Projected Triple Growth in Luxury Beauty Market Size in South-East Asia and India by 2030

South-East Asia and India's luxury beauty industry is predicted to triple in size within the next decade, according to a study by international consultancy Kearney and Luxasia, a distributor of high-end beauty products in the Asia-Pacific region. The study, titled 'Unlocking hypergrowth in Asia's luxury beauty landscape', posits that with an estimated yearly growth rate of 11% until 2031, the prestige beauty industry in these regions could attain a worth of 7.6 billion dollars by 2026. This growth rate far outstrips the 4 to 6% growth expected in the global luxury beauty market.

The comparatively sluggish recovery of the Chinese market, along with saturation of cosmetics brands in Japan and South Korea, has led to international luxury beauty brands focusing more on South Asian and Indian markets, which also include emerging local brands. This interest is further spurred by the rising upper and middle classes, likely to surpass one billion people by 2026, who are projected to increasingly patronize luxury goods. The study claims that this alludes to an 'golden opportunity' for luxury brands to thrive in today's market.

Global beauty conglomerate L'Oréal re-established their flagship luxury brand, Lancôme, in the Indian market a year ago, aiming to achieve a turnover worth a billion euros in three to five years. Japanese cosmetics company Shiseido introduced its Nars brand to local beauty shops in India last September. Similarly, The Body Shop plans to increase its Indian presence, aiming to open about thirty stores each year.

International players are also investing in domestic brands. For instance, in May 2022, Indian beauty brand Sugar Cosmetics closed a $50 million financing round involving investors such as the Asian division of L. Catterton. Additionally, in July 2022, The Estée Lauder Companies partnered with Nykaa, an Indian online beauty products company, to launch a programme 'Beauty & You India', intended to assist budding Indian beauty brands and entrepreneurs.

Still, these markets, due to their high diversity, are complex to navigate. The report indicates that luxury brands currently face six main challenges in this fragmented region, including multi-dimensional omni-retail networks, diverse local product preferences, differing marketing approaches, intricate regulatory frameworks, expensive and idiosyncratic supply chain landscapes, and partner selection due to information asymmetry.