Untapped Potential of Local Stores in the E-commerce Dominated Beauty Sector

While everyone believed that the rise of e-commerce platforms would lead to the end of local stores, recent beauty industry trends suggest a different narrative. Our recent study revealed that retail stores still hold a significant place in the market, ranking third in the preference for buying beauty care products. This insight is pivotal for brands and retailers who underestimated the importance of maintaining a presence in traditional retail outlets.

The Indian beauty market has witnessed remarkable growth over the last five years, from $12.3 billion in 2018 to $15.6 billion in 2022. To put this into perspective, you can purchase over 1000 private jets with the growth of the beauty industry. 


Dominance of E-commerce 

E-commerce has been a major driver of this growth, with platforms like Amazon, Nykaa, and Purplle leading the way. After Amazon and Nykaa, local stores emerge as the third most popular choice for purchasing personal grooming products. While e-commerce platforms are becoming increasingly popular for beauty product purchases, local stores hold a vital market share.

The Rise of E-Commerce in Beauty

Between 2015 and 2022, e-commerce in the beauty sector nearly quadrupled, with its market share exceeding 20%. This growth is attributed to various factors, including online giants' expansion of beauty offerings, increased digital access from direct-to-consumer brands, and the significant role of online channels in omnichannel retail strategies.

The beauty market is becoming increasingly competitive with the entry of independent brands. 42% of consumers prefer trying new brands, indicating a shift in brand loyalty and a willingness to experiment. 

What does the future hold? 

Looking ahead, the beauty industry is expected to continue its upward trajectory. E-commerce is projected to maintain its position as the fastest-growing sales channel. However, traditional retail channels, including local stores, are also expected to experience growth. 

This trend suggests that while e-commerce platforms like Amazon and Nykaa will continue to dominate the beauty product market, there remains a significant opportunity for local stores. In the future, if you aim to scale up your brand, it's crucial not to overlook the potential of local stores even after establishing a strong online presence.

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