With New Parent, The Body Shop Eyes Rs 1,100-Crore Revenue In 3-5 Years

The Body Shop International Ltd. has set a bold target to achieve Rs 1,100 crore in revenue in India within the next three–five years, buoyed by the strategic backing of Auréa Group, which acquired the iconic brand last year. It will also double its store count, step up local sourcing and offer more cheaper options, especially in quick-commerce channels, in a bid to woo budget-conscious consumers tightening belts amid high inflation.

"India is a growing market and is at the heart of our growth strategy," Mike Jatania, co-founder and executive chairman of Auréa Group, told NDTV Profit. "We see it as a huge global opportunity, akin to the US and China," he said, exuding confidence that India would climb from the fifth position to become the third-largest market for the global brand.

The British skincare and cosmetics retailer, which entered India in 2006, now has about 200 stores in 70 cities. It aims to have 400 outlets by 2030 with a focus on both big cities and smaller towns. Skincare comprises nearly 40% of the business, while fragrance and make-up account for 10% each. The Body Shop is currently exploring new categories like haircare, ingestible wellness products and sun care.

Having personally experienced delivery in just nine minutes, the Indian-origin co-founder said one of the key focus areas of the new management would be to reach consumers quicker. The company has also broadened its product lines to emphasise lotions and fragrances priced as low as Rs 500, especially meant for the quick-commerce channels. It offers a pack of four mini fragrances for Rs 1,200, a price point that Jatania feels is "very attractive" for shoppers willing to spend little for a premium product.

"While every channel of distribution has a role to play, quick commerce is particularly very exciting," he said. "Certain channels require specific price points — especially for the value-conscious Indian consumer — and we will need to deliver on these aspects to beat competition and drive growth."

Despite challenges from new entrants and economic headwinds like high inflation-led demand slump, Jatania said that the India's $21 billion beauty and personal care market is the fastest growing in the world. The market is expected to reach $ 34 billion by 2028, with premium beauty expected to become a $3-3.2 billion market, according to Redseer Strategy Consultants.

Overall, e-commerce sales currently comprise 30% to sales and Jatania expects the store-to-online ratio to touch 50:50 in the next five years.

Body Shop's strategy aligns with industry trends, where companies are rolling out mini versions of their premium offerings to appeal middle-class aspirational customers who are more price sensitive, although the strategy may dent companies' typically fat profit margins.

The desire for "affordable luxuries" often emerges during tough economic times. Leonard Lauder, former chairperson of Estée Lauder, coined the term "lipstick index," which economists now use to describe a slight economic bump led by budget-conscious consumers seeking relatively small splurges like cosmetics and perfumes.