Sanjay Sharma, Country head, Shiseido India
Francois Nars launched Nars Cosmetics with a dozen lipsticks in 1994. Six years later, he sold the company to Shiseido to expand into global markets such as the US, China and UK. Twenty-nine years later, Shiseido brought Nars to India in October 2023. “Better late than never,” Sanjay Sharma, country head, Shiseido India, remarks. “India represents substantial growth, which is different from many other countries because they are more mature. And growth is going to be difficult there because of the (high) existing base.”
In a detailed conversation with Forbes India, Sharma discusses the company’s growth strategy for Nars Cosmetics. Talking about its future plans for India, Sharma says, “We’ve surpassed our expectations by a mile. That’s why, both at the Asia-Pacific level and the group level, the company is confident about India and about the investments required to grow rapidly.” Edited excerpts:
‘The right time is now’
The Nars journey began in 1994 with Francois Nars, who launched the brand with 12 lipsticks. Those same shades remain iconic to this day. We’re getting into the India market after 29 years of existence. I think better late than never. India was in contemplation for a few years, but we wanted to get it right. Everything has kind of come together, and last year was the moment we decided to launch. Whenever a brand decides to launch in a country, it takes about three to five years to prepare. We wanted to do it right. Now, India has become important, not only from a business point of view, but also strategically as we look towards the future.
In the next decade or even the decade after that, a lot of growth, not only for Nars but for many beauty brands, will come from India. There was a digital boom, and people were more hooked on digital platforms. For instance, on our global page, Indians are the second largest followers after America. This gave us total confidence that now is the time to enter. We can’t be any later than this. The right moment for us to come is now, and we’re getting tremendous support.
India represents substantial growth, which is different from many other countries because they are more mature, and growth is going to be difficult there because of the existing base. There are fundamental changes happening in the beauty industry, not only in makeup but also in skin care and fragrances. Why I see this happening is simple; increased awareness of global brands and trends among consumers, thanks to the proliferation of social media and smartphone usage. They have contributed to this trend where the Indian consumer knows about global launches almost instantly.
‘I’ll be surprised if we don’t get into manufacturing soon’
Since Nars is an international brand, a lot of it is done globally, both in terms of the quality of products and the formulas we use. They pass all kinds of testing. But as far as India is concerned, we have a range of shade offerings that cater to different kinds of consumers across India. We see India as many Indias, not a monolith, unlike Singapore or China. The product portfolio itself caters to this diversity because it has those offerings.
If you look at international brands and the target segment we are catering to, be it skin care, fragrances or colour cosmetics… I would say I’ll be surprised if we don’t get into manufacturing in India soon. The way the landscape is changing, it’s going to happen. We will have (global) third-party global manufacturing firms setting up shop here. So in the future you will see some of that manufacturing happening in India. Right now, almost everything comes from abroad. I think everybody would like to do it here rather than just importing, because obviously, there are import duties and the hassle is higher when you import from different countries into India to sell.
Also read: India’s beauty boom and contract manufacturers: A love-hate story?
‘Surpassed expectations by a mile’
I won’t be able to share the exact numbers, but overall, we’ve surpassed our expectations by a mile. That’s why, both at the Asia-Pacific level and the group level, the company is confident about Nars’ entry into India and feels confident about the investments required to grow rapidly. To give you a better understanding, in just one year, we are now present in 30 touch points across the country. We are choosy about where we go, given the kind of brand we have and the kind of consumers we cater to. This represents a doubling of our footprint in just one year. We opened with 13 locations and doubled that number within the year. You will see a similar trajectory for the next couple of years at least. In terms of performance, wherever we are present among these 30 locations, we are already among the top three (global) brands in just one year of launching. I’m talking about certain brands that have been in the country for 15 to 16 years and are well-established.
You’ll see our numbers (going) up, and our presence in specialty beauty retail will also increase. Additionally, our ecommerce business will grow significantly. We’re closely watching the evolving quick commerce landscape in India, particularly the expanding categories and convenience it offers to consumers. The fact that you can buy a ₹1 lakh iPhone in just 10 minutes is a remarkable example. While we don’t have immediate plans to venture into this space, we’re keenly observing its development and assessing whether it aligns with our brand’s values and provides the right experience for our consumers. We’ll make a decision when the time is right.
‘India is a key investment for us’
Strategically, India is a key investment market for us, not just for Nars, but also for our entire portfolio of brands. We’re exploring opportunities to introduce more brands to the country at the right time.
As we plan to double our footprint and business, it’s clear that we’ll need to invest in several areas. This includes capital expenditure to set up new infrastructure, operational expenditure to support our growth, and strengthening our organisation to manage our expanded operations. India is a crucial investment market for us, and we expect significant growth from the country. As a result, we’ll be making investments to support our ambitious plans.
I’m confident about the luxury segment’s growth, despite the entry of new international brands. The overall market pie will grow, and each brand’s strategy and execution will determine their trajectory. Looking at discretionary spend, I predict it will increase by 1.5 times in the next five years. From a colour cosmetics lens, particularly for the women’s segment, I see significant growth driven by women’s empowerment and increasing participation in the workforce.
Comparing India’s growth to China’s, I believe we’re at a tipping point. Once India’s GDP per capita crosses $4,000, we can expect rapid growth, similar to China’s experience. Currently, India’s GDP per capita is around $2,500. In the next 10 years, India will likely follow a similar growth trajectory to China’s. This is why many companies are excited about India’s potential.
The beauty sector, in particular, has immense room for growth, with opportunities to increase value spent on beauty products per consumer and expand the number of products used by consumers. India’s consumption patterns, even compared to developing countries, indicate significant growth potential. This is why brands are confident about the future and are investing heavily in the Indian market.
(This story appears in the 27 December, 2024 issue
of Forbes India. To visit our Archives, click here.)
