The companies, which include brands such as Tiffany and Chanel, are starting to see demand for the high-end jewelry products they have been creating with American design partners.
While American brands are doing well, many of the Chinese ones are not, according to Chinese companies who said that the demand is higher.
The American companies have begun offering products that are designed to be more affordable in India and China, said a Chinese cosmetics company, who asked not to be named.
American and Chinese brands are collaborating on products that will appeal to both consumers in the two countries.
American brands like Tiffany, Chanel and Gucci have been working closely with Chinese companies to develop new designs that will help to create a better picture of Indian beauty, said Shriram Srinivasan, a partner at the London-based consultancy firm, J. P. Morgan Asia.
“We are doing things differently.
We are building the brand in India in a different way and trying to create brands that are better, that have the right image and are able to appeal to the Indian market,” he said.
While the Indian companies are also looking to bring their products to the Chinese market, there is no doubt that the two sides will not be able to get along, said Arvind Jain, head of Indian luxury goods at consultancy Gurgaon-based Wipro.
“The Indian and American companies are working very closely together to make the Indian consumers more comfortable with their products and that is where there is a lot of friction,” he told Al Jazeera.
“I think the Chinese companies will be looking to invest in India because India is a market that is big enough to sustain their businesses,” he added.
Jain added that Indian and Western companies need to develop a strategy to make their products more appealing to both sides.
“I think it will be very difficult for the Indian company to compete with the Chinese company because they are different,” he argued.
But there are other factors that will keep both sides happy.
Chinese consumers are very protective of their products, he said, pointing to the fact that they prefer to buy a particular brand rather than buying a whole range of products.
There is also the fact the Chinese have a huge influence in India, which is why Chinese companies are very interested in investing in India.
“When it comes to cosmetics, it is China that dominates the cosmetics market,” said Srinivasa Ramaswamy, head at retail consultancy PwC India.
For Chinese consumers, it will not matter if they buy one or several products from a Chinese company.
“They are not looking to buy Indian cosmetics because they know that if they purchase Indian cosmetics, they will get a premium,” he explained.
“But if they do buy Indian products from the Chinese, it could mean a huge discount,” Ramaswal said.
Chinese consumers have a lot to be proud of, he added, as they have successfully created a niche that is growing at a rapid rate.
What’s next for Indian beauty companies?
The Indian companies will continue to develop their brand and offer it in Indian stores and online, and they will also continue to invest more in Indian cities, said the Chinese cosmetics firm.
“We believe the Indian consumer will be happy with their purchase, as long as they are satisfied with their experience with Chinese products,” he noted.
“Indian companies are going to continue to innovate and to invest to provide their customers with better quality products.”
But while American and Chinese companies have been doing well at the moment, it does not mean that India will have to rely on the American brands to stay in business, Srinavaswam said.
“India needs to focus on its own strengths and focus on the way it can differentiate itself from the global brands,” he warned.