expanding middle class due to fast development in
Technology and consumption patterns is the driver for this. The new market
entrants are focusing on expanding to Tier II and Tier III cities as these
markets provide similar potential as their metro counterparts. There is such a
tremendous growth in India that there are service providers who have also
started exploring new venues for rejuvenation like airports and hotels. These
spas offer 15 or 30-minute dry foot massage, shoulder and back massage, etc.

This changes are very new to the conservative Indian society which earlier
relied majorly on Home-made remedies and products.

 

 

 

                       Graph 1.1:
Market size of beauty and wellness Industry

 

This
statistic depicts the market size of the beauty and wellness industry in India
from 2012 to 2017, by category. In 2015, the Indian counter sale of beauty
products amounted to about 27.6 billion Indian Rupees.

 

                   Graph1.2: Revenue of
cosmetics and personal care market

Revenue
in the Cosmetics and Personal Care market amounts to US$5,912m in 2017.

The
market is expected to grow annually by 11.1 % (CAGR 2017-2021).

 

 

Keeping all these factors in mind our team has chosen the Indian Market
for expansion of Treat well.

 

INDUSTRY
LIFE CYCLE: The Industry is in growth stage in
India. The possible reasons are as follows:

1.   
Decreasing in
rural population rapidly.

2.   
Huge scope for
product differentiation and superior services

3.   
No or less market
penetration for the segment

                                     Fig
1.1: Industry life cycle

 

CURRENT MARKET
SCENARIO FOR INTERNATIONAL PLAYERS

The number of international players in this segment is been currently
increasing. Now even the gender bias of the Industry is seeing a gradual shift,
because the earlier women centric Industry is now seeing an increased interest
from men also. Existing players depend on Franchising route because it’s
convenient and easy to maintain. The tremendous growth poised by the Industry
has also attracted a lot of Investors who are ready to fund expansion plans of
this segment of business.

At the same time we also have to take into consideration the potential
threats of this glamorous Industry. These are the lack of skilled labor,
training institutes and the higher cost to operate.

 

This report is aimed at analyzing the macroeconomic factors and the
potential threats. We have also analyzed India alongside other potential
markets like Brazil and China.

 

 

 

 

 

PESTEL ANALYSIS:

 

POLITICAL:

 

A.  Goods and services Tax

 

Indian Government passed the bill for the Goods and Services Tax (GST)
and was put into effect from July 1, 2017.

 

The GST at 18% holds at different for the different verticals for the
beauty and wellness Industry. Even though this is a single based tax system,
the service sector of this Industry like the salons will see a negative impact
when compared to the service tax which was 15% previously.

 

B.  
Single Brand Retail

 

The Department of Industrial policy and Promotion has now agreed upon
Single Brand Retail, this will help companies to improve their ownership,
broaden brand awareness and drive future growth. India’s single brand retailing
is valued at approximately $7bn and is expected to reach at $20-25 bn over the
next 5 years.

 

ECONOMIC:

 

·      The Average spending
capacity of women in the family has considerably increased (2000-3000 INR per month).

 

·     
With
the progress of time, health and wellness as a concept has taken up a
collective desire, with increasing emphasis on the individual’s desire for
social acceptance, exclusivity and collective welfare.

 

·     
Chiefly
influenced by changes in society and in the lifestyles of individuals, this
change has also been accelerated by extraneous factors like globalization and a
greater awareness of the need for wellness among individuals.

 

 

 

SOCIAL FACTORS: The important aspects in
this category for a new company entering a multi ethnic society like India will
be the effect of the company on the society and how do they deal with it.

Keeping this in mind the following factors are being narrowed down.

 

The
three major social factors for Treat well are

1.   
rising affluence

2.   
the country’s continuing and unique pattern of
urbanization

3.   
fundamental shifts in family structures.

 

Rising
Affluence

 

In
terms of spending, the two top consumer categories—elite and affluent—will
become the largest combined segment by 2025, accounting for 40% of consumption
compared with 27% in 2016. This is very advantageous for the company as these
are the target consumers majorly.

 

The
country’s continuing and unique pattern of urbanization

 

About
40% of India’s population will be living in urban areas by 2025, and these city
dwellers will account for more than 60% of consumption. These are the group of
people who will easy access to the Treat well platform and can cause a
significant growth.

 

Fundamental
shifts in family structures

 

The
proportion of nuclear households, which has been on the rise during the past
two decades, has reached 70% and is projected to increase to 74% by 2025.

 

Decision
makers in nuclear households—younger and more optimistic than those in joint
families—base their consumption decisions more on lifestyle considerations and
the need to “keep pace”

 

TECHNOLOGICAL

 

India
is becoming more and more technologically driven, which is a very positive
aspect for a company like Treat well.

 

The
number of online buyers in India will climb to 300 million to 350 million by
2025.With the increase in online buyers, we expect the total value of e-retail
to reach $130 billion to $150 billion, or 8% to 10% of total sales, by 2025.

The
reasons behind the rising adoption of e-commerce channels include the strong
value proposition offered by online merchants, proliferating payment platforms,
strengthening delivery logistics, and significant financial investment in the
sector.

 

LEGAL:

 Legally, it is easier to start a new business
in India. The Government is more welcoming to FDI. It takes lesser time and
simpler procedures to open a new business. India also has a lot of workforce
employed in this sector, making it even more simpler for new entrants. Companies incorporated in India are primarily regulated
by the recently enacted New Companies Act.

The New Companies
Act, amongst other provisions, lays down the detailed provisions regarding
qualification, appointment, remuneration removal, retirement of directors,
conducting board and shareholders meetings, passing of resolutions, related
party transactions, the maintenance of books of accounts and the preparation
and presentation of annual accounts 

 

REFERENCES:

ONLINE https://www.bcg.com/publications/2017/marketing-sales-globalization-new-indian-changing-consumer.aspx
Accessed 16th November 2017

 

online https://www.statista.com/statistics/550507/indian-market-size-beauty-and-wellness-industry-by-categ  Accessed 18th November 2017

 

 

online https://yourstory.com/2016/04/business-india-compliance-requirements/
Accessed 16th December 2017

 

 

 

online https://www.cosmeticsdesign-asia.com/Article/2012/01/13/FDI-reform-makes-investing-in-India-easier-for-cosmetics-companies
Accessed 16th December 2017