We have introduced more natural products after Patanjali’s success, says L’Oréal MD

India’s young, beauty-conscious shoppers are keeping Jean-Christophe Letellier, managing director of L’Oréal in the country, busy.

Letellier, who’s been heading the company’s India business since 2013, thinks that with better access to the internet, affordability, and the desire for better grooming, young consumers in Asia’s third-largest economy are demanding more lip-colours, hair-colours, and anti-aging creams than before.

And L’Oréal is matching up to these trends.

Though a latecomer to India’s Rs 81,000 crore ($12.52 billion) beauty and personal-care market dominated by biggies such as Hindustan Unilever and Colgate-Palmolive, L’Oréal is the third-largest company by market share in India, according to data from Euromonitor.

Letellier spoke to Quartz about topics ranging from Indians’ love for natural products to the beauty junkies who lined up at 3 am for L’Oréal’s launch of cosmetics brand NYX in Mumbai.

Edited excerpts from the interview:

You’ve led L’Oréal in India since 2013. How has the market evolved?
There are three fundamental changes happening today. First is the young demographic of India.

The second is digitisation and the fact that social media is where consumers get access to sources of influence. So the capability of having access to trends is much greater now.

And the third is the rise of e-commerce. Because, in India, access to makeup (in a traditional retail setup) is not easy – it is very fragmented.

Also, more and more women are going to salons. Makeup is the fastest-growing category in the personal care market.

How are the more digitally-connected consumers changing the beauty industry?
The rise of this new generation that is really influenced by social media is happening all over the world. India is really into it, though not yet at the same scale. This era of “social” beauty has an impact on India because men and women want to look their best to be on social media. It pushes them to explore new things and be much more experimental than just four years ago. As a result, we don’t invest in digital by buying advertising; we invest in content to create more engagement with consumers who want to learn and explore.

How will L’Oréal benefit from these changes?
India as a market is yet to be developed. Today it is largely dominated by the personal care which is more about hygiene than care. It still has very basic needs and [does not involve] taking care of oneself in a more evolved and sophisticated way.

The overall cosmetic market is Euro 200 billion, while in India it is Euro 5 billion, which is only 2.5 % of the worldwide market. But it is growing two-to-three times faster than the worldwide average. India is poised to become one of the top five-to-six markets in the next 10 years. Nothing will derail India.

What categories will you focus on going forward?
Cosmetics and hair colour remain two strong categories. These are markets we are eager to develop, democratise, and upgrade. We are also developing our footprint in hair-care with a more premium angle, ie, the salon part of the business.

Besides, we have male grooming. What we see now is that young men understand the importance of appearance.

Is it easier to sell to Indians now since there is so much exposure to global beauty trends?
It is true that consumers have never been so demanding and aware as now because they have access to the world.

So last year we launched NYX and opened our first boutique in InOrbit Mall, Mumbai. People began queuing up at 3 am and we had some 700 people by morning. There was no mass media, it was purely driven by digital media and influencers. The response was striking – to see how we could generate such big sales from a brand that we thought is still less known here. This just shows that Indian consumers really know this brand from the US.

What are the categories seeing more research and development and India-specific innovations?
The three categories I mentioned above. The priority is hair-colour; we bring a lot of investment and innovation in that category. We’ve just launched a hair colour spray, an instant root touch-up spray. We’re also about to completely relaunch our Color Naturals (creme hair colour). In the next two months, we will do mass-market highlights to democratise beauty product usage at home. We’re also launching a clay-based shampoo for Indian hair that is very oily.

The second area of focus is makeup; one part is global products that we bring to India, the other is local innovation such as Colossal kajal.

L’Oréal remains an urban brand, while HUL and others are entrenched in rural markets.
Our focus is still urban because there is so much we can do; we are not completely maximised there.

The phenomenon in India – I call it the “rurbanisation of India” – is that it isn’t so much about big cities becoming bigger but villages becoming small census cities. And this is a very specific form of urbanisation happening in India. When these [villages] become small cities, consumers [here] start behaving like urban shoppers; that’s when salons start coming in, beauty shops open up, and we will be a part of it. We see that small cities, thanks to digital penetration, are informed and aware; they want to be a part of grooming and the social beauty sphere. So here we have prices in our portfolio that range from Rs3 to Rs10,000 for our luxury portfolio.

Retail has always been a challenge due to a lack of specialised beauty stores. How’s that changed?
Retail is still very fragmented in India. Within beauty, if you want to bring innovation, you have to rely on in-store demonstration and point-of-sale displays. It is very easy to implement it in modern trade but very hard in unmanned shops. But, I think it is changing. We are seeing a lot more specialty cosmetic stores and chains coming in.

So it is not so much about local grocers and modern trade getting big, but specialist stores like pharmacies and cosmetic stores which are improving the way they display products; and of course e-commerce.

So has e-commerce been beneficial?
Yes. We do 6% of our sales in India through online channels. In some categories, such as cosmetics, it is up to 15%.

A lot of beauty companies in India sell fairness products. Does skin colour drive the market here?
It’s a consumer demand, so you need that in your portfolio. But we have never been prisoners to that. We were the first ones to launch the anti-aging product under L’Oréal Paris. We sell more anti-aging than whitening products [under that brand]. And on the professional front, we develop a lot of products and services for acne and pigmentation treatments. It takes time to build and develop portfolios in a market like India, but we are committed to building something beyond fairness.

The last two years have really shifted the focus to natural products, thanks to Patanjali. L’Oréal, too, has pushed some natural products. How do you view that trend going forward?
Patanjali has found the right spot and developed the category. It has inspired a lot of “me-too” launches, but it shows that Indians are fundamentally attached to natural and herbal products. What does it mean to us? We are not trying to do ayurvedic products, but trying to bring science and nature together. Like, for instance, in Garnier. Or bringing “clay” into a hair product. It is true our natural launches have gone up.

Could you look at some acquisitions in the natural space?
L’Oréal is made of successful acquisitions [globally]. For India, we are always open and we look at what is the option. We are not dependent on it. We have 14 brands in India of the 33 brands we sell globally, so there are global brands that we haven’t got here because the market hasn’t reached that level.

This article first appeared on Quartz.