News: Indian retail majors to enter private label beauty biz

(BL 03/02/2007) New Delhi - Retail giants Pantaloon, Reliance and Bharti-Wal-Mart are all set to venture into the private label beauty products business.

"The three retail majors - Reliance, Pantaloon and Bharti-Wal-Mart - are in talks with us to outsource the manufacturing of their private label beauty products to us at our upcoming unit in Haridwar, slated to be operational by July," confirmed Mr Sandeep Ahuja, CEO and Director, Personal and Healthcare, VLCC, the fitness, health and beauty firm, headquartered in Delhi.

He, however, declined to set a definite time line to begin manufacturing beauty products for the retail giants.

Meanwhile, official sources at the Future Group's retail arm, Pantaloon Retail (India) Ltd, said, "We are already into private labelling of various products in the foods and grocery category. Getting into private labelling of beauty and health products is only a natural transition. In fact, Pantaloon has always been known to explore different formats and has already forayed into the health, beauty and fitness segments."

"As far as the beauty format is concerned, we already have a service format Star and Sitara Salons and have recently forayed into retailing beauty products of other companies through our exclusive outlets - Turmeric. So, starting our own private label business is just a matter of time. We are in talks with VLCC to outsource manufacturing of these products to them, since production is not our core competence." Pantaloon currently has six to seven Turmeric outlets that are a part of its Health Village (holistic wellness and beauty centres), as well as in a cut-in format at its Food Bazaar stores offering products such as colour cosmetics, fragrances, herbal and speciality skin items, hair products and bath accessories.

Long-term aim

"Since getting into the private label business is a part of Reliance Retail's long-term aims, across formats, foraying into private labelling of beauty products is certainly on the cards," said industry sources close to the development. While declining to elaborate further, the source said that it was certainly in talks with VLCC to outsource manufacturing of the products to the latter.

Bharti-Wal-Mart, however, was unavailable for comments. The domestic beauty industry is touted at Rs 6,000 crore, excluding colour cosmetics. According to an Indian market survey done by the US-based magazine Stat USA the current per capita expenditure on beauty products is approximately 68 cents as opposed to $ 36.65 in other countries. The domestic beauty market is growing at around 20 per cent on a year-on-year basis.