SWOT

Analysis of
Lakme
Since
market
liberalization,
several
multinational companies,
such as Revlon, Coty,
Oriflame, Chambor, Avon,
Yardley,
Nina
Ricci,
Garnier Laboratories, and
L'oreal, have entered the
Indian
market.
These
companies initially cashed
in on their international
brand image; however,
repeat purchases were not
forthcoming because the
products were not priced
competitively.
Consequently,
these
companies became pricesensitive and most of the
international brands are
now priced competitively
in the Indian market.
The
colour
cosmetic
segment which has Indian
players such as Lakme
Lever, Tips & Toes and
Shenaz
Hussain
and
multinational
company
players such as J. L.
Morrison, Ponds, Unilever
and Colgate Palmolive,
offers
the
highest
competition.
Domestic
players like Lakme, Tips &
Toes and My Fair Lady,
mainly
dominate
this
market.
Revlon has a market share
of 80% in the premium

market. Lakme is the

overall market leader in
the
colour
cosmetic
segment (lip care and nail
enamel) with a wide range
of products and prices,
both. The organised colour
cosmetics
market
is
estimated at Rs 340 crore
currently. Revlon's sales
account for Rs 60 crore of
that. Lakme leads the
market with sales of Rs
100 crore. Lakme, has
recently joined forces with
Hindustan Lever Limited
(HLL) and calls itself
Lakme-Lever.
Other international brands
in the sector include
L'Oreal,
Revlon,
Maybelline, Benckiser and
Avon with a major part of
the rest, some of them
engaged in the multi-levelmarketing model for their
products.
The most important global
players are already in India
(except perhaps Estee
Lauder, Mary Ann Kay,
Kao and Body Shop) and
are in an advanced stage of
market development. They
are already exploiting
prospects based on imports
of
active
ingredients,
packaging and completely
built products. In that
regard, new entrants have
to contend with serious
competition in India from
local as well as global
players.

Multinationals feel that

Indian companies - Lakme,
Pond's, Nivea-makers J.
L.Morrison and Tips &
Toes makers Paramount
Cosmetics - have not
identified the changing
needs of the new Indian
woman. It is therefore that
Switzerland's
Torstone's
Chambor,
Sweden's
Oriflame, USA's Avon
Cosmetics,
Revlon,
Benckiser (Coty Vitacare),
Paris-based Escada group
and Laboratories Garnier
(Synergie) are ambitiously
fishing in the Indian
waters.
It
is
not
coincidence that many of
these MNCs entered the
Indian market in the midNineties. Fired with the
zeal of changing the
complexion
of
the
cosmetics market, they are
fuelling the change using
satellite
television,
women's magazines and
beauty pageants.
Maybelline competes with
Revlon and Lakme in the
colour cosmetics market in
India. Revlon too has
grown 65 per cent to
strengthen its share to 13
per cent during the period.
As per the data, Lakme's
share stands at 34 per cent,
and that of Elle 18 is 25
per cent - both of which
have suffered a de-growth
over the previous period.
The lip and nail colour
market, at Rs 107 crore,

has registered a growth of

11 per cent.
Mass market products
account for a major share,
around 70 per cent, while
the premium segment
accounts only for a mere 9
per cent in lipsticks and 5
per cent in nail enamels.

STRENGTHS:
1. local brand of

2.

3.

4.

5.

specific
a
relevance to
India.
Strong
R&D
capability,
well
linked
with business.
Integrated
supply chain
and
well
spread
manufacturin
g units.
Ability
to
deliver
Cost
Savings.
Access
to
Unilever
global
technology
capability and
sharing
of
best practices
from
other
Unilever

WEAKNESSES:

1. Price

positioning in
some
categories
allows for low
price
competition
2. Varying
quality range
in
its
products.
3. Falling Quality
of
Lame
salons
Opportunities :
1. Brand growth

through
increased
consumption
depth
and
frequency of
usage across
all categories
2. Upgrading
consumers
through
innovation
tonew levels
of quality and
performance.
3. Building brand
image
by
collaborating
with
top
designers
in
Lakme
Fashion week

Threats :
1. Aggressive
price
competition
from local and
multinational
players.
2. Spurious/coun
terfeit
products
in
rural
areas
and
small
towns.
3. Non Existence
of
brand
image in long
Run