More European brands look to expand on the Indian markets

By Michelle Yeomans contact

- Last updated on GMT

Related tags: Investment

More European brands look to expand on the Indian markets
European brands, in particular Italian cosmetics players are tapping into the Indian markets of late and Officiana Farmaceutica Italiana (OFI) is the most recent brand awaiting a nod from the Foreign Investment Promotion Board (FIPB) to expand its business on the region.

Along with its local joint venture partner ‘San Pellegrino Cosmetics’, the Italian cosmetics company is planning on investing 51 per cent in the venture amouting to 1.7 crore to open 'Bottega Di LungaVita' branded stores, two of which will be based in New Delhi followed by outlets in Mumbai and plans to expand in other countries depending on the success here.

According to OFI president and chief executive Alberto Donati; "The company is likely to set up five standalone stores and at least 200 counters across outlets in India through the next five years. It would begin with an initial investment of ^2 million (about Rs 14.2 crore) through 18 months and step up funding subsequently."

The Italian brand is also exploring the option of setting up a manufacturing and packaging base in India and is already scouting for the right locations for contract manufacturing in the country.

So far, OFI has three flagship stores in Italy. About 70 per cent of its business is focused on contract manufacturing for brands such as Revlon, Merck and Sanofi in key markets.

Consumers continuing to spend despite slowdown

According to analysts, the influx of cosmetic companies expanding onto the Indian cosmetics market is a result of consumers continuing to spend, despite a lulling economy and a slowdown in consumer spending on non-essential products and services.

With the cosmetics market in India estimated at Rs 26,400 crore, and the anti-ageing segment at Rs 1,400 crore, growing 30 per cent a year, consultants Technopak Advisors say working women tend to spend 35 per cent or more of their income on themselves, splurging on everything from cosmetics to cars.

"All those companies are trying to cash in on the huge appetite for foreign cosmetic brands in India amid growing spending power among the country's large section of women, thanks to the increasing number of ladies entering the corporate workforce every year."

Related topics: Market Trends

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