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L’Oréal cosmetics to expand retail footprint

L’Oréal plans to open stores in markets such as Bangalore, Chennai and other cities
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First Published: Tue, Jan 01 2013. 11 01 PM IST
A file photo of an employee at a costemics store in Siliguri, Darjeeling. L’Oréal’s expansion in India comes at a time when growth is slowing in other Asian markets such as South Korea and China. Photo: AFP
A file photo of an employee at a costemics store in Siliguri, Darjeeling. L’Oréal’s expansion in India comes at a time when growth is slowing in other Asian markets such as South Korea and China. Photo: AFP
New Delhi: French cosmetics maker L’Oréal SA is expanding its retail presence in India’s biggest cities, seeking to tap the 30% annual growth in a colour cosmetics market worth Rs. 2,250 crore by annual sales.
The Paris-based maker of beauty and personal care products is looking at expanding single-brand L’Oréal Paris make-up studios as well as so-called shop-in-shop oulets in the malls of the five top Indian cities. The company is also widening the reach of its premium brands, such as Lancôme and Keihl’s, beyond Delhi and Mumbai.
The first stand-alone L’Oréal Paris make-up store opened in 2010 at Mumbai’s Palladium mall, followed by shop-in-shops—hiring space in departmental stores—in Delhi last year. The company is evaluating plans to open stores in markets such as Bangalore, Chennai and other cities.
“Globally, L’Oréal has such concept stores in select countries where specialized retail is not very strong,” said Satyaki Ghosh, director of the consumer products division at L’Oréal India.
In other countries, L’Oréal Paris retails through specialized departmental stores as well as large pharmacy chains. Spread over 400 sq. ft, the L’Oréal Paris stores will stock L’Oréal Paris’s colour cosmetics range, including eye shadows, eye-liners, blushers, lipsticks and foundations, and will be staffed by make-up experts.
“We wanted to create our own stores to ensure quality and consumer interaction with the brand,” said Ghosh.
The colour cosmetics category is growing rapidly. According to data from research agency Euromonitor, the colour cosmetics category in India grew 29% by value in 2011 to reach Rs.2,250 crore. Sales in the category are expected to reach Rs.4,760 crore by 2016.
L’Oréal’s expansion in India comes at a time when growth is slowing in other Asian markets such as South Korea and China. Revenue from luxury cosmetics such as Lancôme lipsticks and Biotherm cream “suffered in South Korea and Taiwan and decelerated in China, but remained dynamic in other emerging markets,” Reuters reported on 6 November.
While L’Oréal is pushing its flagship brand through the retail route, its luxury products division is also eyeing newer markets.
“While we have developed mainly in Mumbai and Delhi, it is our aim to extend our reach in other cities including Bangalore, Chennai and Kolkata,” said Marco Riggio, director of luxe products at L’Oréal India.
L’Oréal India has 13 Lancôme points of sale (four boutiques and nine department-store counters), six Kiehl’s boutiques and over 100 points of sale for Giorgio Armani and Ralph Lauren fragrances. Other cosmetics companies are also seeking to tap the rapid growth in the Indian cosmetics market. Last month, Louis Vuitton Moet Hennessy (LVMH)-owned multi-brand cosmetic and perfume retail chain Sephora signed a licensee deal with Genesis Luxury. New York-based MAC Cosmetics, which is in India through a retail agreement with Shoppers Stop Ltd, has been widening its retail network.
To be sure, the growth of exclusive branded cosmetics chains is a phenomenon that’s for now restricted to the biggest Indian cities.
“We see this phenomenon grown in the top eight cities,” said Nikhil Ojha, head of India strategy practice at Bain and Co. who is a part of the consulting firm’s consumer products and retail practice.
Although the so-called super-premium category is growing on a small base, the pace of growth is faster than the overall cosmetics market, said Ojha.
L’Oréal India is also setting up a research and innovation centre in Mumbai that will open in January.
The centre will aim at developing products for the Indian market. L’Oréal India also operates a manufacturing and distribution centre located in Chakan, Pune, for hair-colour, hair care and skin care products.
The French firm, which set up shop in India in 1992, operates across four market segments—consumer products, luxury products, professional products and active cosmetics.
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First Published: Tue, Jan 01 2013. 11 01 PM IST
More Topics: L’Oréal | Retail | Lancome | Keihl's | Shoppers Stop |
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