In the last few years interest in Indian cosmetics has risen as a result of aggressive marketing by Indian companies. Small and medium businesses, however, often form collaborations with other marketers to widen their market. As a result we have collaborators like investors and other cosmetics firms who are looking at Indian companies for partnership.
For a new investor though, this also represents a problem. How does one decide on a company? While finding likely candidates for cosmetics exporters India is not difficult, thanks to simple Internet search, how does one find the ideal candidate? There are a number of well-run eligible companies. So, take your time and decide on the essential characteristics you are looking for before you make a decision.
Philosophy: Every company has its own philosophy and in case of cosmetics, the company philosophy is extremely important because it can impact the quality of the product. For many investors they philosophy is also a deciding factor. Do they agree with animal testing? Do they use natural ingredients?
Range of products: Cosmetics companies come in many shapes and sizes. Some also include entire skincare and body care range, while some only specialize in cosmetics. It is important to know the range because each market has space for specific field and you need to fill this for best results. For instance, entering a market over saturated with skincare products will not give you any major revenues.
However, some investors may want a fuller inventory for any future expansion. In that case, find out about the company’s entire range and whether they can scale up in case of requirement.
Domestic sales: The best marker for a company’s product is its domestic sales. It can give you a good idea of how its products are actually received in the real world. This is its main market where the consumer is understood and is more likely to accept the product. The company performance can be gauged by evaluating how it has performed in a market where it had all the strengths.
You can evaluate markers like how they adapt to changing expectations, how their packaging and products are accepted by the market, their understanding of the consumer, marketing strategy, overall sales and so on.
Marketing team: As an investor or partner, your main interest will be the marketing arm of the company. So, insist on meeting the marketing team. Check out their experience and their sales strategy. They must be able to give you a cohesive and comprehensive strategy for penetration in the targeted market. You are looking for a well-prepared team that does its research on cosmetic exporters India.
Ask them about their campaigns and challenges. In particular, how they overcame these challenges? This will give a better idea about the team ability to adapt. If they have a market research team, how do they incorporate results? How important is consumer behavior research in their strategy development? What is their pricing and marketing agenda in the targeted market?
Investment in R&D: For a cosmetic company to stay competitive it needs serious R&D in today’s market. This is one of the most competitive markets in the global arena with multiple players at all levels. Consequently, the market expectations are also quite high. For instance, in the lipstick segment, new products are launched at every season.
Hence, every company has to invest in some R&D to ensure that new products are brought out at regular intervals. Certain products like perfumes and skincare requires focused and consistent research effort. Even if the company cannot afford expensive R&D today, it must be capable of scaling up as per requirement.
Financial stability: This is ultimately a business decision. What you are looking for is a partner. Since you are risking your own money, it is critical that you evaluate what the other side is bringing to the table. You must ask for the previous two years financial statements and have your own auditors go through it with a fine-tooth comb. Do not ignore any red flags, however small.
Certification: In any developed market this is the most important criteria. Check the client’s product for all relevant certification. Get samples off-the-shelf and get them tested in an independent lab. Keep in mind that certification criteria is not the same in every country. So, make sure that the products can pass muster in the targeted market.
With international attention turning on cosmetic exporters India, many investors are eyeing Indian companies. However, it is important to take this decision only after carefully ruling out all the above factors