India’s Beauty Industry Moves Toward Premium and Structure

India’s beauty and personal care (BPC) industry is undergoing a structural shift from mass-market scale to premium-led, technology-enabled growth. Once dominated by traditional FMCG players focused on affordability and distribution, the sector today reflects a broader mix of digital-first brands, global luxury entrants, and increasingly selective consumers.

The BPC market in India was valued at USD 28  billion in 2024, and is projected to grow at approximately 6% CAGR through 2033, reaching close to USD 48 billion. This broad trend reflects structural growth powered by rising incomes, urbanization, and premiumization.

While precise estimates vary, specialized skincare categories are among the fastest-growing, with analysts regularly flagging double-digit growth even as broader segments expand mid-single digits. Subcategories such as serums, masks, and hybrid “skin-tainment” formats are gaining popularity, especially among urban Gen Z and millennial consumers.

Market Leaders and Strategic Plays

Hindustan Unilever (HUL) remains the largest BPC player. In January 2025, HUL acquired a 90.5% stake in Minimalist for ₹2,955 crore, with the D2C brand posting a strong 86% YoY revenue jump to ₹350 crore in FY24. This acquisition signals a clear strategy: large incumbents are not only defending their mass positions but expanding into premium and digital-first niches through inorganic growth.

L’Oréal India reported 12.6% YoY growth in sales for FY24, attributed to its implementation of premiumization and personalization strategies. The company aims to more than double its India operations, signaling long-term confidence in the market’s premium potential.

Nykaa, meanwhile, plays a dual role as an omnichannel platform and brand incubator. With over 100 stores and more than 200,000 products listed online, it dominates digital discovery and purchase in the beauty space. Its mainstay beauty products segment continued to drive growth, helping the brand post a 72% rise in Q2 FY25. Beyond retail, Nykaa’s private label and joint ventures indicate growing ambition to build homegrown beauty IP across categories.

The D2C Challenge

The rise of direct-to-consumer brands such as Mamaearth (Honasa), Sugar Cosmetics, and Plum defined the last wave of digital beauty. However, the path hasn’t been without volatility. Honasa Consumer recently faced a challenging quarter when its topline revenue decreased by 6.91% YoY, and the company reported a loss of ₹18.57 crore in Q2 FY25.

Analysts have noted that cost pressures, margin erosion, and increasing offline expansion costs are placing D2C-only models under stress. What worked in a high-growth, low-cost-of-capital environment now needs sharper retail economics and brand defensibility to sustain.

Ayurveda and Premium Naturals

Premium wellness brands, on the other hand, continue to show strength. Forest Essentials, Kama Ayurveda, and others are gaining traction, fueled by rising consumer interest in Ayurveda, ingredient transparency, and sustainable luxury. These brands are also attracting interest from global players looking for authentic, plant-based beauty propositions in a cluttered global market.

The recent launch of LoveChild by Masaba Gupta, as well as larger format stores by Tira (Reliance Retail), further indicates growing institutional focus on creating a premium, homegrown portfolio with identity, story, and science.

Consumer Behavior Is Evolving

Indian beauty consumers are becoming more discerning. Demand is rising for:

• Clean and sustainable products
• Transparent ingredient labeling
• Technology-enabled diagnostics like skin scans
• Cruelty-free and vegan certifications

This shift is visible not only in metros but increasingly in Tier 1 and aspirational Tier 2 cities, where rising disposable incomes and digital content exposure are accelerating beauty experimentation.

According to a McKinsey 2024 report, India was a bright spot in the Asia Pacific region (with 4% volume growth and 6% price growth). India led all countries in McKinsey’s regional survey in terms of consumer willingness to increase spending on beauty across income groups. Notably, low-income Indian consumers were the only low-income cohort globally to say they planned to increase beauty spending through mid-2024.

Tech Is Reshaping Beauty

Digital tools are changing the beauty experience. From AR-based try-ons to personalized skin assessments using AI, consumers are embracing high-touch, tech-powered experiences. Nykaa and L’Oréal have both rolled out AI-powered skin diagnostic tools, and several startups now offer DNA-based product personalization for skincare and wellness.

Social commerce and creator-led brands are also gaining traction. Influencers have launched independent beauty lines, while affiliate platforms and regional creators continue to drive content-led discovery and conversion.

Global Trade and Policy Tailwinds

India’s international beauty exposure is also expanding. The India-UK FTA is expected to lower import tariffs on cosmetics, creating smoother market access for global brands.

Regulators are also updating labeling, claims, and safety norms to bring them closer in line with international standards. This will further enhance confidence among foreign players seeking scalable Indian operations.

From Scale to Strategy

India’s beauty market is shifting from volume-driven distribution to value-led brand building. Scale alone is no longer sufficient. Competitive advantage now lies in:

• Differentiated formulations and efficacy
• Digital fluency and omnichannel logistics
• Operational precision and pricing power
• Brand identity built on values, not just visibility

Private equity interest is also maturing. Investors are moving beyond customer acquisition metrics and topline growth to assess unit economics, retention, and margin architecture, a sign that beauty is moving from boom to build mode.

What’s Next?

As more capital flows into both premium and digital segments and as regulatory and consumer expectations evolve, the next phase of beauty in India will likely reward those who combine:

• Science-backed innovation
• Authentic brand narratives
• Strong back-end execution
• Channel diversity with margin resilience

The winners of the next decade won’t just offer more products. They’ll offer better decisions, enabled by data, identity, and long-term trust.

Understand the premiumization wave and consumer upgrades through The Consumer Crown to Climate Tech’s Reign and From 44,000 to a Million.

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