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“There is low, medium and high cost market in India”
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June 28 , 2019
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 Clariant Active Ingredients is a business segment of Clariant specialising in active ingredients development for the personal care and cosmetics industry. The company held a symposium in Mumbai recently wherein experts from across the world made presentations. One of the experts, Julie Droux, senior technical marketing specialist, BU Active Ingredients – BU ICS, France, Clariant, in a conversation with Manjushree Naik spoke about the Indian market for active ingredients, plant-origin active ingredients, future prospects for the company in India and more. Excerpts:
Why is there a difference in the world market and the Indian market when it comes to product demand? For instance, sunscreen and antiperspirants seem to be there worldwide, but in India, the market is more about skin lightening and anti-pollution.
The needs of different countries are different.
Skin lightening and anti-pollution, considering the environment in India, would be the two biggest markets. Skin lightening is already big, and there is potential in the market for anti-pollution. That is our focus.
Anti-ageing is also important to people, and we are working on this to bring a new anti-ageing perspective, because our customers are looking for effective products. There are a lot of innovations in terms of particular targets, particular prospects and performance. So right now, we are working on key anti-ageing and anti-pollution products.
What you typically see in the Indian market is that the awareness about naturals is obviously high, so we need to talk about Ayurveda and naturals.
So we need to talk about customers and end-users. The philosophy of naturals is increasing at a very fast pace, and the growth numbers are very high. That is why the growth in the market is high.
What is critical, and what people need to understand, is just the term natural is not good enough. It is about sustainability, and it is also about functionality and performance. That is the key.
Just having a natural claim is not enough. It has to be backed by performance, because people want to see a difference. The usage of cosmetics in today’s world has changed. It is not just cold cream. They want a benefit out of it. One needs to talk about shampoo, lotions, cream foundations. There is always something that one is targeting – it is either removing blemishes or anti-ageing. It is not just the trend, but it has to also be about the functions, and also it is going to be natural.
This is where research would influence the active ingredients team. We are actually understanding the scientific pathways and the mechanism behind why it should work and we need to do the study, in fact the influence of this. We have a whole vertical laboratory through which we test the products through individual tests, and we also have many researchers who have experience.
We always discover new prospects and new mechanisms, and then once we perform on scientific data, we apply to our product and we always start elaborating scientific terms, first because the customers are looking for innovations. We then always test the product in clinical lab, because consumers want to see the real benefits appear. We ensure that they are using safe, naturally-derived products, because the performance is very important.
Which of the active ingredients manufactured by you are available in India?
Most of the products are already available. They are not manufactured in India. They come from South Korea. Availability is not an issue. What is very critical for Indian manufacturers is the availability of different pack sizes. It is a growing market in that aspect. We start with 1kg packaging, and we also have distributor channels, so stocks are not an issue. We are able to communicate with a growing segment in the India launch space.
So whatever is available all over the world is available in India?
Yes, and it is easily accessible in a very short period of time and also a small quantity. Actually, the main barrier is impact and quantity. So, we started with a 1kg pack, so the customer finds that convenient. What we do differently in India is that we are open to paying a price for the actives. As I said earlier, it is not just place, but also performance.
Once we demonstrate performance to them, there is no problem with price part, and what we also do locally is add a package for the entire damage, so we are not just actively selling actives, but we are basically giving solutions like what Stephanie mentioned in different formats. It can be a serum or it can be cream. So, we look at all these global trends, we take care of what we will be placing, and what we could do to attract the customer, and give these different options to the customers.
We have an application developing centre in India, where we make these formulations. We also have very good products which are also in other things. It is also a carrier in actives which gives good sensoric properties. Visual, sensorial and also performance – we are catering to all these three aspects. Where we stand out is we offer a wide range of products in the portfolio, so we talk about fact-based, right from the sugar-based to the basic facts, so if cost is a limitation, this is something we can work, because India is typically a very cost-sensitive market. We typically work with local companies, which also give the cost brief they are looking at, and what they expect, and based on those variables, we make products and offer solutions. So we should not make merchandise to them. They have different aspirations, which we are able to cater to at this point of time. Low cost, medium cost and high cost segments are often where the needs are very different, so basically we are clear about what we do here.
What are the key factors of the ingredients available in India?
Sustainability is very important. It goes with our philosophy. We have EcoTain, wherein we qualify all our products under this umbrella, which is our own umbrella. They are our own internal standards, which itself are high. So basically, there are 36 points that every product we manufacture has to go through, and if they pass these criteria, they become EcoTain-certified products. There are three important aspects – one is people, the other is planet and the third is performance. So these are the most critical factors that are in line with our values.
What are the India-specific challenges for these ingredients?
A number of launches happen because India is a very dynamic market. Every year, you have to bring to the audience a different format and process. Only when the process is successful, we are successful, but we are pretty confident. Once active ingredients are performing and end-users can naturally pursue those values, we are successful, and our partners will have more confidence in us. It is a time-consuming process, but basically all are on the basis of performance.
A lot of people say that the regulatory mechanism and permission take time. They are also facing the difficulties to work. But this is there in some cases.
There are no problems in natural ingredients, at least as of now. For the synthetic ones, there are a lot of regulatory bodies within India, and the same ingredients and preservatives can be used in many industries. Different bodies which are coming in picture make it more complex. But here, we don’t see problems at least as of now.
Tell us about plant-origin active ingredients? Are they part of green ingredients?
We are just trying to pick the best out of the world’s best. We do some basic research and seeing how the actives perform, create stories about the products. It is also about studying medicines like Ayurveda to understand why people look at specific terms, how it is used to apply on hair and skin and beauty benefits. This is the way we work and we know the products.
What we are trying to do is looking for biodiversity of what the world has to offer. We have naturals coming from Amazon, South Korea. In the future, India could be a market.
What are the products that are being developed currently by your company? Tell us about the research. What is your contribution to their development? I can see the way we work for the latest product launches tackling the anti-ageing market through to the discovery of news and innovative targets. We have to look at the pharma industry. We study a lot of pharma additives, and that is how we discover very new targets which have never been described in skin before and this is how we apply product concepts.
Firstly, we notify an innovative target, in this case, for the pharmaceutical industry, and then we define an experimental study and define this target in skin biology and how some active ingredients could act on this target. These resources are highly scientific.
So that is what is going on currently.
That is the active space but typically you know our philosophy. Any new innovation that happens on either the sustainability platform, natural resources, renewable resources and also functionality, just being natural doesn’t make sense.
How this functions, how it can actually replace the convention, how it can help the people to simplify the processes of manufacturing are also compassionate things. So, we must bring some innovations and help them ease up the manufacturing processes. We are doing lots of optimisations in terms of helping customers to optimise processes or simplify the processes and also give them functionality.
How important is India for your company as compared to other countries? What kind of growth is being seen in India in comparison?
India is a very important country. The biggest population - 1.2 billion - itself means the future is going to be in India. We see a lot of developing consumer care markets going by the trends. We have all the numbers – a compound annual growth rate (CAGR) of 25 per cent has been seen as one of the published figures.
So definitely it is a very important market, and what is interesting is the increasing middle class, the youth, the consumption going on in the men’s grooming segment is also getting very important. So that is why I said although we are trying to be very flexible, it is taking time. There is low cost, medium cost and high cost in the market in India too. So we are gearing up for that for sure.
Tell us about the share of active ingredients in your sales. What kind of growth are you looking at during the current financial year?
We started this 2-3 years ago. The baseline is the fastest-growing business would be in terms of percentage for sure.
Any new products in the development?
A numbers of products are in the pipeline, but we have protocol for the launch.
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