The cosmetic industry is one of the fastest growing industries in the world. Not just in India, worldwide also it is one of the sectors that has consistently shown an impressive growth graph. This has given rise to a range of associated and supporting industries, one of which is contract cosmetic manufacturers.

In 2016 the worldwide contract cosmetic manufacturing was estimated at USD 15.36 billion. One of the major drivers of this growth are now coming from the emerging markets like India. In fact, India along with China is also expected to have a major impact on the global demand. Europe, on the hand, leads in demand for personal care products.

But India is not just a vast and profitable market. It is also emerging as the hotspot for contract manufacturing.

Superior manufacturing facilities

The leading segment in contract cosmetic manufacturing is, of course, manufacturing. It accounts for 85% of the overall demand and growth. This is followed by customised formulations and then packaging. This requires modern manufacturing facilities that house the latest technology. Indian firm fit the bill here. Many of these firms have the right equipment to make what is required. Many already have most of the equipment in place. So, all they are looking for is a client. This makes them attractive as a manufacturing unit.

Stable economy

For overseas companies looking for an offshore partner, the stability of the contract comes above all else. Nothing can be more nightmarish than an offshore partner who operates in an unstable economy where things may go turtle at any moment, people and companies can shut down or disappear overnight or where no local laws exist for punishing absconders or defaulters.

Indian firms, on the other hand, have a history of stable business relationships. In fact, Indian firms are among the leading offshore suppliers for a whole range of products — from cosmetics to software. Local laws exist to ensure that even overseas businesses are not cheated out of their investments.

Experience

Contract cosmetic manufacturing is usually given to companies that can give the product with an assured turnover time — the shorter the better. This can only come with experience, We are looking not only for experience in manufacturing, but preferably in cosmetics manufacturing. With a vibrant local economy and heavy demand in the local markets, many of these manufacturing firms are already in the business. They have the experience of working with the right ingredients, the importance of sourcing, calibration, processing and the necessity of sticking to the rules and regulations of the market.

R&D

Although many firms are just looking for a manufacturing facility, the presence of R&D on premises is just the perfect cherry on the cake. Many Indian firm have the ability and the personnel to carry out the required research and development. This comes in handy when companies are looking for competent partners who can handle and even develop their own formulations. Indian firms have the skill and infrastructure to do that.

Skilled labour & technicians

India has a large pool of educated and qualified working population. Even for shop floor personnel, one can today find college graduates! This vast untapped source is one of its biggest strengths. Cosmetics companies need such skilled technicians. A good manufacturing unit is characterized by such task force.

Low costing

The biggest reason for getting contract cosmetic manufacturers on board is the cost advantage. The trend now is that big brands often do not have any factories at all! Instead, they outsource their manufacturing to specialist manufacturers. Not only does not it reduce their own workload, it also gives them a cost advantage and manufacturers who offer the most competent rates for a good service win. This has been one of Indian firm’s biggest strengths. With low labour rates and other overhead costs, Indian firms are able to run a tight ship and offer a decided cost advantage, while assuring a high quality product.

Other services

Although manufacturing is the biggest reason sector in contract manufacturers, other services such as customised formulations and packaging are also offered. India offers competent services in both. Skilled workers, lab technicians and the modern machinery make each of these services available.

Conclusion

Contract cosmetic manufacturers have emerged as one of the most significant players in the cosmetics industries. With customised services and competent R&D, Indians firms are not just a cost-effective alternative, they are one the leading players in the global market.

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