“I feel that we have barely scratched the surface"
Indian multinational conglomerate, the Tata Group, is set to re-enter the country’s beauty and cosmetics market after exiting it 23 years ago.
The market, which was worth £8 billion in 2017, is expected to almost double by 2025, according to the business data platform, Statista.
Noel Tata, non-executive chairman of Trent, a unit of the group which operates a retail store chain confirmed the news during an interview.
He told the Times of India that beauty products would now be “a key focus” alongside the underwear and footwear already being sold in its outlets.
Tata added: “Extended product line and experimentation with formats for these products are in the offing as we see these as growth areas in retail.”
Trent is now hoping to build new lines of in-house cosmetic brands to be sold at its flagship Westside stores, standalone outlets and online.
Its current revenue from the underwear, footwear, and beauty category is around £75 million, with the combined market worth about £22 billion.
Kranthi Bathini, equity strategist at WealthMills Securities Pvt said:
“These three segments would be low-hanging fruits for Tatas at a time when they are aggressively expanding stores and distribution channels.
“While competition is high in these segments, the pie itself is expanding rapidly as consumption bounces back in the economy.”
Noel Tata’s mother, Simone Tata, had helped create Lakme, India’s first cosmetics company in 1953, which was then sold to Unilever in 1998.
There was a 10-year non-compete clause implemented but the company only reentered the scene in 2014, just now concentrating on the sector.
However, Trent was an early adopter of the omni-channel model in Indian retail with its site, Tata Cliq, and also recently introduced Westside.com.
Tata added that the company is also in the process of developing a super-app to help expand access to customers.
He continued: “I feel that we have barely scratched the surface in these categories and a significant part of these markets are still unorganised and a shift to organised retail is bound to happen.
“We are also seeing a shift in consumer behaviour preferring more fashionable products in these categories.
“I see the digital opportunity helping us reach more customers wherever they are.”
Trent will also be helped by Nykaa, which saw a massive spike in growth during the pandemic as it allowed consumers to access luxury brands.
Nykaa has received a lot of public attention recently after a stock market debut with a valuation of £10 billion with plans to triple its store count.
However, the Tata Group will stay away from the deep discounting strategy of e-commerce giants such as Amazon to lure price-conscious buyers, with 90% of items currently at full price.