The facelift: How homegrown D2C challengers are forcing L'Oréal to rewrite its India playbook

Summary

Stagnant growth in India has cornered L'Oréal into a bold reset. From unleashing prestige icons to acquiring nimble homegrown brands, the French beauty titan is rewriting its playbook to conquer the country's ingredient-obsessed, luxury-chasing consumers.

Mumbai: In the early 2000s, when L'Oréal began rolling out hair colour at mass price points of ₹100 per sachet, ads for its premium European brands were a regular fixture on television, particularly English language channels. Mass priced hair colour Garnier became famous with actress Simone Singh's ad, convincing her mother to give it a try. Later, superstar Aishwarya Rai delivered the memorable "five problems, one solution" for L'Oréal Paris' total repair shampoo.

These ads belong to an era where premiumization meant upgrading to the latest foreign brand.

But Jacques Lebel, who took over as L'Oréal's India managing director a year ago, is now navigating a new reality.

India's beauty and personal care market has exploded in the last decade, with estimates from consulting firm Redseer suggesting the industry grew to $23 billion in 2025 from $15 billion in 2015. Much of this growth has come from independent brands incubated by entrepreneurs, backed by venture capital, and scaled up online first.

Large incumbents are losing premium customers and the advantage of their size to insurgents who innovate more, create new consumer niches, and win over customers with newer, premium experiences.

Honasa Consumer, for example, went from ₹461 crore in annual revenue in FY21, when it listed, to nearly ₹2,400 crore in FY26. The company behind brands like Mamaearth, The Derma Co, and Aqualogica has seen its shares rise more than 30% since it listed in November 2023, even as more established fast-moving consumer goods FMCG irms stagnate, as does the benchmark Nifty FMCG index.

L'Oréal India has had a relatively staid performance and changing leadership at the top. Lebel is the third India managing director in eight years; he was preceded by Aseem Kausik (2023-2025) and Amit Jain (2018-2023).

The company's revenue from operations grew from ₹3,310 crore in FY19 to ₹5,980 crore as of FY25, a CAGR of just over 10%, latest available records from the Ministry of Corporate Affairs show. Profit after tax has performed better, with L'Oréal India's PAT at ₹598 crore in FY25, up 11% year-on-year and over 15% since FY19.

It also has a rather modest market share. In a talk with venture fund DSG Consumer Partners' founder Deepak Shadadpuri in April, the new managing director said L'Oréal's market share in India stood at 7%, about half of the average market share it has in most countries around the world.

In February, L'Oreal's chief executive Nicolas Hieronimus told analysts that he was unhappy with the performance of the India market, where the company's market share has remained stagnant. He also added that India accounted for about 1% of the company's total revenue.

Lebel, therefore, has his task cut out for him. The world's biggest beauty and personal care company is punching much below its weight in the world's most populous country. And he must set it right. What can he do?

10% plus

The L'Oréal board is no doubt upset with its India performance. Now, Lebel has a strong turnaround mandate.

A dealmaking executive with knowledge of the developments at the company told Mint that the rationale behind getting Lebel was an executive with experience of dealing with a mass market.

Lebel started his career with L'Oréal in 2006 in Paris, before moving to various roles in P&G and AB InBev. In 2022, he returned to L'Oreal, heading the company's Mexico operations in his last role.

In 2023, as general manager of the consumer products division in Mexico, Lebel built the company's omnichannel operations, changing the division's operating model and taking L'Oréal to market leadership in key categories. Besides, the FMCG industry in Mexico, like in India, has been seeing a surge in premiumization.

Now, his aim is to "turbocharge" the company's growth in the India market, the executive mentioned above added.

"This is a very dynamic beauty market and should grow north of 10% within the next five years, and we want to significantly beat that growth rate," Lebel told Mint in an interview, declining to share an exact growth target. "So far we are on track, and happy with the performance. But we think it's just the beginning and it can keep accelerating."

For now, some things have already been set in motion. Although its consumer products and professional division have been around for the last 30 years, L'Oréal only recently expanded its other two verticals - luxury and dermatological beauty. The company launched its dermatological beauty vertical in India in 2023 under previous India chairman and MD Aseem Kaushik, with the brand CeraVe. The year before, the company had relaunched its luxury beauty brand Lancôme.

"I cannot tell you that I have only one priority," Lebel said. "The beauty of L'Oréal is that it has four engines (dermatological, luxury, consumer, and professional beauty), and we are absolutely committed to winning in each of these four engines. We are seeing growth in each of these four verticals... potentially a bit more... at the high end of the market."

In February, the company signed up with beauty retailer Nykaa to expand operations for Kiehl's. Lebel says the company is also rolling out variants curated for Indian concerns including sun protection, acne, and pigmentation under dermat brand La Roche Posay, which was formally brought to India late last year. It is still early days.

"On skincare, we are just getting started with some of our derm products," Lebel said. "We realized when we launched (La Roche Posay), there was pent-up demand already. People knew about the brand ... even though it wasn't available in India."

Chemistry at work

Things appear to be looking up recently -- and a domestic acquisition is the centrepiece.

In an investor call on 30 July, global CEO Hieronimus called out Vietnam and India as the two top performing markets in the SAPMENA (South Asia Pacific, Middle East and North Africa) region, laying out what works for the company and what needs to improve.

"In India, typically, we're strong in haircare, strong in makeup with Maybelline, which is a very strong brand there," Hieronimus said. "We're beginning to see a surge in fragrance usage there. Skincare is a category where we have to accelerate."

That acceleration in skincare came in June this year, when L'Oréal acquired Innovist, the owner of skincare brands Chemist At Play, Bare Anatomy and Sunscoop.

Although the deal size isn't disclosed, sources indicate L'Oréal bought a majority stake in the company at roughly $350 million, a rich valuation multiple for a company that scaled to about ₹300 crore as of FY25, per the company's filings.

Innovist was founded in 2018 by Rohit Chawla, Sifat Khurana, and Vimal Bhola. All three previously worked at the independent personal care brand The Man Company that Chawla co-founded and later sold to Emami Ltd.

"Before scaling marketing and distribution, we invested in our own R&D, formulations, and eventually manufacturing," Innovist's Chawla said. "The belief was that enduring beauty brands needed real product capability underneath them, not just a marketing layer."

That is also why Lebel says the Innovist deal fits the bill on three major parameters L'Oréal considers before buying a company -- brand strength in a complementary category, capabilities that the company may not have on its own, and the quality of the founding team.

"I think we picked them, they picked us as well," he said about Innovist. "There was chemistry in this specific case. They made a lot of contrarian choices that did not make them popular when they first got started, but made them very attractive for L'Oréal. Having your own manufacturing and R&D is stuff that is important to us. We wouldn't do it any other way," he added.

Lebel says Innovist's brands have captured consumer niches that L'Oréal has its eye on.

"Here we saw brands standing out within the respective categories with a very clear positioning - clean but efficacious, tailored to the needs of Indian consumers," Lebel said of Innovist's brands.

Besides, Lebel added, these brands complement L'Oréal's premium portfolio by addressing more 'niche' haircare needs like dandruff and hair fall, where Innovist has built strong traction. Also of interest is Innovist's ability to bring innovative new products to the market rapidly and run their own direct-to-consumer website -- something L'Oréal is "not an expert at," Lebel said.

He added that while online is growing, general trade and salons continue to be significant channels for the company's sales in India. In fact, since taking over, the India chief has visited 15 cities across the country, meeting trade partners and salon chain owners.

Nonetheless, L'Oréal may be paying top dollar for Innovist, considering the company is small relative to other global brands the company has acquired in the last few years.

Consider Aesop, the Australian luxury personal care brand that it bought for $2.5 billion in 2023 when the company posted sales of $537 million the previous year. L'Oréal also spent $4.6 billion to buy out luxury conglomerate Kering's beauty business, holding luxury fragrance brands like Creed, YSL, and Gucci.

Innovist's annual revenue has risen from just over ₹100 crore in FY24 to about ₹247 crore the next year, Chawla said. The company crossed ₹680 crore in the past fiscal year, he claims.

A new playbook

Innovist in the bag, L'Oréal is keeping an eye out for more, although the company is sticking to its conservative approach.

"They have seen a few more assets but are being more cautious because they need to digest Innovist first," a banker who has worked with L'Oréal in the past told Mint, requesting anonymity. "They have executed fewer M&As so far also because the global team is more conservative and consumer multiples in India have always been rich, about 60-70% higher than global benchmarks."

Besides, L'Oréal is a limited partner in two prominent consumer-focused funds -- Deepak Shadadpuri's DSG Consumer Partners and Fireside Ventures, led by a clutch of former Unilever executives. These funds have backed a vast array of independent, premium, and digital-first personal care brands including Secret Alchemist (fragrances), Arata, Moxie (hair care), Chosen and Pilgrim (skincare) among others.

L'Oréal also operates BOLD, a venture fund for beauty and personal care brands. In March this year, BOLD participated in a $5 million Series A funding round in Chosen alongside Fireside Ventures. Last month, the fund announced it was partnering with the beauty retailer Nykaa to invest in promising beauty and personal care brands.

"We need partners here, and we're very happy with the two funds here -- Fireside and DSG -- and we may have more partners in the future," Lebel told Mint. "We are looking at how to get the best deal flow, the best access to the market here."

Investing in or buying up independent brands has become the default playbook for most FMCG incumbents in India to keep pace with the growing beauty and personal care market, as they struggle to incubate niche brands on their own, particularly digital-first brands.

Take Hindustan Unilever, for example. Before it acquired Minimalist and OZiva, the company launched a bevy of digital-first personal care brands in the country including Love, Beauty, and Planet and Acne Squad. Now, it has changed tack, rolling up brands like OZiva under a newly instituted 'Beauty and Wellbeing' vertical.

Rival Marico has been following a similar playbook, expanding the acquired brand Plix from being a seller of supplements to offering specialised skincare products including serums.

"I don't think companies like L'Oréal have the DNA to innovate and capture niches like India's D2C brands have done," a consumer brands investor told Mint, requesting anonymity. "Their product innovation cycles take too long and they need to be aligned with global mandates. In the beauty and personal care space, the incumbents will keep using acquisitions to stay ahead."

Globally, L'Oréal has its eyes firmly on the premium end of the market, with aggressive plans for top-end brands like Aesop, Creed, and now the licensing deal with Kering for luxury personal care and fragrances. India's personal care market has traditionally lagged the US, Europe, and China in the consumption and proliferation of brands, although that is now changing.

The company's India playbook, though, indicates that the next leg of growth in beauty and personal care here could look very different from its biggest markets.

"I also don't think Indian consumers are as enamoured by foreign brands as they were in the past," the consumer brands investor quoted above said. "China's premium beauty and personal care market is dominated by very high quality homegrown brands. I think India is headed in the same direction."

Perhaps the next ad from L'Oréal will have a new generation of celebrities recommending the latest homegrown brand that caught the French conglomerate's eye instead.

Key Takeaways

* 7%: L'Oréal's market share in India, half the average share it has in most countries, according to Jacques Lebel.

* $350 million: The estimated valuation multiple L'Oréal paid to acquire a majority stake in homegrown D2C company Innovist (Chemist At Play, Bare Anatomy, Sunscoop).