With Sugar Cosmetics investment LVMH eyes burgeoning cosmetics and toiletries market in India, opines GlobalData

Following the news that India-based omnichannel beauty startup Sugar Cosmetics has closed $50m Series D funding led by the Asia fund of L Catterton, part-owned by luxury house LVMH;

Bobby Verghese, Consumer Analyst at GlobalData, offers his view:

“LMVH invested in Sugar Cosmetics owing to the startup’s product development capabilities, stellar growth in both online and offline retail within a short span of its inception, and good operating metrics. Reportedly, Sugar Cosmetics has a network of 40,000 retail outlets across 550 Indian cities. Through this deal, Sugar Cosmetics will leverage the value-creation and international brand-building expertise of LMVH and L Catterton to power the next phase of its business expansion.

“The move comes at a time when the Indian cosmetics and toiletries market is at an inflection point. The market expanded by 5.6% CAGR during 2015-2020, with value sales rising from $11.1bn in 2015 to $14.6bn in 2020, when COVID-19 arrived. With the pandemic restrictions easing gradually, GlobalData forecasts the cosmetics and toiletries sales in India to grow by 7.2% CAGR over 2020-2025 to reach $20.6bn in 2025.

“Despite being a niche distribution channel, e-retailing gained popularity during the COVID-19 pandemic and is projected to outpace all other channels, expanding by 13.8% CAGR over 2020-2026. This reflects in GlobalData’s Q4 2021 consumer survey (published in December 2021 with 495 respondents) wherein 38% consumers said they typically purchased beauty and grooming products from supermarket/retailer websites. Startups such as Sugar Cosmetics and Nykaa are well positioned to tap the fast-paced growth in online beauty retail through their mastery of the omnichannel distribution model.”

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