The trend of using organic products has caught on following the growing awareness about the side effects of harmful chemicals. The demand for organic personal care products, made of naturally sourced ingredients like herbal and floral extracts, without any chemical intervention, has thus increased among people, in recent years.

Market insights:

Exposure to high levels of air pollution, dust, excessive sunlight, and long hours in air-conditioned environments often causes skin and hair problems. Often, chemical-based personal care products, used to treat these problems, result in side effects like skin rashes, itchy scalp and other forms of irritation on skin, scalp and body. Therefore, the demand for organic personal care products has picked up. It is expected that the organic personal care products market in India will reach INR 146.14 Bn by 2024, expanding at a compound annual growth rate (CAGR) of ~17.81% during the 2019-2024 period.

Market segment insights:

Product type-wise segmentation:Based on product type, the organic personal care market in India is segmented into skin care, hair care, color cosmetic, and oral care products. Among these, the organic skin care products segment accounted for ~32% of the overall revenue of the organic personal care market in 2018, followed by the hair care (~30%), and color cosmetics (~23%) segments.

Product benefit-wise segmentation:

Based on the benefits obtained from the products, the organic personal care market is segmented into problem solution, enhancement and maintenance products. In 2018, the organic personal care products offering maintenance benefits held the largest market share (~38%), with most demands coming from the sates of Andhra Pradesh, Tamil Nadu and Punjab.

Key growth drivers of the market:

People have become aware of the harmful effects of chemicals like parabens, phthalates, propylene glycol and formaldehyde, which are used in personal care products. As a result, consumers are preferring products made of herbal and organic ingredients over conventional personal care products.

Key deterrents to the growth of the market:

Organic personal care products are devoid of preservatives like paraben and therefore have shorter shelf life than their conventional counterparts. Hence, Indian consumers prefer buying conventional personal care products of popular brands with greater shelf lives which would last long. This is a major challenge for the growth of the organic personal care products market in India.
Products of major players in the market like Lotus Herbals, Kama Ayurveda, Forest Essentials and Jovees Herbals are on the expensive side. Also, start-ups entering the market offer luxury organic personal care products at premium price ranges. Indian consumers are mostly price-sensitive, and those belonging to the middle and low income group can hardly afford expensive organic products. Instead, they make use of homemade besan, haldi or neem pastes in their beauty and personal care regime. This in turn limits the sale of organic personal care products, impeding market growth.

Companies covered:

Dabur India Limited
Emami Limited
Bio Veda Action Research Private Limited
Forest Essentials Private Limited
Jovees Herbal Care India Limited
Kama Ayurveda Private Limited
Lotus Herbals Private Limited
Patanjali Ayurved Limited
Shahnaz Ayurveda Private Limited
The Himalaya Drug Company
Honasa Consumer Private Limited
Juicy Chemistry Private Limited
Soulflower India Private Limited