Amazon, Flipkart target small towns to expand personal care business

E-commerce companies such as Flipkart and Amazon are expanding their presence in the beauty and personal care (BPC) sector. Their objective is to tap into new customer bases in smaller cities and towns, while introducing fresh brands, capitalising on the rapid growth of this category, according to a report by Mint.

The report quoted a senior official from Flipkart as saying that the company's goal is to substantially raise the gross merchandise value of its beauty and personal care segment, an important metric for e-commerce platforms that denotes total sales value. It aims to potentially double this value over the next four to five years, the official said.

Manjari Singhal, head of business, FMCG and general merchandise at Flipkart, said the business has the potential to double its gross merchandise value in the next 4-5 years.

Innovation from direct-to-consumer brands and new product launches will encourage repeat purchases on the platforms, along with increased adoption in Tier-II and Tier-III markets, she said, adding that Flipkart's beauty and personal care business has grown by 1.3 times compared to the same period last year.

Flipkart sale volumes

The BPC sector ranks within Flipkart's top ten categories based on sales volumes. Recently, the company organised a major event aimed at involving beauty influencers on its platforms, seeking to boost online sales of serums, anti-wrinkle creams, and body washes, the report said.

Meanwhile, Amazon India announced its intention to ensure access to high-quality beauty products across every pin code in India.

The report quoted Zeba Khan, director, beauty, luxury beauty and personal care, Amazon India, as saying, “Beauty is one of the top categories via which we recruit new customers. It's very strategic from a customer acquisition and repeat standpoint. We do expect it to be one of our top categories for the platform in terms of driving growth as well."

French company L'Oréal expects that 100 million new customers in India will start purchasing beauty products online over the next three to four years. Currently, one-fifth of L'Oréal's sales from brands such as Maybelline, L'Oréal Paris, and Garnier come from online retail channels.

According to a recent report by HSBC global research, India's beauty and personal care market, which saw a fourfold increase from 2006 to 2022, is expected to multiply fivefold over the next 15 years. This growth is anticipated to propel its gross merchandise value (GMV) to $90 billion, rising significantly from $19 billion in 2022.

The report attributed the expanding influence of e-commerce and increasing income levels as factors driving the increased demand. It noted that while e-commerce currently accounts for only 17 per cent of the total beauty and personal care (BPC) market, this share is projected to reach 45 per cent by 2037.

Over the past decade, competition in India's beauty and personal care market has significantly increased, with an increasing number of beauty brands and retailers entering the fray. More recently, companies like Reliance Retail and the Tata Group have ventured into both offline and online beauty retail, driven by a burgeoning demand for this category, the report added.