Tata plans expansion of beauty sector in latest tech push from betEyes retailer with skin analyzers, virtual test on kiosksTata targets at least 20 stores next yearCompany will face competition from Sephora, Nykaa
NEW DELHI, Nov 16 (Reuters) – India’s Tata Group plans to open at least 20 “beauty tech” stores where it will use virtual makeup kiosks and digital skin tests to lure young and wealthy shoppers to buy premium cosmetics. quality, according to a company document and a person familiar with its strategy.
The move pits Tata, whose interests range from automobiles to jewelry, against LVMH’s Sephora (LVMH.PA) and its domestic rival Nykaa (FSNE.NS) for a share of the fast-growing personal care and beauty market valued at $16,000. million dollars in the second country in the world. most populous country.
Tata is eyeing what he calls a “beauty enthusiast” in India between the ages of 18 and 45 who likes to shop for foreign brands such as Estee Lauder’s (EL.N) MAC and Bobbi Brown, according to the document, which lists The Honest Company (HNST.O), Ellis Brooklyn and Gallinee as potential partners. Tata is in talks with more than two dozen companies to supply exclusive products to the new stores, according to the person familiar with the strategy, who did not name specific brands.
Tata declined to comment on its planned beauty shops and the content of the document seen by Reuters. Representatives for The Honest Company, Ellis Brooklyn and Gallinee did not respond to Reuters requests for comment.
The store’s opening plans, still under wraps, follow the recent launch of Tata’s beauty shopping app, called Tata CLiQ Palette. The company is already in the brick-and-mortar retail business in India, where it has joint venture partnerships with global brands such as Zara and Starbucks.
The stores will have a bright red facade displaying the Tata CLiQ Palette brand, and 70% of the products inside will be skincare and makeup, according to the Tata document. Inside the stores, Tata plans to install technology that allows customers to try on dozens of lipstick shades virtually on screens and get digital skin tests to find out which products might work best for them, according to the document.
The technology isn’t new and is used by other beauty retailers around the world, but this foray into what industry insiders refer to as “experiential retail” is still a relatively new concept in malls and convenience stores. the main streets of India.
“Experiential retail will be a big thing in India as more customers will spend their free time in such stores,” said Pankaj Renjhen, deputy managing director of India-based consultancy Anarock Retail. “In the premium segment, where a customer is looking for things beyond price, experiential commerce helps trigger impulse purchases and can attract them.”
Renjhen added, however, that “the product and the brands have to be unique and good, if they’re not, she (the customer) won’t come back.”
As India’s economy grows and people return to stores after the coronavirus lockdowns, Tata is looking to target relatively young and wealthy customers who like to shop in comfortable surroundings and are willing to pay the price of label by premium international brands. Tata calls such customers “non-hagglers” in the document seen by Reuters, in contrast to most Indians who buy cheap local brands of lipstick or skin cream at small, mom-and-pop beauty shops where haggling is common. for discounts.
The company targets buyers with an annual income of at least Rs 600,000 ($7,358), which is more than triple the median income of $2,000 a year among India’s 1.4 billion people. The new stores should boost “cross-channel sales as a leading beauty tech destination for Gen Z and Millennials,” the Tata document says.
India’s $16 billion beauty and personal care market is much smaller than China’s $92 billion, but market research firm Euromonitor estimates India’s will grow an average of 7% a year for the next few years.
“The Indian beauty market is by no means saturated,” said Devangshu Dutta, director of New Delhi-based retail consultancy Third Eyesight. “If you’re investing for the long term, with higher income profiles and changing lifestyles in mind, there’s a long road of growth ahead.”
Tata faces strong competition to take advantage of projected growth. Sephora, which has been in India for about a decade, has 26 outlets selling beauty and fragrance brands. Reliance, run by billionaire Mukesh Ambani, has a long-term plan to open 400 beauty shops, the first of which could open inside a Mumbai mall as early as next month, according to a person familiar with its plans. Reliance did not respond to a request for comment.
Indian beauty retailer Nykaa, backed by private equity firm TPG, asset manager Fidelity and backed by a Bollywood celebrity, has said it plans to open up to 300 stores, out of a current 124. The 10-year-old company, which started as an online-only retailer, garnered industry attention last year when its shares nearly doubled after listing on the Mumbai stock exchange, valuing the company at $14,000 at the time. millions.
Tata’s first “beauty tech” store is likely to open in March, with a further expansion running into the next fiscal year from April and could open up to 40 stores, according to the person familiar with the plan, who He added that the company will start with larger cities like New Delhi before considering smaller venues.
However, Tata is struggling to persuade owners of high-end malls, where space is at a premium, to take on a new beauty store where one already exists, if it doesn’t have enough unique products or another differentiator to attract new customers. and increase foot traffic to the mall as a whole, according to another person with direct knowledge of the discussions.
Along with exclusive product launches, Tata is focusing on in-store technology, which the document seen by Reuters describes as a “key differentiator.”
One of the tech tools will be a device Tata calls a “skin analyzer,” a device with a mirror that can read and analyze a customer’s skin to reveal 25 to 30 attributes that can help choose products. There will also be “virtual try-on” kiosks for eye and face makeup. Between them will be a circular stand with inserted lipsticks; When someone picks one up, a digital mirror screen on the front will automatically begin to show how the color tone will appear on the face, eliminating the need for repeated manual testing before a purchase.
Tata is also testing the use of so-called geo-fencing technology to allow its store staff to detect when a customer using its app enters and share purchase history and wish lists with staff to make better recommendations, the company said. person familiar with the plans.
Reporting by Aditya Kalra in New Delhi Editing by Bill Rigby
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