India beauty market seen nearing $42B by FY31 as online share rises
Aditya Birla Money forecasts India’s beauty and personal-care market will grow from $23 billion in FY26 to $42 billion in FY31, supported by younger shoppers, organised retail and digital penetration. It initiated Buy coverage on Nykaa and Honasa, while flagging a difficult path to profitable scale.
What happened
Aditya Birla Money forecasts India’s beauty and personal-care market nearly doubling to $42 billion by FY31. It initiated Buy coverage on Nykaa and Honasa,
Key facts
- India BPC market projected at $42 billion in FY31, versus $23 billion in FY26
- BPC market CAGR expected above 12% through FY31
- BPC shoppers projected to rise to 200 million in FY30 from 140 million in FY26
- Gen Z and Gen Alpha expected to account for about 50% of BPC spending by FY31, versus 32% in FY24
- Online BPC share projected at 34% in FY31, versus 25% in FY26
- New-age BPC brands above ₹1 billion revenue projected to exceed 150 by FY31, from 70-80 in FY26
- Only 10-15 brands expected to exceed ₹10 billion revenue by FY31
- Nykaa target price ₹390
- Honasa target price ₹635
Why this matters
Rising digital penetration and organised retail create acquisition and partnership opportunities in India’s fragmented beauty ecosystem, particularly for brands with differentiated online-to-offline capabilities.
What to watch
- Quarterly online BPC penetration and quick-commerce beauty GMV growth.
- Nykaa and Honasa gross-margin, EBITDA-margin, advertising-spend and repeat-customer trends.
- Discount intensity, marketplace take rates and customer-acquisition-cost trends during major sale periods.
- Growth of organised beauty retail stores and same-store sales in Tier 2/3 cities.
- Premiumization indicators: average selling prices, dermocosmetic demand and share of owned/exclusive brands.
- Regulatory or compliance actions affecting cosmetics imports, product claims, labeling or influencer advertising.
- Prioritize exclusive launches, owned/private-label brands and loyalty programs to reduce reliance on paid acquisition.
- Build channel-specific assortments and pricing guardrails across marketplace, own app, stores and quick-commerce partners.
- Use physical stores as trial, consultation and returns hubs while consolidating inventory and fulfilment data.
- Increase retail-media, brand-services and data-monetization offerings to offset margin pressure from delivery and promotions.
- Focus investment on repeat-purchase categories such as skin care, hair care, dermocosmetics and premium replenishment rather than low-loyalty color cosmetics.