With two R&D centres and two factories in India, 90% of the products L’Oréal sells in India are made domestically. And now the beauty giant is looking to acquire Indian beauty brands and startups in the beauty-tech space.
Chairman of L’Oréal, Jean-Paul Agon said in an interview that the company has been actively scouting for acquisitions in India in all types of beauty products. He also said that the India unit has been one of the top three fastest-growing L’Oréal subsidiaries in the past two years.
“The trend has been around for some time now. We have been looking for opportunities but we haven’t found the right fit yet. In order to look at startups, we have invested in Fireside Ventures, an early-stage investment fund focused on Indian consumer brands,” Agon was quoted as saying in ET.
The company is working on identifying startups that it can co-own and develop in beauty and beauty-tech.
Agon spoke company’s focus on India-specific products. For instance, he said, natural hair dyes have been invented in India and are manufactured in India, before being exported to Southeast Asia, the Middle East and Latin America. “While we have global products, we feel the right way is to develop products in countries where we sell them, especially in large countries like India,” he added.
Talking about ease of doing business, he said that from the beginning L’Oreal didn’t face any difficulties in India and that is the reason the company has raked in huge investments in plants, R&D centres and teams.
How Technology Will Drive Growth For Beauty Startups In India
India’s beauty and personal care industry stands at around $14 Bn. The surge in the last decade is mainly because of ecommerce of beauty products. According to a 2018 report by research firm Euromonitor International, the presence of online retailers like Nykaa.com and Amazon.com has helped the beauty and personal care products category cross $400 Mn in internet sales up from $100 million in 2014.
Nykaa plans to continue investing in the omnichannel business and has plans to open up to 100 stores in the next two to three years. The beauty tech company has raised a total of $93.02 Mn in funding from investors such as TVS Capital Funds, TPG Growth, and Lighthouse India among others. Reliance also plans to add virtual reality and augmented reality solutions in stores.
Agon also said that technology is transforming the beauty industry like every other industry. “It’s just like fintech or medtech. So the future of beauty will be beauty-tech. At L’Oreal, we want to be the champion of beautytech of tomorrow. We were the first consumer company in the world to embrace the digital revolution in a big way,” Agon said.
“Our transformation will continue and we will be the most advanced beauty-tech company in the world,” he added.