New brand of Modi Revlon to target mass market, take on rivals like Lakme, L’Oreal
Mar 25, 2014
Cosmetics maker Modi Revlon will soon roll out a new brand of colour cosmetics priced about 60% cheaper than the existing Revlon range and expand its reach to smaller towns to take on bigger rivals such as Lakme and L’Oreal.
The rollout, in the April-June quarter, will focus on volumes, said UK Modi, chairman and chief executive at Modi Revlon.
“Our pricing and packaging was an impediment to growth…even our distribution was limited,” he said. A 74:26 joint venture between the UK Modi group and Revlon of the US, Modi Revlon is yet to establish an aggressive national presence. Modi said the brand has been developed by Revlon US for India, but declined to divulge the brand name.
The brand will sell nail colour at about Rs 60 each and lip colour at under Rs 200, and Modi is banking on it to boost volumes and get a foothold in tier-II and -III cities.
“Maybe we should have done this earlier… it required a lot of support from Revlon US and took two years to develop,” he said.
For Modi Revlon, which has been operating in the country since 1995, this is a second shot at the mass market.
In 2002, it had launched a brand of lip and nail colour called StreetWear for teenage consumers at about half the price of Revlon, to take on Hindustan Unilever’s Elle 18.
But the brand could not make much headway because of limited focus on distribution and marketing. Modi said StreetWear would not be phased out after the launch of the new brand, at least not in the immediate months.
French cosmetics major L’Oreal, one of the top two cosmetics players in India, is operating independently in the country. Japanese cosmetics firm Shiseido too reportedly plans to set up a wholly-owned subsidiary to ramp up its presence in the country. However, Revlon has so far steered clear of entering the country as an independent subsidiary.
Asked if Revlon would come to India on its own, Modi said the joint venture was a lifetime arrangement between the two, adding that they could split only if both the partners mutually agreed to do so. “But there is no such discussion at the moment,” he said.
Though rivals in the cosmetics space such as Lakme and L’Oreal have broadbased their products with an equal focus on skin- or hair-care products as with colour cosmetics, Revlon has not focused much on its hair-care range or fragrances in India.
“Colour cosmetics will be our core focus area…this is in line with Revlon’s global strategy,” Modi said, adding that 70% of the unlisted firm’s sales are contributed by colour cosmetics. The total cosmetics market in India is valued at $8.2 billion, or about Rs 50,245 crore, growing 11.4% a year, according to Data Monitor.
Experts say growth in India is being fuelled by rising middleclass consumers who don’t want to compromise on looking good, increasing numbers of women joining the workforce, and higher number of departmental stores at modern retail stores and malls.
Last year, international brands Bobbi Brown Cosmetics and Bottega Di Lungavita forayed in the country.
Source: India Times