Jatania, who is in India this week, added that The Body Shop was grossing $1 billion in annual sales and turning its focus on India as it sees the country as a top five global market for the beauty business.
“India is very much at the top of our global growth strategy. We hope that in the coming years, India will move into the top three markets for us,” he told Mint, adding that the company was launching a new product line in the country before exporting to the rest of the world.
“We’re also excited about quick commerce here as that’s delivered very good results for us,” Jatania added.
The PE firm also owns Herbivore Botanicals, a plant-based cosmetics company, Scandinavian Biolabs, a natural haircare product company, and Decypher, a company that produces and sells foundation makeup.
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Jatania’s vision for the future of The Body Shop is focused on maintaining the brand’s iconic presence while adapting to the rapidly changing retail environment. “We’re living in a very dynamic environment where you have to invest in social engagement, digital channels, and store formats. It requires significant capital, but we are committed to making the beauty business relevant for the next 50 years as it has been in the past,” he said.
The Body Shop acquisition was the company’s largest investment—for an undisclosed sum—to date in the sector, and Jatania described the opportunity as a rare one. “It’s not every day you get to buy an iconic brand with such a large pie of global sales that’s sold in 70 countries. It was a once-in-a-lifetime opportunity,” he said.
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The acquisition was complex, as The Body Shop had entered administration or insolvency as per UK rules, but the PE firm’s previous experience in revitalizing beauty brands like Yardley of London led to his interest in this business. “We took 11 weeks to complete the deal, closing it by late August or early September 2024.”
Lornamead, a company that made and sold hair care, skin, oral care, and bath products, which was earlier owned by investment firm Auréa Group, was sold to various strategic investors in 2013 in the US, India and China, including India’s Wipro. Some of the other brands owned by Lornamead were also Lypsyl, Woods of Windsor, and Harmony.
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The PE firm’s investment strategy is highly focused, though, and Jatania said that the firm plans to remain specialised within the beauty and wellness sector rather than diversifying into other industries like food and beverage.
“Our ambition is, over the next five years, to become the largest private equity house in this space. We want to be a force in the private equity sector but are highly focused. Beauty and wellness require very different operational capabilities than, say, restaurants or food. We believe this focus will add value,” he explained.
‘Cautious of influencer-driven brands’
He said he would only be keen on investing in local brands—in India and elsewhere, too—that are highly differentiated and have a strong, long-term brand positioning. But, he is cautious not to focus on influencer-driven or celebrity-endorsed brands, which tend to be short-lived.
“In beauty, the key to success is building lasting relationships with consumers by engaging with them through different stages of their lives. The lifetime value of a consumer, achieved through ongoing relevance, is far more profitable than temporary interactions,” he added.
India’s growing beauty market is a central component of this strategy. The Body Shop currently operates around 200 stores across the country, but its local franchise partner—Quest Retail—plans to double the store footprint within the next three to five years, with a focus on both major cities and smaller towns.
“We’ve been engaged in second- and third-tier cities since 2007, and the consumer demand is growing rapidly in these areas,” Jatania said. “The goal is to open many more over the next few years, not just in big cities but also in smaller towns as we get about 50% of our business from smaller towns, including the e-commerce sales.”
India is expected to play a central role in The Body Shop’s global expansion strategy, alongside other major markets like the US, UK and Australia. It will take a re-look at its China strategy as well. “India is very much a focus market for us. It’s part of our global growth strategy, and we see it continuing to grow to a top three market in the next few years as it will grow at an accelerated pace,” he added.
Fragrance and skin care will remain a focus area, and these segments continue to grow. Along with physical stores, the beauty company has been focusing on increasing its digital presence, especially through quick commerce channels in India.
“We’ve seen fantastic growth in quick commerce in India. It drives convenience and impulse purchases, and we’re at the forefront of this trend,” Jatania said. “Quick commerce has delivered very good results for us. We’re currently at about 30% online in India, and we aim to push that number closer to 50%.”
According to McKinsey, the Asia–Pacific region (excluding China and Australia) maintained its position as the largest market for beauty retail sales in 2023, with a growth rate of 10% compared to the previous year. India stood out within the region, also recording a 10% growth, driven by 4% volume growth and 6% price growth.
McKinsey’s regional survey data revealed that India had the highest proportion of consumers willing to spend more on beauty products in 2023 and 2024, spanning all income levels. Notably, low-income consumers in India were unique in their intention to increase spending on beauty products, marking a significant trend through the second quarter of 2024.