Small packs are now a thing of beauty in cosmetics industry

If Chennai-based shampoo maker Velvette introduced the product in sachets and Hindustan Unilever Ltd (HUL) later revolutionized the concept, it is brands such as Maybelline New York, MAC Cosmetics and Nykaa that embraced this approach to disrupt the market in segments such as lipsticks, foundations, lip gloss and pigments.

The only difference is while HUL attracted consumers by selling shampoo in sachets instead of bottles, the beauty brands are packaging smaller versions of their products into tubes instead of bottles.

The move is aimed at addressing consumer complaints that these products are expensive with too short expiry dates. The smaller packs not only help bring down the cost of these products, but also increase sales by reaching out to a wider customer base, more importantly in tier II and tier III cities. These packs are handy, easy to use and convenient to carry on journeys and may also tempt non-users to try out a new product. They also do well with students, who earlier found it difficult to afford such products.

To put it in context, a Maybelline tube of Fit Me foundation is available at ₹299 now, against a larger bottle that can cost anywhere between ₹600 and ₹700. And a small-size MAC lipstick now starts at ₹990, compared to a bigger one that is priced at ₹1,600.

Purvi Shekar, a 25-year-old sales professional at WeWork in Bengaluru, now buys two MAC lipsticks instead of one. She said it was very convenient to carry these mini lipsticks around. “It is better than buying the full-sized ones because they are expensive and also last forever," said Shekar.

More and more companies are reaching out to consumers such as Shekar with smaller products.

Luxury beauty brand MAC Cosmetics is offering mini-versions of its best-selling shades in lipstick, lip gloss and pigments. Similarly, online cosmetics seller Nykaa is offering “minis" of its private brand’s matte lipsticks for around 10 shades, as shown on its website.

Promoting them are a host of brand ambassadors. While Bollywood actor Alia Bhatt endorses Maybelline New York’s new lipstick line called the Creamy Matte, US singer Kemp Muhl promotes the cosmetic brand’s Fit Me foundations. Both these products retail for ₹299, among the most affordable in Maybelline’s offerings.

“Maybelline Fit Me is a very typical example of inspiration or a simile from the shampoo sachet market. The shampoo market has the bigger packs, which are priced much higher, but you also have the same branded shampoo in L’Oréal Paris in a sachet for ₹3," said Aseem Kaushik, director of consumer products at L’Oréal India. “Of course, the mls (volume) that you get are less. The ₹299 price point (for Fit Me) is more accessible to a large number of people as compared to a bottle (30ml), which retails for about ₹500."

The ₹299 new foundation

range comes in a tube and it has half the quantity compared to the brand’s bottle range.

“It’s a format strategy for going down deeper and not changing the price points per se," added Kaushik.

For lipsticks, Maybelline only cut the price and not the size, unlike MAC and Nykaa.

Indian consumers are usually ready to pay but the purchasing power goes down in tier II markets and small towns.

Earlier, women would use colour cosmetics only on special occasions such as weddings and parties. But now, applying make-up on a daily basis is more of an urban phenomenon due to increasing beauty and personal grooming trends, resulting in higher sales, a report by market research firm Euromonitor shows.

“People are trying out make-up and instead of having one lipstick they want to have a new lipstick every month. And of course when you are trying out so much make-up, I think lower-priced make-up really works," said Reena Chhabra, chief executive officer of Nykaa brands.

“If you buy a ₹6,000 lipstick you’d buy it once, but if it is for ₹400, maybe you will buy it every month."

The domestic market for lip products grew nearly 17% to ₹4,550 crore in 2018 from ₹3,900 crore in 2017.

Of this, eye and facial make-up comprised ₹1,220 crore and ₹1,190 crore, respectively, as of 2018-end.

Out of all the lip products, lipsticks have the highest penetration in India as they are used by the masses.