India's beauty boom: conglomerates race to capture the $27 billion prize

The scent of sandalwood and saffron is increasingly mingling with the ambitions of global beauty giants. As Western markets face headwinds, India has emerged as the hottest destination for acquisitions and investments, with Estée Lauder, Unilever, and L’Oréal all making significant moves this year. The question isn’t if they’ll invest, but how deeply they’ll dive into this rapidly expanding market.

Ayurveda's ascent: a key to unlocking indian consumer trust

Estée Lauder’s recent full acquisition of Forest Essentials, following initial investments dating back to 2008, underscores the growing importance of ayurveda-led beauty. Stéphane de La Faverie, ELC’s CEO, explicitly linked the move to the company's “long-term commitment” to India, citing it as “one of our largest and most significant emerging markets.” But it’s not just ayurveda itself; it's the blend of ancient wisdom and modern science that's proving irresistible. Indian consumers, increasingly wary of wellness tracking and self-optimization trends, are seeking a return to natural rhythms—a sentiment that Forest Essentials and similar brands are expertly capitalizing on.

The numbers tell a compelling story. Euromonitor predicts India’s beauty market will swell to $27 billion by 2029, a staggering 37.2% growth. A recent McKinsey survey revealed that a remarkable 78% of beauty executives view India as possessing the greatest growth potential globally—a sentiment more compelling than that seen in China’s market.

Digitization and the rise of tier 2 & 3 cities

This isn't just about a burgeoning middle class and a growing population; it's about the explosion of smartphone adoption and the dramatic shift to digital commerce. India now accounts for 40% of all global internet transactions, fueled by over a billion smartphone users. Sara Hudson, a partner at McKinsey, notes that India is experiencing growth “at a faster pace than other markets, including those that used to drive lots of growth for global beauty players such as China.”

The impact is being felt across the country. Leading retailers like Nykaa, Purplle, and Tira Beauty are extending their reach beyond major metropolitan areas, with 60% of Nykaa’s revenue now originating from Tier 2 and 3 cities—a demographic largely comprised of Gen Z and Alpha consumers who are digitally native and trend-driven. It’s a shift that demands localization and adaptability.

Beyond the hype: decoding indian beauty values

While global trends like “glass skin” haven’t fully resonated in India—as Tanya Rajani of Mintel aptly points out, “If we tried it, we would really look quite sweaty”—brands that prioritize efficacy and safety are thriving. L’Oréal's recent campaign featuring billboards explicitly stating