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Rural contributes 30 of India s cosmetics industry

The growing demand of beauty and wellness products in smaller cities is keeping many players busy to tap a new breed of customers who are increasingly getting richer and willing to shell out money on various premium products Shushmul Maheshwari CEO RNCOS shares the right approach to tap the rural market

Shushmul Maheshwari
CEO, RNCOS
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How big is Indian cosmetics market and what’s the share of rural in it?
The current market size of Indian cosmetics industry is estimated to be around Rs 537 billion and is forecasted to reach Rs 1,032 billion by 2018, growing at a CAGR of around 18 percent during 2014-2018. Currently, the share of rural market in Indian cosmetics industry is around 30 percent. However, in the coming years the growth of urban market in value terms is expected to be more compared to rural, hence the rural share is anticipated to decrease to 28 percent by 2018.

What are the latest trends that are picking up in smaller towns?

With growing income level and increasing consumer awareness, the penetration of branded cosmetics is continuously increasing in these areas. However, these consumers are more inclined towards regularly used cosmetic products like talcum powder, hair oils and moisturizers, etc. Skin care cosmetic companies are targeting these markets by launching products in lower price range and smaller packs, as these are more affordable. Similarly, hair colour market in smaller towns is completely driven by small sachets of hair dye as consumers use it occasionally.

What kind of marketing strategy brands are adopting while catering to these locations?

Companies are launching cosmetic products in smaller sachets and at affordable prices. Also, they are developing rural-specific products to match the habits and purchasing power of the smaller town consumers. And, for the promotional purposes, they are using mass media in rural areas. For instance, HUL used radio channels for creating awareness about its skin care products in the smaller towns.

Please share specific examples of the customized products and services offered by the brands to small town consumers?
The cosmetic companies are launching various products to meet the needs of small town consumers. For example, Godrej’s Nupur hair dye and Marico’s Nihar coconut hair oil are gradually changing the face of hair care market in smaller towns. In skin care, Fair & Lovely cream is relatively popular in rural areas.

What’s the right strategy to succeed in these markets?
Marketers planning to tap the hinterland should always keep in mind the affordability factor, as income level in rural area is relatively lower as compared to the urban. They should also remember all customs, traditions and beliefs of the people in the concerned area as decision of the consumers, especially in the rural area, is based on emotions. In addition to this, marketers should adopt direct selling, free gifts, samples or demonstration as the marketing strategies.

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