Warc, 27 August 2013
NEW DELHI: Indian consumers are increasingly choosing to make purchases of beauty and grooming products in pharmacies rather than local stores, preferring the more hygienic environment and the expert advice available.
The development is proving particularly important for premium brands such as L'Oréal, which now sees 20% of its sales in the top eight cities coming via this route.
Satyaki Ghosh, the director of consumer products at L'Oréal India, described pharmacies as a "high growth" channel for its premium brands, including L'Oréal and Garnier.
"Consumers rely on some sense of information about a product while making purchase decisions for skin care products," he told Livemint. "They tend to believe the pharmacy more than a regular channel."
Nor is the trend restricted to traditional women's products, as Ghosh reported that male grooming lines, such as fairness creams and deodorants, "flying off the shelves" at pharmacy stores.
Kannan Sitaram, chief executive, consumer goods, at India Equity Partners, pointed to the attractions of a "neat and clean environment" for both consumers and premium brands.
"Some personal care brands also keep their sales people at a chemist or set up shop-in-shops," he added.
Some chains push non-medicinal products in the average five minutes waiting time consumers experience while waiting to buy medicines. Apollo Pharmacy, estimates this tactic has increased its revenue from non-medicine products in the past five years from 20% to some 35%.
Brand owners such as Dabur India, a maker of shampoos and toothpastes, are also creating sales teams dedicated to serving pharmacy chains. "Being available at chemists does add a lot of credibility to a product, and at Dabur we place a lot of importance on chemists," noted George Angelo, Dabur's executive director of sales.
This hybrid model is so far limited to pharmacy chains in the larger cities, with small-town chemists still focused on selling prescription drugs.
Data sourced from Livemint; additional content by Warc staff