Beauty and personal care products sales and key trends in two of the most important markets in the world. In a global cosmetic market that had an average growth rate of 6% in 2012, the mass products accounted for the most important amount of sales volumes, according to the Market research provider Euromonitor International. Among product categories skin care comes in first place, but a strong boost was observed for oral care, deodorants and hair care. The premium segment, leaded by skin care, is growing in the technologic anti-ageing area. North America stands out as one of the most dynamic markets in this area, with a 6% growth, but also Latin America, Asian and Middle East markets show an increasing liking for premium products. Fragrances and make-up also receive a widespread attention. Multifunctional products are a key trend, therefore the manufacturers bring the BB-cream idea into make-up, accomplishing a multiple functions make-up and the so called Coloured Correction creams. The other strengthening trend concerns the customized product, with significant opportunities in skin care and fragrances.
Brazil: hair care upholds strong sales
The cosmetic market in Brazil shows one of the strongest value of growth in the world. Marcela Viana, Research Analyst at Euromonitor International, describes some features of this market. «Premium segment continue to grow fast in Brazil. However, this segment is still concentrated in a niche of consumers, which have a higher disposable income. Hence, it is expected that the mass segment will grow strong and drive sales of BPC market in Brazil, regarding the fact that consumers of the Brazilian new middle class continue to increase their consumption of BPC products, especially in hair care products, since their disposable income continue to rise». Hair care products are leading the growth of the BPC market. This category posts good performance with current value growth of 19% to reach more than R$ 18.0 billion in 2012. New products and marketing campaigns support strong growth. Shampoos see strongest current value growth of 30% in 2012. Two key trends are important for this category. «The concept of «salonizacao» is one of the main trends in Brazil – Marcela Viana reports. -This means that products that deliver professional (hair/beauty parlour) results at home are catching the attention of consumers, which are willing to pay more to acquire professional products to use at home. Another trend is the increasing popularity of «oil» products such as argan oil, which delivers a smoother hair in a single use. This type of product is becoming very popular due to the fact that many Brazilians have curly or afro hair, and seek for a more smooth and hydrated hair». Hair care products are estimated to see constant value CAGR of 7% over five year forecast period. Other products are showing an important growth too. «Men’s grooming continue to post an excellent growth, of 63% in constant value. Men are also becoming more concerned about personal care and they are investing more in grooming products, in order to achieve better results and a smoother skin».
The premiumization trend dominates in China
The Chinese BPC market increases of about 5-10% in 2012. The premiumisation trend in beauty and personal care is emerging and developing. This evolution is depicted by Vera Huang, Research Analyst at Euromonitor International. «More consumers are trading up to high-end products, whilst manufacturers continue to launch premium brands and products to meet such market demand. Skin care seemed to benefit the most from the premiumisation trend». This trend is expected to penetrate more categories in beauty and personal care «accounting for a higher share of overall value sales, and witnessing more new high-end launches -Vera Huang observes. -With the rising awareness of better living, more Chinese consumers are likely to trade up to high-end beauty and personal care products, whereas rising disposable incomes due to steady economic growth in China will make premium products increasingly affordable by more consumers. Premium cosmetics is expected to see a strong constant value CAGR of 13% over the forecast period, outperforming the 7% CAGR for mass cosmetics in the same period». Skin care is the lead category in the Chinese BPC market. According to Euromonitor International, skin care in China experienced robust current value growth of 10% in 2012, underpinned by buoyant demand. Vera Huang illustrates some trends. «Premium lip care posted the strongest growth in 2012, increasing by 20% in current value terms. In the same year, premium anti-agers continued to register dynamic current value growth of 17%, the second highest growth, mainly driven by the increasing popularity of products featuring gene-repair functions and rejuvenation effects. Value sales of premium brands in skin care in China continued to increase during 2012, up from 26% of the total in 2011 to 27% in 2012. Skin whitening was an increasingly popular topic in skin care over the review period, with a climbing percentage of value share in each category within skin care, thanks to the local preference for a fair complexion. Skin whitening products represented a 37% share of face masks in value terms, the highest amongst all categories in 2012».
Beauty and personal care market in Italy
Cosmetic consumption in the Italian market is slowing down. The decrease is about -1,9% in 2013 if compared to the same operating period of 2012, according to the survey of Cosmetica Italia, the Italian personal care Association, which represents about 500 Italian BPC companies. The value of the domestic market is expected to be around 9400 millions Euros at the end of the year. On average the decline concerns all distribution channels in 2013. The channel of large retailers (hypermarkets, supermarkets, discounters, ecc. including home&BPC retailers), first channel of trade in Italy, is worth 3800 millions Euros and marks a negative sign (-1%). Perfumery looses 5% if compared to 2012. Pharmacy retailing is decreasing as well, for the second consecutive year, with an expected drop of sales of -1,1% for 2013; general value of sales amounts to 1700 millions Euros. Sales of herbalist’s shops are the only exception, with an expected growth of 3,5% in the whole 2013. The decrease of professional channels sales continues: 2013 balance forecast shows -6,9% for the hair salons and -6,2% for the beauty salons, respectively worth 600 million Euros and 240 million Euros. Direct sales (door to door, mail order, online) show a countertrend; +4% is expected within the end of the year 2013. Direct sales are by now 5% of the cosmetic market, a value of 530 million Euros.
Internet retailing in China and Brazil
Beauty and personal care internet retailing was worth in China more than 3500 millions US$ in 2012. It is expected to grow up to about 9600 millions US$ within 2017 (+21,9% CAGR). Vera Huang, Research Analyst at Euromonitor International, says «Many players have prioritised internet retailing as an alternative distribution channel outside the traditional retail channels for beauty and personal care products, leading to rocketing growth in value sales via internet retailing in 2012. The large population, with a steadily growing number of internet surfers in China, has formed a solid consumer base for online sales of beauty and personal care products, with the leading players setting up their own official online shopping platforms over the review period, in addition to opening flagship stores in leading B2C platforms». The value of internet retailing sales in the Brazilian market was around 460 millions US$ in 2012. Internet retailing will grow of 11,7% (CAGR) in the next five years according to Euromonitor International forecast. Marcela Viana, Research Analyst at Euromonitor International, comments «it is expected that internet retailing will continue to grow nicely. Some important BPC specialized retailers already have internet retailing in order to reach more consumers, especially those consumers that live in cities far from the large urban centres such as Sao Paulo and Rio de Janeiro. However, it is not expected that internet retailing will surpass direct selling in total sales in the near future».
China and Brazil Market Sizes (US$ mn, Retail Value RSP, Constant 2012 Prices, Fixed 2012 Exchange Rates - Euromonitor International) Geographies Categories 2007 2012 2007-12 % 2007-12 CAGR %
China Beauty and Personal Care 22.545,2 32.019,8 42,0 7,3
China Premium Cosmetics 2.954,3 5.534,9 87,4 13,4
China Mass Cosmetics 16.485,0 22.518,5 36,6 6,4
Main categories Baby and Child-specific Products 770,4 1.355,5 75,9 12,0
Bath and Shower 2.419,4 2.747,0 13,5 2,6
Colour Cosmetics 2.059,2 2.787,4 35,4 6,2
Fragrances 524,3 730,4 39,3 6,9
Hair Care 4.178,1 5.324,5 27,4 5,0
Men's Grooming 424,2 1.019,3 140,3 19,2
Skin Care 8.024,7 12.751,4 58,9 9,7
Brazil Beauty and Personal Care 29.154,4 41.807,0 43,4 7,5
Brazil Premium Cosmetics 647,2 1.363,8 110,7 16,1
Brazil Mass Cosmetics 24.184,8 34.184,2 41,3 7,2
Main categories Bath and Shower 2.197,6 3.316,4 50,9 8,6
Colour Cosmetics 2.078,5 3.487,6 67,8 10,9
Fragrances 4.642,9 6.477,1 39,5 6,9
Hair Care 7.703,8 9.271,1 20,3 3,8
Men's Grooming 2.438,8 4.324,9 77,3 12,1
Skin Care 3.257,1 4.586,0 40,8 7,1