Beauty firms sit pretty as biz in towns glitters3 min read . Updated: 12 Jan 2021, 06:33 AM IST
- Consumers’ reluctance to visit crowded shops and greater propensity for online purchases have prompted many of these brands to invest in their own online stores, besides offering customized digital consultations
Homegrown and foreign luxury beauty brands such as Kama Ayurveda, Forest Essentials and Kiehl’s have found a new set of consumers in small towns, contributing up to 50% of sales for some of them after the pandemic boosted online sales.
Consumers’ reluctance to visit crowded shops and greater propensity for online purchases have prompted many of these brands to invest in their own online stores, besides offering customized digital consultations.
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Shikhee Agrawal, assistant vice-president at Kiehl’s India, said, “Tier-II and III towns came as a surprise to most of us and we have managed to get a lot of new recruits from there. The change in work dynamic has further aided this trend. The immigrant workforce living in bigger cities went back to their hometowns and started ordering our products. Additionally, they also introduced friends and families to the brand. Currently, about 50% of our business is coming from smaller cities."
L’Oreal Group owned beauty brand Kiehl’s, which has a limited presence through 14 stores in 10 cities, launched its e-commerce website in July last year. The objective was to translate the offline store experience into its online channel by launching an E-Boutique offering video and live chat consultation, strengthening business in the small cities.
Kiehl’s Agrawal said small-town consumers are mainly buying best-selling products as they have an aspirational approach towards skincare and are keen to try Kiehl’s products like Ultra Facial Cream and UV Defense, which are often endorsed by the celebrities.
Homegrown Ayurveda brand Kama, meanwhile, scaled up its own website and invested in technology that has helped bring 70% of its business collectively from its own as well as third party e-commerce online platforms. It is also offering expert private consultations on Zoom app after which customers are provided links to specific products which can be ordered online.
“There has been a huge uptake in beauty products in tier II and III cities during this pandemic. There are new consumers who are discovering us through Instagram and third-party platforms such as Nykaa and Amazon. We are also on e-commerce platform Purplle, which is targeted at smaller cities. I believe it is the way of the future and we will continue to invest in digital channels," said Vivek Sahni, CEO and co-founder, Kama Ayurveda.
Luxury Ayurveda brand Forest Essentials has launched a personalized consultation service called ‘Speak to Your Store’ on its website. Consumers can call, chat or do video consultation with a team of Ayurvedic experts and doctors who would recommend products, beauty rituals, lifestyle queries or even Ayurvedic Dosha consultation. The service received queries from customers in smaller towns.
“We registered an uptick in tier II and III demand vis-a-vis tier I, because bigger cities are reeling under covid-19 more and people are still scared. Shoppers have increased online purchases of consumer goods during the crisis. We think many of these behavioural changes will sustain. We took the time to invest in post-purchase redressal systems in order to better service consumers and resolve their issues," said Samrath Bedii, executive director, Forest Essentials.
The average ticket size of these purchases ranges from ₹3,000 to ₹5,000, with customers buying best-sellers. These brands have also built on their digital presence through content and active influencer marketing promotions, attracting aspirational consumers curious about high-end beauty products. This is in line with the findings of a recent joint report by Google, Kantar and WPP, which said that more than half of beauty consumers use social media and online videos, and 40% consumers use online search for research related to products and services to make the purchase decision.
Affluent consumers facing pandemic travel restrictions are also increasingly looking at high-quality beauty brands online, said Sreedhar Prasad, a Bengaluru-based independent internet business expert. He finds a huge opportunity for brands in India for this strong captive audience, which is already exposed to luxury international brands for skin and beauty. “This consumer is well aware and is looking for specific solutions best suited for their beauty needs. They rely a lot on influencers and recommendations for choosing a product, and once accepted, they give a high lifetime value. Additionally, this segment is relying a lot on digital content today which plays a key role in the product identification stage," he added.