Let’s get personal Continued from p.12 14 Spray June 2015 During the forecast period through 2019, the ethnic beauty market will continue to face intense competition from general cosmetic and toiletry brands, and the fine line between mainstream and multicultural markets will continue to blur. However, competition will give an incentive for a surge of innovative, quality products entering the market. Global beauty The beauty industry is transforming in terms of product diversification and exploration of novel growth concepts, according to market research company Euromonitor International. Saturation in certain categories is prompting brands to look beyond traditional formats and products, turning to highpotential segments and niche areas. With emerging markets slowing down, attention is turning to core businesses and untapped markets such as Saudi Arabia, Turkey and Indonesia. In addition to political and economic instability, international beauty firms are faced with the consolidating power of local and regional players, as well as rapid expansion of smaller players with exclusive offerings. Reaching $465 billion in 2014, the global beauty industry remained resilient, according to Euromonitor. Both premium and mass beauty increased growth marginally by equal proportions, although premium is getting further traction in emerging markets. In a challenging economic context, global sales of beauty products grew by 5% in 2014. Skin care remains the largest segment and, by 2019, one third of global beauty sales should come from skin care, said Euromonitor. Despite recent deceleration in personal care sales, China and Brazil remain the most promising markets, with absolute growth expected to exceed $10 billion by 2019. However, strong growth is also expected in Indonesia, India, the U.S. and Saudi Arabia. Argentina, Iran, Mexico, Thailand and Turkey also show excellent prospects for further growth. Skin care remains the largest segment across most markets, with global sales expected to rise to over $130 billion by 2019. “Of all beauty segments, consumers continue to spend most on skin care items at $15 per person annually, compared to $10 for hair care and $7 for color cosmetics,” said Euromonitor International’s Head of Beauty & Personal Care, Irina Barbalova. “One third of global beauty revenues by 2019 will come from skin care, compared to 23% between 2009 and 2014.” Asian markets remain the primary growth driver for skin care products. According to Euromonitor, 80% of global skin care revenue gains by 2019 will come from Asia, with China set to account for 75% of the total regional absolute growth. “Indonesia and India will be the next growth frontiers to watch, with Indonesia expected to enter the top ten global skin care markets by 2019,” added Barbalova. For face and body… As the personal care market continues to expand, there is no shortage of new health and beauty launches to enhance any part of the body. For the face, new Eucerin Volume Filler Concentrate from Beiersdorf helps restore skin’s lost volume for a rejuvenated look without dermatological treatment. The product “re-volumizes” skin through a combination of three active ingredients: Magnolol activates the skin by increasing the amount and size of volume-giving cells; Oligo Peptides stimulate the collagen network responsible for a firmer skin structure; and Hyaluronic Acid intensively moisturizes the skin and reduces wrinkles. Beiersdorf selected Lumson’s Circus 30mL bottle in frosted glass with the AB266 pump, featuring a silver aluminum collar and white actuator, completed by a red Eucerin metalized overcap, also from Lumson. Neutrogena Oil-Free Acne Moisturizer Pink Grapefruit daily lotion moisturizes and clears breakouts with a light grapefruit scent, for clearer, softer skin. The 4oz lotion’s non- How Sampling Became Profitable While once simply a way to entice consumers, beauty product samples are now a beauty offering of their own, thanks to innovative start-ups, travel restrictions on beauty packaging sizes and consumer desire to continually try new products. The biggest driver to this change has been innovative start-ups in the form of subscription sites. Websites such as U.S.-based Birchbox, launched in 2010, and Glossybox, its key competitor in Europe, have turned product sampling into a profitable business. The rise of online shopping has capitalized on samples, turning them from freebies to commercially-viable products. In Euromonitor International’s Annual Survey on Personal Appearances, free samples was the fourth biggest influencer for purchasing beauty products across all four of the biggest beauty categories. Past experience, friends and family’s recommendations and price preceded sampling. In fragrances, free samples ranked the highest, with nearly 40%, the only exception being China where fragrances remain an up-and-coming category. The highest percentages from the 16 markets surveyed came from France, with 57%, followed by the U.S., Spain, Brazil and Germany. France ranked highly across all categories together with Germany, the U.S. and the UK, indicating the importance of sampling in those markets. Birchbox is perhaps the biggest success story of subscription beauty sites, with a valuation of $485 million in 2014. It even moved to brick-and-mortar, opening a shop in New York and a pop-up in Paris in late 2014. Its business model was simple: Consumers sign up, pay a monthly fee of $10 and get a box with selected samples from different beauty brands every month. As competition heated up with Glossybox in Europe, Julep in the U.S. and Love Me Beauty in the UK, subscription sites have had to do more to retain and gain subscribers. As a result, most subscription sites now also operate e-commerce, where consumers can buy the full-size products, as well as blogs with reviews, articles and how-to-do videos While initially beauty boxes were warmly received by Asia-Pacific consumers, oversaturation of the market, limited quantities of samples and difficult logistic conditions have resulted in many closures, mergers and/or transformations to pure e-commerce. Source: Euromonitor International
Spray June 2015
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