Why "Natural Beauty" Is All the Rage: The Journey of India's Alternative Cosmetics Industry People are starting to realize the long-term issues of using harmful chemicals on their body and here's where the opportunity is

The Indian cosmetic industry has been around for a while but it's been seeing a steep upward trend in the last few years. So far, India's cosmetic industry, valued at $6.5 billion, has only a minuscule part of a global industry worth $274 billion. However, this pattern is set to change very soon as the Indian cosmetics industry is expected to grow 3X to around $20 billion by 2025.

The Growth

So what's been propelling this growth? More importantly, what trends can we expect over the next 5 years that will help the industry scale up at such a rapid pace?

For starters, while globalization began the shift in Indian consumption back in the late 1990s, it's only in the last decade or so that Indian consumption patterns have shifted in a big way. In today's post-globalization era, India's middle and upper-middle-class consumers are far more aware of the latest trends in personal grooming, not just in India but across the world. This increasing consciousness has opened up the way for a wide range of new-age cosmetics in a way that simply wasn't possible before. Of course, there's also the fact that Indian women now have increasing purchasing power, allowing them to make more adventurous purchase decisions. Finally, there's India's young demographic; 34% of the population comprises millennials. As a group, millennials across the world are willing to spend money on unique products and experiences, which is exactly where the Indian cosmetics industry is headed.

This shift in consumption patterns is also the reason why, although the cosmetics industry as a whole is currently growing between 13-18%, some areas are growing much faster than others. And natural cosmetics is one of the fastest-growing categories. Natural cosmetic products include a wide range of products - from organic products to toxin-free products to Ayurveda-based products. The Indian organic skincare market, for instance, is valued at $125 million right now but is growing at a whopping rate of 25% per year.

Cash flow

Rising disposal incomes along with higher levels of awareness and consciousness have led to a major demand for natural cosmetic products. Consumers are quickly realizing that the number of toxins that regular cosmetics carry, from SLES to mineral oil to parabens, can cause serious harm to the body in the long run. While parabens have been found to be highly carcinogenic, mineral oils interfere with the body's vitamin absorption. Today's young consumers want to know that the products they use on their hair and skin on a daily basis are actually good for their bodies in the long run.

On the one hand, there are brands like Forest Essentials and Kama Ayurveda that cater to the premium segment while on the other hand, Ayurveda-centric players like Patanjali and Himalaya are dominating the mass market. Even established FMCG brands like HUL are now marketing all-natural variants of some of their popular brands (Pears Naturale comes to mind).

Of course, the natural cosmetics industry is not without its challenges. There is, of course, the issue of ingredient availability and the relatively higher cost of production that truly natural products entail. In the long run, this can be offset by charging slightly higher prices as discerning Indian consumers are willing to pay for quality products.

Indian Lows

The bigger issue in this category is the lack of labelling laws in India. So many brands that call themselves "organic", "all-natural", or "toxin-free" actually don't have the necessary certifications. Over time, this leads to sub-par products flooding the market while positioning themselves as natural products, which can lead to a loss of trust for consumers. So there's a need for certified brands that will help build consumer confidence in this category. Mamaearth, for instance, was the 1st brand in India to bring MadeSafe Certified Products, so that customers could rest assured that their products were actually toxin-free and safe for them and their babies.

At the end of the day, natural cosmetics are not a fad or trend. Rather, they are simply an outcome of shifting consumer awareness that is here to stay. People are starting to realize the long-term issues of using harmful chemicals on their body, and are looking for sustainable alternatives. As the cosmetics industry makes a shift towards sustainability and holistic beauty, it will be interesting to see whether the upcoming natural brands win the market or whether established companies are able to adapt in time.