L’Oreal’s Lessons From Indian Homes L’Oréal India’s Pierre-Yves Arzel says home visits helped him understand Indians’ relationship with water, what beauty products they use and why

L’Oreal’s Lessons From Indian Homes

by Pierre-Yves Arzel | Mar 1, 2013

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L’Oréal India’s Pierre-Yves Arzel says home visits helped him understand Indians’ relationship with water, what beauty products they use and why

I had never come here [India] before—not even on vacation. I definitely had a very wrong impression of India, the kind you get by reading books. When you don’t know a country, you are always influenced by the clichés that tell you only a part of the truth.

I’ve been very surprised. I knew there are plenty of languages and different states, but I wasn’t aware of the amazing diversity of the country, of the different types of people [here]. L’Oréal has studied all skin types in the world and we have found 66 skin types, of which 44 are in India. 

Name: Pierre-Yves Arzel
Age: 
54
Designation: Managing Director, L’Oréal India
Career: Joined L’Oréal in 1985; served as the MD in Finland, Korea, Canada, Japan, UK & Ireland
His India insights
There are 66 skin types; 44 are in India
Having 1.2 billion people doesn’t mean there are 1.2 billion consumers
Indian women experiment with colours of clothes; in the West, women play with shades of make-up

I’ve been working in three different continents: Europe, Asia (mostly in Korea and Japan), and North America. In Japan, it’s very homogenic; you probably have three to four skin tones and no more. Koreans have one or two skin tones. In the US, you have mixed skin tones. In London, you see a lot of diversity because 50 percent of the people there are not British with white skin.

EVERYONE’S NOT A CONSUMER
India is my first real emerging economy. It’s very new to me and it’s hard to manage a business in an emerging market as specific as India. It has a huge number of people spending just a little bit, and that too, not very often.

Contrast that with the Japanese market, where everyone is affluent and is conscious about beauty, but where price points are not the main point. What matters most is the quality, never the price.

A lot of people tell me that with 1.2 billion people it must be very easy to do business there [in India]. Or that India has a huge middle class, which is a fantasy for your business. But here, you learn very quickly that just because there are 1.2 billion people [doesn’t mean] there are 1.2 billion consumers. You learn that a lot of figures circulating about India are not true. Like: There are 500-600 million middle class consumers. Also, the market isn’t easy. It’s very tough, very competitive.

India is much more than a country; it’s a continent, a different planet. When you come with myths, you spend a few weeks deconstructing those first impressions.

THE INDIAN CONSUMER

Some say the Walmarts or Tescos of the world will kill the kiranas in India. That is the biggest myth. It will never happen. And the kiranas can be seen as a very archaic store or a very modern type of retail. Which other retailer delivers a bottle of shampoo at your home for free, that too within 10 minutes? Which other retailer gives you one-month credit at zero percent interest? Carrefour is not able to do this.

I try as much as possible to be out of office to understand what’s going on [around]. We do some home visits. We see how [people] perceive beauty products, what their beauty routine is, what products they use and why. In doing so, what’s interesting is, you go and see where these people live; they invite you to their places; you visit their bedrooms and bathrooms and see how they live.

The bathroom is always different. Depending on the social class, it can be very basic. In the West, a lot of money is invested in a bathroom and it is getting bigger and bigger, whereas in India, everyone shares [a bathroom] and the space is much more cramped.

The home visits give you an understanding of something which is absolutely crucial: Their [people’s] relationship with water. My driver gets just an hour of [running] water every day. This changes everything. He doesn’t live in a village though; he lives in Bandra [an upmarket suburb of Mumbai].

IDEAS OF BEAUTY
That is why we are developing fast-rinse shampoos or ones that foam very quickly, where you don’t need a lot of water. That’s the key.

The aspirational standards of beauty [here] are quite specific. Hair is the key, eyes are very important, and, of course, a fair skin tone.

There are also the physical aspects of a typical Indian beauty. Hair: Honestly, I’ve never seen such beautiful hair in my life. When I say beautiful, I mean, it’s long, very long, and quite healthy most of the time. Eyes: They have to be as big as possible. Body: Not so much [is considered in the aspirational standard]. It’s becoming a part of the beauty routine [now] but it wasn’t thus far.

Here, you experiment with colours of your clothes, while in the West, women play with shades of make-up. The way Indian women play with colours is quite extraordinary. Whatever their social class is, you never see a sari-clad woman who’s not looking good; and this attitude to colour is quite unique.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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