Breakthroughs that will re-shape the business of cosmetics in India

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Expert insight on the developments that will help the Indian cosmetic business shift effectively

The Business in beauty industry has experienced a fabulous growth over the years with only India growing with an exceptional percentage of about only 10% after the registration procedures for the import of cosmetics.
With the recent petition of PETA and the health ministry’s strict policy of the ban on cosmetics tested on animals has even made the process more tedious for importers who are now very selective when it comes to imports of beauty cosmetics in India.

The market on the other hand has become more competitive and ambiguous on what to offer the buyers which will help a change in their business, add extra profits and help them be the leaders.

Innovation and new products are the effective source for any business and when it comes to beauty business, the challenge has to be predetermined with research, knowledge and approach to build the system to enable a proper business flow.

Various questions contemplate the minds of various importers and distributors who are still not lucid of why and how the registration has to be done which Is the ultimate break down in imports, we have prepared a list of essential queries to help the industry know better.

Recently BNI had a discussion with one of the major agents -N K Consultants who have had a vast experience in the registration of cosmetics in India, and personally we have asked some queries which are frequent in the minds of various importers but unfortunately with no proper feedback which the importers expect from the industry and have been executed by Mr.Karan Bindra of N K Consultants.

How important has it become to register cosmetics for import now in India?

This new ‘registration’ requirement is primarily to regulate indiscriminate import of beauty and personal care products by traders with no accountability for contents and no mechanism to fix responsibility in case a consumer is not satisfied with the quality. In many cases, because of the lack of regulations on imported cosmetics, these were found to contain hazardous materials. Thus, new regulation is an attempt to check the sale of sub-standard cosmetic products and also to harmonize import requirements.

In the Gazette notification G.S.R. 733(E), Sept, 29,2012, Government has made it mandatory for all Imported Cosmetics products to be registered with the Drug Controller General India or to suspend imports after 31 March 2013.

The import of unregistered product is restricted and the importer will have to face heavy demurrages, loss of sales and in certain cases the importer may have to send his stocks back to the principal consignor.

Business of cosmetics in IndiaWhat are the challenges faced while registering directly at CDSCO?

Challenges faced-

Dossier to be STRICTLY as per the checklist-guidelines and notifications.

Importers/Brands need to have all the above information before they begin the process which rarely happens as registration in India is new to them.

Geographically based out of Delhi.

Knowing what document is accepted and what is not.

The Government has identified its checklist of documents and the application must be prepared strictly as per the said Checklist. The biggest challenge is to have the dossier ready as per the provisions laid down in the cosmetic regulation guidelines and further notifications issued. The entire idea is to check whether the ingredients used in the Cosmetics preparations are under the Bureau of Indian standards(BIS) and to conform that the said ingredients does not pose any harm to Indian population. BIS has listed maximum and minimum allowed percentages of all ingredients and all products to be registered must follow the said limitations. Any ingredients which is more than the prescribed limit will not be registered with the CDSCO office.

The product labels and artworks must be as per Rule 148 of Drugs and Cosmetics Act, which states the mandatory requirements of all inclusions as per the Regulation.

The most important aspect is that of presence of Heavy metals such as Mercury, Lead and Arsenic. The allowed percentages of Lead is less than 20 ppm , Arsenic is less than 2 ppm whereas Mercury is completely banned in cosmetics preparation in India.

Lastly, the issuance of documents such as Free sale certificate, Manufacturing licenses/GMP’s are also very crucial. The said documents must be issued from the National regulatory authority of the said country or Any chamber of commerce. Since the Free sale certificate states that the said products are freely sold in the country of origin, hence the issuance of Free sale certificate from  correct authority is a very critical and important issue.

Why there is a need of a consultant to help with registrations?

A Battle cannot be won alone, you need a team to win it. A consultant acts as a Guiding partner to Brands and Importers to keep them updated as to the new regulations, expectations and guidelines.

What a Consultant Brings:

  • Complete knowledge and experience of the subject.
  • Following the Do’s and Don’ts during the process of compilation.
  • Saves time
  • Reducing the idle days.
  • Allowing you to focus on your core activity.
  • Enables you to plan your business timelines.

Making the right choice for a consultant is very important. An application correctly prepared would ensure that we are almost there.

While making a choice, make sure that you do the following:

Find information about your consultant on the internet.

Speak with them personally.

Take a few references- some large and some mid-level names and make sure you speak with them.

Ascertain how the consultant is placed geographically. You do not want to hire a consultant and then keep visiting Delhi yourself.

How do you identify the right agent?

This is a very crucial issue. A right partner can build a brand or can destroy a brand. The Brands should carefully make a choice in identifying a brand partner. Since the registration is valid for a period of three years.

However the Registration is not Exclusive, the brand can have any number of importers in the country.

Things to look out for:

  • Identify a pool of prospective importers.
  • Do a compatibility test with respect to your products/target market and the products/market serviced by them.
  • Get a Due Diligence done.
  • Exchange and document each other’s expectation and reach an agreement.
  • Ask the importer about his existing registrations if any.
  • Look for answers on Credibility, market reputation and financial strength.

Meet the entire team and initiate discussions with multiple stakeholders.

We on our own provide services to brand in assisting them finding a right partner .Creating the right match is the single most important step in satisfying long-term distribution arrangements. Selecting brands, who have a vested interest in your success, creates a partner who cares about your business.

There is a big space between signing a distribution agreement and knocking on doors in your local market, and most distribution and marketing companies could not care less. We help you develop a business plan to make your new lines your best lines.

How much time does the actual process take and by when can the importer start importing products?

For better understanding and careful planning we usually divide this in two parts:

Part 1-Time spent in preparation of documents by the company.

Few documents are required to be attested from Country of origin and it really depends on country to country. Few countries could get the documents attested in almost 2 weeks time, whereas some make take up to 2 months. Hence we can assume that time taken for preparation of documents and getting documents attested in country of origin is roughly 2-3 months.

Part 2 – Time taken by the government.

Once the application is submitted in hard copy to the government, the turnaround time form the government is roughly 8-10 weeks(almost 2 months)

Hence the brand and the importer at maximum should assume a time of 5-6 months till registration. Once the registration is granted the importer is free to import the products registered in the Certificate.

What are the key factors an importer needs to keep in mind while applying for registration of any brand?

The importer must ensure that all the products that he intends to import are being applied in the same application. It must not happen that after the application is submitted there are another few set of products which needs to be included, as the same then must be applied separately in a endorsement application.

Specifically for nail care companies, which have a new set of launch every quarter, they must plan in advance a quarterly list of products which they wish to introduce in the market and must plan accordingly. Since preparation of application till approval can take up to 5 months, the companies must plan accordingly the set of products they wish to register in first go.

We thank Mr.Karan Bindra of N K Consultants for his support to share the essentials in the article.

Article Courtesy: Allen John, CEO, Beauty News India


 

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