Updated on: Thursday, December 23, 2021, 04:27 PM IST

Teji Mandi Explains: Tata's re-entry in beauty biz to stir up others

Teji Mandi Explains: Tata's re-entry in beauty biz to stir up others | Photo: Pexels

Teji Mandi Explains: Tata's re-entry in beauty biz to stir up others | Photo: Pexels


Just months after winning the bid for taking over Air India, Tata group now has plans to enter the beauty business it exited 23 years ago. Let’s read up!

What’s Happening?

Startups like Nykaa, Purplle and many others have made their big name in the line of beauty products. With growing disposable income and youth interest, the cosmetics industry is flying on the highest wheel. In just eight years, Nykaa is now worth a $13 billion business. This has also inspired Tatas to get into this business yet again.

In 1953, Ratan Tata’s aunt Simone Tata created Lakme. It was India’s first beauty and cosmetics brand that received much recognition. Later on, in 1998, Tata Group sold Lakme to Hindustan Unilever. Since then, there has been an absence of the group in the beauty genre. Finally, the salt-to-software conglomerate now has decided to re-enter the space with in-house products under the brand ‘Trent’. It plans to sell the products through various existing channels like Westside and Tata Cliq.

How Does It Bother You?

As a consumer, more players mean a wide range of offerings to choose from. This could also lead to competing on pricing! Tatas’ re-entry will be fruitful for this space because it is a trusted brand. If it brings something new to the plate, everybody will taste it. Currently, Nykaa is the largest online platform for beauty products. With Tatas’ re-entry, there will be meaningful competition in this space.

According to Statista, India’s cosmetics and beauty market are estimated to double by 2025 from $11 billion in 2017. Noel Tata, in an interview, was quoted saying, “Beauty products will be a key focus for us from now on along with the footwear and underwear segment. Extended product line and experimentation with formats for these products are in the offing as we see these as growth areas in retail.”

What Lies Ahead?

Capital expenditure won’t be an issue for the Tatas, but the current competition from Nykaa and others will be a competition for the conglomerate. Given that the beauty and cosmetics space is a high margin business, grabbing a market share in this sector will be a real task. But again, Trent is not a small company. The company’s shares have jumped nine-fold under Tata’s leadership since 2014. As long as Trent follows the market and audience’s needs, it will continue to remain a strong contender in the race.

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Published on: Thursday, December 23, 2021, 04:27 PM IST