The L'Oreal group has been present in India since 1990 and has developed its activities in the field of cosmetics throughout the world. L'Oreal established a 100% subsidiaryin in 1994 and three of the four divisions of L'Oreal are currently present in India: The Consumer division, was the first group division to be launched in India, followed by the Professional Products division (established in 1997) and the Active Cosmetics division (established in 2002) with the brand Vichy . In 2003, L'Oreal India opened its branch in Pune near Mumbai.
With 46% of growth per year and a turnover of 38.5 million euros in 2005, India has been the fastest growing market with respect to L'Oreal. The question to be answered here is: how was L'Oreal, the undisputed leader in the global cosmetics market, able to adapt its global strategy to the Indian market?
India approximately has 1.1 billion people and the country's GDP is 720 billion, which makes India the 10th largest economy in the world.The per capita income of India is 653 dollars per year while for China the per capita income is about 1400 dollars per year.
There are about 600 million potential consumers with 60 million representing the upper class of the country (over 4000 euros in annual income per household) which is twice the figures compared to the 90s. In addition, 250 million consumers earning between 1800 and 4000 euros per year were the emerging middle class with an increase in the urban purchasing power. Approximately 300 million consumers represented the workforce which was roughly five times the French market and 2 / 3 of the European market.
With an average rate of the annual economic growth being 6% and an annual growth rate of per capita income being 4% over the last 10 years, India is ranked among the most dynamic economies in the world.
Currently poverty is still existent and has a strong presence in India, excluding the consumption of more than three quarters of the population in a society which remains mostly rural. Due to the caste system, a large proportion of the population development is slow, especially in cities.
The emergence of a young population (in India, 70% of the population is under 35 years) and the increased purchasing power are few of the factors that contribute to the market growth.
The cosmetics market in India is estimated at 1 billion euros and its growth per year is 10%.
Sales of the makeup products in India are driven by a strong demand from Indian youths aged between 15 and 24 years. The female population accounted to 19.4% and the sales made by these people represented 29.3% of the total sales with respect to makeup. Thus young women spent a whopping $ 19 billion to purchase cosmetics. Purchases made by people who were aged above 55 (10.6% of the total population) accounted to only 8% of total purchases.
Women aged between 35 and 44 (12.6% of the total female population) represent 19.6% of the total purchases. Adolescent girls and young Indians prefer eye makeup and nail polish in particular and hence the sales in this area is comparatively more than others.
[...] The analysis of the context of distribution Distribution channels are reduced in India because the country remains predominantly rural. Moreover, these circuits remain primarily confined to large cities. Distribution in India is an important economic sector and it represents 35% of India's GDP. However, this is an exceptionally fragmented sector since India has the largest number of outlets in the world (12 million against 1 to 2 million in Brazil or Mexico). The vast majority of these outlets (the "kirana stores") do not exceed 50 and do not declare their location or income and sometimes do not pay electricity bills or taxes. [...]
[...] The implementation of globalization Globalization and the basic strategies Marketing strategy of L'Oreal in India is the differentiation strategy with an external ACD strategy because L'Oreal is the adaptation of: the product and lower prices. To increase sales of its shampoo, L'Oreal offers mini packaging. L'Oreal had to adapt to the local demand to make its products accessible to the wallet of the Indians. For this, the group offered tiny formats: 100 to 200 milliliters for shampoos, for example, against 400 or more in Europe. [...]
[...] The cosmetics market in India is divided into several parts to meet different needs: The market for "skin care" The market for "hair care" The market for perfumes and deodorants Demand in the cosmetics market in India is largely market-oriented with respect to the "hair care" because it alone recorded sales of 600 million euros, i.e, more than half of the total cosmetics market. It is on this sector of the "hair care" that L'Oreal has revolutionized the market in India. [...]
[...] annual economic growth being and an annual growth rate of per capita income being over the last 10 years, India is ranked among the most dynamic economies in the world. Currently poverty is still existent and has a strong presence in India, excluding the consumption of more than three quarters of the population in a society which remains mostly rural. Due to the caste system, a large proportion of the population development is slow, especially in cities. The emergence of a young population (in India of the population is under 35 years) and the increased purchasing power are few of the factors that contribute to the market growth. [...]
[...] India registers huge sales in "Hair Care", "Skin Care" and "Hair Color" market and the philosophy of Garnier is "New, different, better." Adapting to the local market that is made primarily on the packaging and communication, the product remains similar to that of the products sold in Europe. In addition, all Garnier products are not sold in the Indian market. Garnier excels in the Indian market and is currently the second biggest brand after the market leader Godrej. Active cosmetics market Vichy: The objective of this market is to offer alternative consumer products: diversification strategy. [...]
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