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In India, millennials and Gen Z are revolutionising the beauty sphere by emphasising quality for money, inclusion, and creative formulas.
Traditional luxury is giving way to more reasonably priced indulgence in the Indian beauty business as e-commerce and influencers become more popular.
Millennials and Gen Zs are leading the beauty and cosmetics market in India. These generations of customers, who form the young workforce, are buying more and more beauty products. Indian Millennials and Gen Z are responsible for more than 60% of the beauty product buying, with spending from the tier-2 and tier-3 cities steadily rising. They are changing expectations and setting new standards for businesses in the industry. Millennials and Gen Z today are more inclined to purchase from brands that meet their values. This group of aspirational young Indians places more importance on value for money and affordable luxury. This shift in customer behaviour makes it more important for beauty and cosmetic brands to pivot their strategies to meet emerging expectations. However, challenges are abundant.
Challenges for the traditional luxury brands
Luxury brands often have an uphill task in breaking into the Indian market due to high costs and restricted access. The belief that luxury is expensive locked many traditional brands away from a larger customer base and Indian consumers are primarily driven by value for money. They want quality products at affordable prices. With the rise of e-commerce and D2C brands, affordable luxury is now the norm, posing a challenge to traditional retailers.
Importance of affordable luxury in the Indian market
Affordable luxury in the beauty sector is defined by various factors, such as high-quality ingredients, innovative formulations, attractive packaging, accessible pricing, and inclusivity. Brands that bring together all of these elements have a better chance of attracting young Indian customers. Affordable luxury is a bridge between mass-market products and high-end luxury items.
One way to implement this strategy is using high-quality ingredients and innovative formulations. In addition, brands that create products that meet international standards and remain affordable have a greater competitive advantage. Unlike the 1990s and 2000s, beauty and cosmetic brands can no longer rely merely on marketing to sell their products. Successful brands pay attention to extensive research and clinical tests to ensure their effectiveness and safety meet customer expectations.
One way to implement this strategy is through the use of high-quality ingredients and indigenous formulations. Brands that create products that meet international standards while remaining affordable have a greater competitive advantage. Successful brands invest in extensive research and clinical tests to ensure their effectiveness and safety, meeting customer expectations. A vast majority of customers, 92%, trust recommendations from friends and family over any other type of advertising, underscoring the importance of customer satisfaction over mere marketing tactics.
Packaging also plays a vital role in the luxury beauty market. Visually appealing, functional, and eco-friendly packaging can go a long way in improving the customer experience, thus making premium products more attractive. When coupled with affordable pricing strategies, beauty brands can increase reach and improve market share.
Young customers care about inclusivity
Millennials and Gen Z are increasingly demanding that brands prioritise inclusivity. They have a high social and ecological consciousness that determines what they buy. These customers value items that cater to diverse skin tones. Items produced to cater to diverse skin tones and types are quite popular among them, who appreciate representation and inclusivity in brand diversity.
Today’s market poses a significant risk of losing customers to beauty brands that do not prioritise inclusivity because 40% of Gen Z consumers, when making their purchasing decisions, consider it. On top of that, a survey showed that millennials would be more inclined to support such products. These figures indicate the trend towards inclusivity in the context of branding and show how much it affects customer loyalty as well as market share if ignored.
Millennials and Gen Z place more importance on socio-economic causes, especially regarding ethnicity and individual identities. They expect brands to align their values accordingly with their marketing communications or campaigns. A recent study indicated that 48% of Gen Z customers value brands that don’t have gender-based categories, placing a clear preference for gender-neutral products. Similarly, more than half of the millennials surveyed in another study found that they would choose brands that placed importance on diversity and inclusion. To attract and maintain young consumers, brands must incorporate inclusivity at the heart of their business operations and marketing plans.
Rather, these preferences are changing into crucial aspects of brand strategy. Furthermore, losing out on these value changes could result in customers choosing more inclusive competitors.
The Role of e-commerce and social media influencers
In India, e-commerce growth has played a major role in changing how beauty products are bought and sold. This includes brands’ shift from traditional B2B and B2C models to Direct-to-Consumer (D2C) approaches that enable personalised experiences while fostering strong relationships with customers. For brands to be able to quickly adapt and innovate, this direct engagement is important as it helps them understand what consumers expect.
Influencer collaborations have also become a significant trend in the beauty industry. Relatable content creators whose reviews seem authentic are trustworthy among young consumers and play a major role in building brand awareness. Therefore, engaging influencers such as Sarah Sarosh, Malvika Sitlani, and Shreya Jain extends brand visibility and trust, leveraging their credibility, and thus enabling more audience reach.
Adapting to the demands of young customers
In order for a brand to be successful in the affordable luxury market, it must first comprehend the audience. The process of developing marketing strategies and products that meet the specific requirements of millennials and Gen Z through detailed customer personas combined with data analytics can help pave the way. This means producing high-quality multifunctional products that are cost-effective and cater to different beauty needs.
The advent of inexpensive luxuriousness in the Indian cosmetic business exemplifies changing tastes among young customers. Brands that are able to adjust their offers to meet these requirements in terms of quality, affordability, and incorporation will have higher chances of success. As affordable luxury is becoming more significant in the beauty industry, brands must innovate or risk being left behind.
(Inputs by Bonish Jain, Director and Founder of PAC Cosmetics)
