Estee Lauder's investment in India's top spa brand to spur retail strategy

30 July 2008

Little Falls: Estee Lauder's acquisition of a minority share in Indian spa products marketer Forest Essentials has not only landed the cosmetics giant a stake in the country's biggest selling spa brand, it may also pave the way for Forest Essentials to expand globally, according to analysts at global consulting and research firm Kline & Company.

Kline's consultants predict the move could spur future expansion in Lauder's specialty retail strategy to capture a bigger piece of the $6.3 billion personal care market in India.

Kline's ''Professional Skin Care 2007: India Market Analysis and Opportunities'' report provides a comprehensive look at the Indian market, focusing on brands sold in beauty institutes, spas, dermatologists' offices, and plastic surgery clinics.

"Forest Essentials is the top spa brand in the country and is very strong in the ultra-luxury resort and hotel channel with its small amenities packaging," said Carrie Mellage, director of the Consumer Products practice for Kline's market research group.

"The brand targets wealthy international travellers, and this has already gained it some worldwide exposure because guests use the products at the resort and then purchase them for home use."

Even though Lauder acquired only a minority share, the move could be quite lucrative for both companies. While Estee Lauder gains a foothold with this well-positioned and growing brand, Forest Essentials can tap Lauder's vast marketing resources to explore opportunities outside its home country.