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Why did Reliance Retail buy SEPHORA India 💄 rights just after launching their own beauty platform Tira?

Reliance Retail has recently launched Tira, an omni-channel beauty platform that serves consumers from various demographics. Tira's assortment range spans from budget-friendly brands like Himalaya to high-end luxury brands such as Versace.

Following the launch of Tira, Reliance also acquired the exclusive rights for LVMH owned Sephora in India, previously held by Arvind.

A very similar pattern was evident in Reliance’s lingerie acquisitions & investments. Reliance had acquired/invested in amanté IndiaClovia, and Zivame some of the key lingerie players in the country. Additionally, they also have a partnership with the premium lingerie brand Hunkemöller in India. At surface level, it seems like the effort was made to gain a larger chunk of a growing market segment and also to cater to diverse customers (mass to premium).

It's intriguing to note that LVMH, the parent company of Sephora (through L Catterton), is also an investor in Jio Platforms. This suggests that the collaboration must have a lot of upside for both.

1) As per a joint report by Redseer Strategy Consultant and Peak XV the Indian beauty and personal care market is expected to grow to $30 billion by 2027, accounting for 5% of the global market. It appears that Reliance is actively pursuing a significant share in this expanding sector.

2) Reliance boasts an extensive luxury fashion portfolio, and the addition of Sephora further expands their presence in the luxury beauty sector. In contrast, Tira caters to consumers across various price ranges. Sephora can be positioned as a direct competitor to Nykaa Lux in the Indian market.

3)Through its association with Sephora, Reliance gains entry into a high-spending luxury consumer segment. Over the past year, searches for the Sephora affiliate program in India have surged by 700%, indicating the expanding reach of Sephora and their engagement with new luxury customers.

4) Sephora currently operates 26 stores in India, spanning across 13 cities. Through its partnership with Sephora, Reliance has the opportunity to enhance its physical presence in the beauty industry.

5) In terms of product variety, Tira already offers a more extensive range spanning from mass-market to luxury products. However, through their collaboration with Sephora, they gain access to exclusive Sephora brands, such as Rare Beauty, owned by Selena Gomez.

Outside India, Sephora has played a pivotal role in nurturing the growth of homegrown beauty brands, but in India, this has been less prominent. Can Reliance alter this dynamics?

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