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Cosmetics: Latest Market Trends and Statistics

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Global Cosmetics & Toiletries Industry

Companies operating in the global cosmetics and toiletries industry must compete for shelf space in retail outlets, not only with rival personal care companies offering other well-known brands but also cheaper copycat brands offering similar unbranded products. The advantage of larger companies is that they can afford more extensive promotional campaigns to establish brand loyalty.

Emerging nations represent huge potential for international companies, offering better quality products than locally produced goods to populations with rising income levels. Multinational companies have begun establishing a strong foothold in countries such as Russia, India and China.

Rising income means that consumers are more concerned with product effectiveness and ingredients used than cheap products. Manufacturers are therefore focused on advertising their products as superior to those of rival companies, rather than systematically seeking to undercut market prices.

Distribution channels are changing in that cosmetic brands are available not only in retail outlets like department stores, but also through internet purchasing, television infomercials, home shopping, airport vending machines and in spas.

Market segments exhibiting strong potential include men’s care, products for specific ethnic groups and dermatological skin care. Companies invest in research and development and promotional campaigns to boost return from specific market niches with good growth potential.

Key Segments

The world make-up market was worth almost $35 billion in 2010, reports MarketLine, representing annual growth in excess of 4% between 2006 and 2010. Face make-up represented the largest market segment generating sales of over $12 billion, or around one third of the overall market. The market is expected to continue expanding at over 4% per year through 2015, bringing the market to over $42 billion.

MarketLine estimates the world hair care market generated sales of close to $49 billion in 2010, at a yearly growth rate exceeding 3.5% between 2006 and 2010. Shampoo represented to fastest-growing segment, worth $19 billion in 2010, or almost 40% of the overall market. Market expansion is predicted to slow to less than 3.5% to reach almost $58 billion by the close of 2015.

The world bath and shower product market reached almost $11 billion in 2010, reports MarketLine, exceeding yearly growth of 3.5% between 2006 and 2010. Shower products represent the fastest-growing market segment, with revenue exceeding $7.5 billion, or 70% of the overall market. The bath and shower product market is predicted to record slower growth but should reach almost $13 billion by 2015.

Regional Markets

The US cosmetics and toiletries market began to rebound in 2010 after a few years of slower growth due to the economic recession. The market expanded by almost 3% in 2010, says RNCOS, to exceed $36 billion.

According to Packaged Facts, the US natural and organic makeup, hair care, and skin care market grew more than 60% in the five-year period ending 2010 to exceed $7.5 billion. It is predicted the market could hit the $11 billion mark in 2016.

RNCOS predicts China’s cosmetics and toiletries (including the fragrance business) market will record 12% annual growth through 2014, led by skin care. International companies such as L’Oreal continue to lead the market. Companies are obliged to adhere to regulations and standards set by the State Food & Drugs Administration to protect consumers.

India’s cosmetics market generated revenue of almost $9.5 billion in 2010, according to RNCOS. Factors fuelling market growth include increasing purchasing power and consumer awareness. Online retailing and product specialization are growing the consumer base.

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