US-based brands operating in the premium sector now have easier entry into the Indian market through collaboration with online Indian retailers under the new India-US deal where a zero duty is imposed on luxury goods. According to experts, imported cosmetics may cost less, increasing competition with the premium domestic beauty brands.
Indian retailers such as Nykaa, Reliance’s Tira, and Shoppers Stop are already exhibiting growth as they push premium products on the platforms by making deals with luxury brands, thus increasing their premium product offerings.
Premium Markets Growing as Consumers Choose Quality
The Indian premium beauty market, which is valued at USD 1.6-1.8 billion, is expected to spike to USD3-3.2 billion by 2028, outlined the Nykaa-Redseer report. This is attributed to consumers’ rising preference for luxury products with advanced ingredients and science-backed formulations. With better disposable incomes, increased social media awareness, and an interest in projecting a higher-status lifestyle, consumers are curating beauty regimens centered on safety, and results.
Online platforms like Nykaa and Tira are acquiring the rights to provide products from foreign brands, prompting greater consumer interaction.
To compete against global brands, domestic Indian brands, especially D2C startups, will have to think about building a credible reputation, while adhering to global safety standards. New consumers are far more aware of the harm caused by chemicals on the body, and now are moving towards more natural formulations. Premium brands that have set their products apart with more advanced ingredients that offer multiple benefits, and show consistent positive results are more likely to be trusted among consumers.
Market Competition is Already Tough for Premium Brands
Big international players such as L’Oréal and Estée Lauder, and other major cosmetic companies are finding the market crowded with push from various new brands and online platforms. According to the latest report, sales growth for global beauty giants in FY25 has more than halved compared with the previous year. L’Oréal’s growth in India slowed sharply to just 5% in FY25, down from 14% a year ago, while Estée Lauder’s growth dropped to 7%, from 19% previously. The Indian beauty and personal care market is still progressing with an upward trajectory at a steady pace even as the premium market is facing increased competition.
