French cosmetics major L’Oreal is going Indian with a vengeance. The firm, whose Indian unit has a turnover of Rs 1,000 crore, will spend the better part of this year launching some locally-developed products. This is part of its strategy to hook the Indian buyer.
“Almost 70 per cent of our launches this year will be of products that are locally designed and developed,” says Jacques Challes, MD, L’Oreal India. “The balance 30 per cent will be products from the international stable,” he added.
L’Oreal has already taken a step in that direction with the launch of a new fairness cream called Garnier Light Ultra and is also looking at launching a locally-developed kohl under the Maybelline umbrella. A few months down the line, a few skincare products targeted at men in India will see the light of day.
The research and innovation center, the sixth such global facility for L’Oreal, will come up in Mumbai by the end of this year, says Challes. “In many ways this highlights how important the Indian market is,” he says. “With a team of qualified people sitting here, developing solutions that are relevant to the Indian market will only grow.”
In keeping with this strategy, the firm is investing across the product value chain right from research and innovation, manufacturing, distribution and marketing – empowering the subsidiary in the process. It has also sanctioned investments of over 10 million euros (that is, over Rs 64-65 crore) in each of these areas, Challes says.
While competitors such as Procter & Gamble and Unilever have had a headstart over L’Oreal in terms of putting an India-specific strategy in place, the $28.08-billion cosmetics giant is in no mood to let its competitive advantage get in its way. Challes argues that the Indian units of P&G and Unilever have been around longer than L’Oreal. “We came to India 15 years ago. Our compounded annual growth rate in the last decade has been about 30 per cent,” he says. “We intend to maintain this pace of growth. In fact, in the next 10 years we should be amongst the top five in the L’Oreal universe,” he says.