Business Featured

How to Start a Cosmetic Business in India

By Shreya Durgan

Cosmetics business in India is a great opportunity. However there are many aspects to consider and keeping up with the latest trends can be difficult.

Whether you are starting a brand like Mamaearth or a company like Sugar Cosmetics, this is a perfect guide. It also shares some tips and tricks on how to stay afloat.

The cosmetics industry of India is a huge US$7 billion industry. It is projected to grow at a CAGR of 5.4% from 2018-2024. Therefore even a small portion of it can be extremely rewarding.

Step 1: Research and identify your target market

Step 2: Register your Business and Apply for the Necessary Licenses

Step 3: Find a Supplier

Step 4: Prepare a Business Plan

Step 5 : Test Market the product

Step 6: Make a marketing strategy

Step 7 : Let's talk Business.

Step 1: Research and identify your target market

Identifying customer's unmet demands is crucial to succesfully start a cosmetics business. This is easier said than done. This can only be done by analysing the customer's behaviour, perceptions, core concerns, influences and so on.

For example, analysing how and why majority of customers percieve ayurvedic products over chemical based products.

In addition, India has the majority population of young people, who are the main consumers of cosmetics, will continue to grow over the next few years.

The Indian government has also been taking steps in recent years to promote entrepreneurship and improve access to finance for entrepreneurs like you.

Cosmetic products have been used for centuries by women to enhance their natural beauty.

In recent years, men have also started using them for grooming purposes.

As a result, now you have a much wider customer base to target.

Moreover, there are many factors that have encouraged the growth of the cosmetic industry in India, such as rising disposable income, changing lifestyles and the increasing number of women entering the workforce.

There are various ways to find out the market demand, but the most important and effective way is through surveys.

Surveys are one of the best ways to get an objective opinion about what people think about your product or service. It is a very simple, inexpensive and quick way of getting feedback.

Step 2 : Register your Business and Apply for the Necessary Licenses

The first step to start a business is to start. Which means that take a step forward and get your business registered.

You can fill out the form on your right and provide the basic details to get a free consultation.

After that, an expert will get in touch with you and help you with the complete registration process online.

The suitable legal structure for a cosmetic business can be any of the following :

For two or more founders

Private Limited Company
Limited Liability Partnership
Partnership

For one founder

One Person Company
Sole Proprietorship

Once you have registered your cosmetic business legally, you might want to apply for the following licenses depending on applicability:

GST Registration (if required)
Shop and Establishment Act
Trademark (to protect your brand)

Step 3: Find a Supplier

In order to be successful, you need to develop a strong supplier network that can provide you with the products that your customers want at a reasonable price. Alternatively you can also set up your own plant if you have a very tested product and want to start with more funds.

If you are choosing a supplier, choose a reliable one. Moreover, they must be able to meet your production and delivery deadlines.

There are three ways to find suppliers for your cosmetic business in India.

Local Wholesalers:

You will be able to identify the local wholesalers by having a word with your competitors in the market.

For this purpose, you cannot go directly. Thus, disguise yourself as a surveyor or researcher to know about all their suppliers.

Social Media:

Social media platforms such as Facebook, Instagram, and LinkedIn are great sources of information on different brands and their suppliers.

You can also use hashtags such as #beautyproductsupplier or #cosmeticsupplier on Twitter or Google Plus to find suppliers that way.

Online Directories:

There are many online directories that you can use to find potential suppliers for your business, such as TradeIndia, Alibaba, BizTradeIndia etc.

These websites let you browse through different products and make contact with the right people easily.

Step 4: Prepare a Business Plan

It is important to prepare a plan for your cosmetics business in India. This will help you run your business and make it more successful.

To make sure that you are prepared for success, here are some steps to follow when creating your plan: -

Define your goals: What are you trying to do with your business? What do you want it to look like? Are there any specific areas that you want to focus on? Defining these goals will help guide the rest of your planning process.
Create a timeline: Once you have defined what you want from the future of your business, you can create a timeline to show how you will achieve your goals.
Create an action plan: One thing that can often get forgotten when planning for success is the action plan! Make sure that there are specific steps for what will happen when you start the business and specific dates for when these actions will be done.
Track your progress: Once you have created your plan, it is important to make sure that you keep track of your progress. Use websites like google docs or printables to help keep track of all your work.
Make a risk analysis: One thing that can often get forgotten when planning for success is risk analysis! Make sure that there are substantial plans in place on how to handle any risks that may arise.