Japanese luxury beauty company Shiseido is planning to start manufacturing in India as part of its expansion strategy.It will be joined by global peers such as Estée Lauder Companies and The Body Shop, which are also exploring local production to tap into the world’s fastest-growing beauty market.Sanjay Sharma, country head of Shiseido Group in India said the move will give the company key advantages in a rapidly growing market.“Local manufacturing would provide inherent benefits, including lower duties,” he said. Sharma added that the decision is part of a global strategy and will depend on the company’s scale in India, as reported by ET. Shiseido currently imports its entire product range into the country.India’s luxury beauty market, valued at $800 million in 2023, is expected to reach $4 billion by 2035, according to a report by consulting firm Kearney and luxury retailer LuxAsia.With China’s beauty segment facing slower growth, international brands are increasingly turning their attention to India’s expanding consumer base.“As scale builds up, makers of luxury cosmetics are starting to make in India. A few have already set up such facilities,” Sharma said. The past year has seen a flurry of global beauty labels – Rare Beauty, Fenty Beauty, Anomaly, H&M Beauty and Huda Beauty entering the Indian market.Industry executives say even celebrity-owned brands are looking for exclusive local partnerships, often starting with third-party manufacturing arrangements.Other multinational companies are also taking steps toward “Make in India.” Estée Lauder, which owns MAC, Bobbi Brown, and Clinique, has already produced some limited-edition items locally through third parties. Its global president and CEO, Stéphane de La Faverie, recently said the company had approved a “massive investment” in India to meet growing aspirational demand. He added that introducing smaller, more affordable packaging would be key to its local strategy.The Body Shop, through its partner Quest Retail, has introduced India-specific product lines produced domestically. Similarly, some American brands have begun local manufacturing of select lip colours and foundations, offering them at prices up to 25% lower than imported lines.Shiseido, which already has 11 manufacturing plants across Japan, China, Taiwan and the US, is expected to gain from reduced import duties and faster supply chain cycles once production starts in India.Its premium French label, Nars Cosmetics, has recently expanded retail partnerships with Tira and Nykaa and opened its second standalone store in the country.India currently imposes a 20% basic import duty, 18% GST, and a 10% social welfare surcharge on cosmetics. Local manufacturing could help companies significantly reduce these costs.
