Can Tata take on Nykaa with its "Beauty tech" stores?


by 5paisa Research Team Last Updated: Dec 13, 2022 - 06:52 am 1.9M Views
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Just a few days ago, Tata group, which has business interests ranging from EVs to Jewelry, announced that they would venture into the beauty segment. 

They announced that they will open 20 “beauty tech” stores across the country. In my opinion, this is going to be a game changer in the beauty and personal care industry.


Just imagine, you have to buy skincare and makeup products, and you walk into a beauty store, the store has the best beauty products from the best brands across the world. You enter the store, you tell the staff about your requirements then a machine runs a diagnostic test on your skin and suggests you the appropriate products with the right formulation that will suit your skin type. 

Then you move on to the makeup section, there are "virtual try-on" kiosks for eye and face makeup. There is a stand with makeup products slotted on it; as soon as you lift a product, a digital mirror screen in front of you will show how the color shade will appear on the face.

Sounds amazing, no?

As of now, most women rely on influencers or their friend’s advice to understand the products that will suit their skin the best.

The beauty and personal care industry has changed entirely in the last few years. We have come from a period when ponds was synonymous with cold cream to shoppers seeking specific formulations like Retinol, and Vitamin C for their skin.

The consumer is no longer looking for one-size-fits-all solutions. Currently, they prefer customized products based on the type of their skin but many retailers do not have appropriate knowledge of the products and are therefore unable to provide a personalized experience to a user. 

Tata is planning to address this pain point of consumers with its “beauty tech” stores. “Beauty tech” is nothing but an amalgamation of Artificial intelligence and Beauty.

In these stores, AI- and AR-based tools and software run skin diagnostics, and predict beauty-related consumer needs. For make-up products, they simulate appearances, which helps consumers in making informed and smart purchases.

By amalgamating beauty and AI, Tata wants to have a pie of India’s growing beauty market. Indian beauty and personal care market is the 8th largest in the world with a total value of $15 billion and is expected to double by 2030. 

The industry promises huge growth as even though we have the same demographics as China, our BPC market is just ⅕ the size of the Chinese BPC market.

According to a report by Reuters, Tata with its beauty tech stores will cater to premium consumers, aged between 18 to 45, who buy high-end beauty products. Reportedly Tata is in talks with two dozen brands to supply exclusive products to their stores in India.

Amidst the pandemic, when we all were locked indoors, Nykaa had a dream run, but post-pandemic, people are back to stores and all companies in the segment have realized that in the BPC segment, an omnichannel supply chain is the best. Nykaa has opened 124 stores and has plans to open 300 stores in India.

Even, Reliance is planning to venture into the BPC with offline stores that are most likely to be monikered ‘Tira Beauty.

What would differentiate Tata from others would be its “Tech” and its exclusive products. Reportedly, Tata’s beauty stores will have “skin analyzer”, a device with a mirror that can read and analyze a customer's skin to reveal 25 to 30 attributes that can help make product choices. There will also be "virtual try-on" kiosks for eye and face makeup.

It is also testing the use of geofencing technology. This technology will allow its store staff to detect a customer’s shopping history and wish lists with that will help them in making better recommendations.

With this new technology, do you think Tata will lead the beauty and personal care industry, as it did with electric cars?


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