Actives Innovation Grows in India

Dec 22, 2009 | Contact Author | By: Katie Schaefer
Contact the Author
Save
This item has been saved to your library.
View My Library
(click to close)
Save to My Library
Title: Actives Innovation Grows in India
  • Article

Frost & Sullivan has reported that India's beauty market is a "fertile breeding ground" for active ingredient companies offering novel products and easier-to-use formulations. Ingredients with increased functional benefits and multi-application profiles are in demand, the firm wrote in its "Strategic Analysis of the Indian Personal Care Active Ingredients Market," and raw material companies are penetrating this market via better formulations with multiple benefits.

UV ingredients in particular are fueling the demand for end-product skin creams and skin lightening lotions, said Frost & Sullivan research analyst Natasha Telles, in this report. She added, "This trend is expected to continue as customers become more aware and manufacturers are compelled to use targeted ingredients for specific formulations."

The success of raw material suppliers will depend upon differentiating their ingredients and functionalities, which has resulted in innovations ranging from silicone elastomers and the delivery of antiaging actives, to nutricosmetics developed to impart anti-wrinkle and skin-smoothing properties.

According to the report, innovative product development and market penetration are crucial to enhancing the growth of mature product segments such as conditioning agents. However, in younger markets such as UV and exfoliating ingredients, diversification and market expansion are expected to aid in revenue generation.

"Personal care active ingredient manufacturers need to focus on the scientific efficacy and brand awareness of their products by constantly remaining a step ahead of market trends," noted Telles in the report. In addition, utilizing raw materials provided by the Indian topography such as turmeric or exotic actives will connect regional consumers to innovative products, which will make an emotional connection and thus further the market penetration.

Once established in the market, participants must work to retain their position since competition is price-based, stated the analysis. And in addition to inadequate product differentiation, the lack of intellectual property or trademarks for ingredients in this region is a challenge. This deficiency of proper legislation has hindered the growth in this sector, both internally and externally. Indian exporters find it difficult to export ingredients to Western markets because they cannot claim ownership of their products. While India is a major source of raw materials, it does not claim royalties or copyrights on its locally sourced actives, which makes it more difficult for domestic manufacturers to effectively compete.

Thus, in order to compete, Telles stated that it is important to develop products that can be positioned to create brand loyalty and thereby retain customers to create niches that will reduce the intensity of competition. She added that "showing superior ingredient backing through academic research and clinical trials would result in customers developing ingredient as well as supplier loyalty, enabling [market] participants to distinguish their products."