Case Study – Ad-hoc Research
HEALTH & BEAUTY STORES RESEARCH IN INDIA
Description
Our client was curious to understand the potential of their health and wellness products in India
Duration
15 to 20 hours of research
Impact
With our research, the firm was able to successfully set up its health and wellness franchising business in the Indian market
HEALTH & BEAUTY STORES RESEARCH IN INDIA
1. List of Companies
2. Company Profiles
2.1. Health & Glow
2.2. Background
2.3. Products and their Categories
3. Apollo Pharmacy
3.1. Background
3.2. Products and their Categories
4. Guardian Healthcare Services
4.1. Background
4.2. Products and their Categories
5. NewU
5.1. Background
5.2. Products and their Categories
6. The Body Shop
6.1. Background
6.2. Products and their Categories
7. Crossword Bookstores
7.1. Background
8. Market Potential
8.1. Beauty & Personal Care
8.2. Book Retail
8.3. Pharmacy Retail
1. List of Companies
2. Company Profile
2.1. Health & Glow
Website: https://healthandglow.com/
LinkedIn Page: https://www.linkedin.com/company/health-&-glow/ Year of Foundation: 19961
Headquarters: Bangalore, India
Revenue (2017): INR 51.2 Crore (Year ended on 31 March, 2017)
2.2. Background:
What began in 1997, has only grown by foundation, service and meaning. Health & Glow, has crafted a niche for itself in the industry and the hearts of its customers. Today, they have over 120 stores across Bangalore, Chennai, Hyderabad, Cochin, and Mumbai. They host an unmatched and an ever-increasing assortment of skincare, haircare, makeup and wellness products for both men and women. In addition to Health & Glow’s private label, they feature emerging as well as top brands across a broad category of products. Their portfolio includes more than 300 brands and 6000+ products for their diverse customers.
They directly source the products from the brands and authorized distributors, thereby, ensuring 100% authenticity and freshness of each product. They are also available online on the app – both Android and iOS.
Their brands include but are not limited to Adidas, Azzaro, BBlunt, Chambor, Colorbar, Dove, Faces, Ferrari, Gillette, Hugo Boss, Jergens, L’Oreal, Maybelline, Revlon, park Avenue, Skin Cottage and Toni & Guy among others.
H&G wants to be one of the first home-grown retailers in the country who takes the first meaningful steps towards offering a digitally-enabled shopping experience across its stores. Combining its experience in brick-and-mortar and the new-age technologies available today, H&G wants to offer the best possible shopping experience to its customers.
2.3. Products and their Categories
3. Apollo Pharmacy
Website: https://www.apollopharmacy.in/
LinkedIn Page: https://www.linkedin.com/in/apollo-pharmacy-b72bb2106/ Year of Foundation: 1983
Headquarters: Hyderabad, Telangana
Revenue (2018): INR 1,910 Crore (Year ended on 31 March, 2018)
3.1. Background
Apollo Pharmacy is a part of Apollo Hospitals, with over 3000 plus outlets in key locations. Accredited with – International Quality Certification, Apollo Pharmacy offers medicines round-the-clock, through their 24-hour Pharmacies. Apollo Pharmacy also provides Customer Care any time of the day. Apollo Pharmacy is well stocked with medicines OTC and FMCG products, manned by competent staff with computerized system.
Apollopharmacy.in has more than 5000 products in various categories like Vitamins and supplements, Baby care, Personal care, Health foods and OTC. In addition to this they have more than 400 Apollo Brand Products in the following categories like vitamins and supplements, health food, Oral care, skin care, personal care, baby care, OTC etc.
The Apollo Hospitals’ pharmacy division runs over 2600+ stores in 18 states, with plans to reach 3000 stores by 2018. Along with the physical expansion, it is now looking at a more sophisticated marketing strategy to woo customers. While it continues to add around 250 stores each year, all of them owned and operated, Apollo Pharmacy is also planning a digital thrust and a mobile app.
Apollo Pharmacy is the No.1 retail chain in India in terms of pharmacy spread as well turnover, and has around 55% of the current market share amongst the organized chemist retail space across India. They have developed their online delivery system to meet the needs of our customers in Wellness and FMCG ranges. Adhering to statutory compliance restrictions on sale of Pharmaceuticals online, the company is awaiting clear guidelines on the same.
Apollo Pharmacy has gradually experimented and strengthened several non-pharma categories, such as Baby & Mother, Wellness, Health Foods etc. Store space allocation and revenue is at 60:40 in terms of pharma to non-pharma. It is currently the 5th largest FMCG retailer in the country and the top retailer for major brands like Nestle, Abbott and P&G.
The company is focusing on strengthening the internal systems to improve service parameters like fill rate, bounce and availability to our customers. They have plans to utilize the potential of analytics to reach out effectively to customers. Technology- wise they are moving ahead and making their present IT systems future proof. Apollo Pharmacy is the first retailer in India to embrace cloud based ERP solution which will strengthen our IT systems.
3.2. Products and their Categories
4. Guardian Healthcare Services
Website: https://www.guardian.in/
LinkedIn Page: https://www.linkedin.com/company/gnc/ Year of Foundation: 1935
Headquarters: Pittsburgh, USA
Revenue: Indian revenue unavailable.
4.1. Background
GNC is a global specialty retailer of health and wellness products. Headquartered in Pittsburgh, US, and with over 9,000 locations in approximately 50 countries, GNC sets the standard in the nutritional supplement industry by demanding truth in labeling, ingredient safety and product potency, all while remaining on the cutting-edge of nutritional science.
GNC stays committed to help Indian consumers in better managing their health with a scientific approach towards Living Well. To help the Indian consumers to manage their lifestyle and related issues such as fatigue, stress, vitamin deficiencies, and cholesterol, GNC recommends it four building blocks of nutrition, which are Multivitamins, Omega-3’s, Proteins and Probiotics to start their journeys towards Living Well.
In India, Guardian Healthcare Services Pvt Ltd. tied up with GNC as a sole franchisee with exclusive distribution and marketing rights. Founded by Ashutosh Taparia, who has over two decades of expertise in healthcare, Guardian has a vision of establishing thought leadership position in Indian nutraceuticals market. GNC products are now available online on the e-commerce portals as well as at the retail outlets of Guardian Healthcare and other pharmacy chains. Guardian aims to make GNC range available at 4000 stores across all Metros and Tier I towns by 2020.
4.2. Products and their Categories
5. NewU
Website: https://www.newu.in/daily-essentials-store LinkedIn Page: NA
Year of Foundation: 201218 Headquarters: Ghaziabad, Uttar Pradesh
Revenue (2018): USD 8.6 K (Year ended on 31 March, 2018)
5.1. Background
NewU gives you access to shop for a wide range of color cosmetics, skin care, hair care, personal care & men’s grooming products from major brands. They aim to provide the customers with best services to make their shopping experience a pleasant one.
In 2013, Dabur’s subsidiary, H&B Stores Ltd, operated 44 ‘NewU’ stores with a majority of them in the NCR region and Bangalore, and were planning to open 30 new stores by 2014. Of the total product mix at the NewU stores, about 18% is private label items.
5.2. Products and their Categories
6. The Body Shop
Website: https://www.thebodyshop.in/ LinkedIn Page: NA
Year of Foundation: 1976
Headquarters: Brighton, United Kingdom Revenue: Indian revenue unavailable.
6.1. Background
The company founder, Dame Anita Roddick, began mixing her own products and infusing them with a new idea: that business could be a force for good. The company now has over 3,000 stores in 66 countries and employ over 22,000 people who help them bring their unique blend of ethical beauty.
In 2010, The Body Shop, had slashed the prices of about 800 products by up to 35% in India to speed up its growth in one of its fastest growing markets. The pricing markdown only for India was part of an ambitious plan to expand its reach to more people and smaller cities in quicktime.
In 2011, the company’s expanded its offerings to the Indian customers with more than 1,200 products making available there. At that moment, the company was targeting the country for a 10-times growth rate in the next five years. By 2015, the Shop planned to touch the lives of 15 million people in India. In 2017, the Shop had dropped prices across its products by 20-30% in India, to increase its share in an intensely competitive cosmetics market.
In 2018, the Shop further slashed its prices in the Indian market by 11-21% across all its product categories to make the brand more accessible to customers in the country.
6.2. Products and their Categories
7. Crossword Bookstores
Website: https://www.crossword.in/ LinkedIn Page: NA
Year of Foundation: 1992 Headquarters: Mumbai, India Revenue: Indian revenue unavailable
7.1. Background
Crossword aims to be a point of cultural and social interaction where authors and poets hold court, where children are regaled, where people gravitate to be informed, to be entertained, even enlightened. Crossword stocks the widest range of Books – Toys – Stationery – Magazines, Gifting and Hardware & Accessories.
With its large children’s section and its focus on making the store a friendly, safe, fun- filled place, Crossword attracts many families who normally don’t think of visiting bookstores. Facilities like the Crossword Gift Vouchers, the friendly ‘Return,
Exchange & Refunds’ policy, the Cafes within the stores and the unique store experience make it easy and enjoyable for customers to shop at Crossword.
Crossword, with 90 stores across Ahmedabad, Calicut, Bhopal, Bengaluru, Chennai, Cochin, Delhi, Hyderabad, Indore, Jaipur, Udaipur, Kolkata, Lucknow, Mumbai, Thane, Navi, Mumbai, Kalyan, Nagpur, Nasik, Pune, Siliguri, Vadodara, Raipur, Gandhinagar, Mangalore, Surat, Ranchi, Goa, Trivandrum & Kohima, is India’s fastest growing chain of bookstores.
In 2014, almost 60% of its revenue came from books, though the company also had diversified portfolio of toys, stationery, music and movies.
In 2017, the share of Indian authors at Crossword sales was 45%, which grew by 25- 27% in the last eight years.
8. Popular Product Categories
Based on our research above, the following product categories are the most popular apart from regular prescribed drugs:
- Skincare Products: Face Wash, Face Cleanser, Face Wipes, Toners, Scrubs & Exfoliators, Face Masks, Moisturizers & Creams, Lip Balms, Sunscreen, Eye Liners, Anti-aging cream, Face Serums
- Haircare Products: Shampoo, Conditioner, Hair Colour, Hair Serum, Gel & Wax, Hair Spray, Combs & Brushes, Hair Extensions & Accessories
- Bath & Body: Creams & Lotions, Hand Creams, Hand Sanitizers, Body Oils, Talcum Powders, Deodorants & Roll-ons, Shower Gels, Soaps, Hand Wash, Loofahs & Sponges, Hair Removal Creams, Waxing Strips, Razors & Epilators, Foot Creams, Manicure & Pedicure Kits, Shaving Creams, Foams & Gels, After
- Mom & Baby: Breast Firming Gels, Nipple Creams, Stretch Mark Creams, Massage Oils, Intimate Care, Sanitary Napkins, Tampons, Baby Oils, Baby Shampoo, Baby Soap, Baby Shower Gel, Diapers, Baby Moisturizers, Baby Powders, Baby
- Tools & Appliances: Face Massagers, Face Rollers, Facial Tools, Dryers, Straighteners, Curling Irons & Tongs, Makeup Brushes, Facial Sponges, Face Brush, Lip Brush, Eye Brush, Cotton Buds and Balls, Shower Caps, Nail
- Home Care Items: Scented Candle, Mosquito Repellent, Antiseptics, Air Fresheners, All Purpose Cleaners, Duster & Cloths, Detergents, Liquid Wash, Dish Wash, Fabric Dyes, Stain Removers
- Stationeries: Notebooks, Diaries, Pen Sets, Pencil Sets, Rubber Sets, Ruler, Personal Planners, Drawing Books, Watercolors, Pastel colors, Calculators, Whiteners, Highlighters, Sticky
- Books: Science & Fiction, General Knowhow, Romance, Action & Adventure, Drama, Classic.
- Toys & Kids: Dolls, Soft Toys, Racer Cars, Chess, Bowling Sets, Study Chairs & Tables
- Gifts: Story Books, Keyrings, Cards, Showpieces, Wine & Shot Glasses, Coffee Mugs, Wall Clocks, Picture Frames, Lamp Shades, Paper Weights, Gift Boxes, Pen Stands, Wall
- Herbal Products: Herbal Tea, Herbal Oils, Herbal Face Packs, Herbal Face Wash, Herbal Soaps, Herbal Shampoo, Herbal Face Mask, Herbal Lip Balm, Herbal Moisturizers, Herbal Sunscreens, Herbal Lip
- Quick Food Items: Chocolates, Chips, Cakes, Beverages, Butter, Cheese,
- Supplements and Nutraceuticals Products: Digestive Supplements, Hair Supplements, Vitamins, Omega 3, Protein Powders and Shakes, Antioxidants, Joint & Bone Care, Cod Liver Oil, Low Carb
- Daily Essentials: Pendrives, Phone Chargers, Earphone, Headphone, Computer Mouse, Keyboard, Safety Pins, Portable Alarm Clocks, Toiletries, Pencil Batteries, Scissors, Duct Tape,
- Popular Groceries: Ready-to-cook meals, Coffee & Tea bags, Eggs, Frozen Fruits and Vegetables, Spices, Corn Flakes, Instant Noodles, Honey, Jams, Sauces, Custard, Packaged wheat, Packaged Flour, Packages Rice & Cereals, Dry Fruits, Edible Oils, Salt & Sugar.
9. Market Potential
9.1. Beauty & Personal Care
According to a joint study by ASSOCHAM and MRSS India, the market size of India’sbeauty cosmetics and grooming is expected to touch US$ 35 billion by 2035 from the current level of US$ 6.5 billion. Meanwhile, another report by Research and Markets named “India Cosmetic Market Overview” (November 2016), the country’s cosmetic market was growing with a CAGR of 17.06% over a period of five years. The personal care industry makes up 22% of India’s market for consumer packaged goods and experts agree that India is full of opportunities for many beauty and personal care companies.
The Ayurvedic market is estimated to be at INR 4,500 crore at present. The herbal products forms 6-7% of the overall personal care products market currently while the estimates are that it could grow to about 10% of the segment by FY20 as the trend accelerates. Thus, various players are rebooting their business strategies and investing in new products or making new acquisitions to reap in the benefit of the herbal age.
With a CAGR of 40% per year, the spa industry is the sub sector with the most significant growth prospects among all personal care sub sectors in India.
9.2. Book Retail
According to Nielsen, the domestic publishing market had as many as 9,000 publishers and over 21,000 book retailers in 2015. The report had valued the domestic book market, including textbooks at $3.9 billion in 2015 and the industry had been clipping at 20% annually.
Brick-and-mortar book stores are rethinking their strategy to take on competition from online market places, which lure book lovers with attractive discounts. Owing to the ease of shopping on the internet, higher discounts and availability of books, Indians are increasingly turning to online stores for their book purchases. The trend portends trouble for traditional brick-and-mortar book stores where storage space and margins are less.
Crossword, too, is unhappy about the high discounts offered by e-commerce websites. “Slashing prices to more than 50% entices a customer to buy the book online. We, as book stores, cannot offer such high discounts due to higher rentals, manpower and other expenses incurred in opening a book store,” said Kinjal Shah, CEO of Crossword in 2015.
Books have emerged as an instrumental category for e-commerce business, accounting for 15% of the overall e-commerce trade in 2015, just trailing behind electronics (34%) and apparel and accessories (30%). A consumer data survey shows that on average people read books 2.1 times a week while nearly two-thirds read the book occasionally; interestingly, 56 per cent of the respondents bought at least one e-book a year and nearly half of these bought at least 3-4 e-books a year indicating a growing demand for digital books.
9.3. Pharmacy Retail
For a few years now, the way people buy their medical supplies has been changing. Local stores have become spiffier as branded chains have mushroomed across neighbourhoods. Now, as a flock of online players raises the pitch with hard-to-beat offers, chains such Apollo, MedPlus and others are introducing new offers and coming up with value-added services to keep customers loyal and expand their footprint. Branded stores make up for less than a percent of the total while the rest are stand-alone mom and pop style stores. Branded stores are a small percentage of the total, but they are driving change in the vast unorganised segment of the industry.
The pharmacy chains have built their brand values on assured quality, better service and discounts. But the traditional retail challenges of high rentals and rising overhead costs combined with the growing threat from online pharmacies such as Netmeds, Bookmeds and such others is forcing them to scale up and move to a service-plus model where loyalty points, discounts and other allied benefits help acquire and retain customers. Pharmacy chains benefit from economies of scale and generally have a better revenue mix because of a wider assortment of health care and hygiene products. Scaling up means pressure on costs including higher lease rent and salaries.
Revenue of pharmacy retail in India from 2008 to 2018 (in million U.S. dollars)
Sources