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Email: [email protected] MarketResearch.com COSMETIC PRODUCTS MARKET BY TYPE (Skin, Hair, Sun, Oral, Fragrance, Color, Soap, Bath, Shower, Personal Hygiene), DISTRIBUTION CHANNEL (Supermarket, Pharmacy, Departmental, Specialty, Direct, Internet, Salon) & GEOGRAPHY — Global Trends & Forecasts To 2019
MarketsandMarkets [email protected] www.marketsandmarkets.com
Cosmetic Products Market by Type, Distribution Channel & Geography
— Global Trends & Forecasts To 2019
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MarketsandMarkets 2 Cosmetic Products Market by Type, Distribution Channel & Geography
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1 INTRODUCTION
1.1 KEY TAKE-AWAYS
• Definition, segmentation, and measurement of the cosmetic products market
• Analysis of the market structure by identifying various sub-segments
• Forecasts of the cosmetic products market value that includes various sub-segments such as type, distribution, and geographies such as North America, Europe, Asia- Pacific, and Rest of the World (ROW)
• Identification of major trends and factors that drive or inhibit the growth of the cosmetic products market
• Analysis of opportunities in the market for stakeholders through the identification of high-growth segments
• Strategic analysis of each sub-market with respect to individual growth, trends, and contribution to the cosmetic products market
• Strategic profiling of key players of the cosmetic products market, and a comprehensive analysis of their core competencies in each segment
• Tracking and analysis of competitive developments such as alliances, joint ventures, and mergers & acquisitions in the cosmetic products industry
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1.2 REPORT DESCRIPTION
Cosmetics are substances used to beautify and enhance the appearance of the human body. They are mostly composed of chemical constituents that are derived from natural or synthetic sources. With the increase in disposable income, improved economy, and changing lifestyle of people, the demand for cosmetic products has risen and the cosmetics market is progressing at a significant rate. Cosmetics are primarily segregated as skin care, color cosmetics, fragrance & deodorant, hair care, sun care, nail care, oral hygiene, soap, bath & shower products, and personal hygiene.
The report provides a complete analysis of the leading players in the cosmetics products segment and the key segments occupying the major shares, with a clear insight and commentary on the developments and trends. The report also includes a chronology of developments with respect to new products and their applications. The market growth is also attributed to growing demand and penetration of organic cosmetic products. The cosmetic companies successfully abide by the regulations made by government agencies keeping in concern the safety of the people using cosmetic products.
1.3 MARKETS COVERED
This report focuses on the global cosmetic products market. The research categorizes the global cosmetic products market on the basis of type, distribution channel, and geography.
On the basis of type
• Skin care
• Color cosmetics
• Fragrance & deodorant
• Hair care
• Sun care
• Nail care
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• Oral hygiene
• Soap, bath, and shower products
• Personal hygiene
• Others (baby care, depilatory products, and so on)
On the basis of distribution channel
• Supermarket
• Pharmacy & Drug Store
• Department Store
• Direct Selling
• Specialty Store
• Internet Retailing
• Others (shopping clubs, retail shops, and so on) On the basis of geography
• North America
• Europe
• Asia-Pacific
• ROW
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1.4 STAKEHOLDERS
• Cosmetic products manufacturers/suppliers
• Cosmetic ingredients manufacturers
• Retailers, wholesalers, and distributors
• Logistics and transporters
• Regulatory bodies and institutions
• Research and consulting firms
• Government organizations
1.5 RESEARCH METHODOLOGY
This research study involved the usage of extensive secondary sources such as directories, and databases, cosmetic magazines, cosmetic product books, company newsletters, information portals such as Hoovers, Bloomberg, Factiva, and several others to identify and collect information useful for the extensive technical, market-oriented, and commercial study of the market. The primary sources were mainly industry experts from core and related industries, preferred suppliers, manufacturers, administrators, industry experts, technology developers, alliances, and organizations that are related to all the segments of the industry’s value chain. All primary sources were interviewed to obtain and verify critical qualitative and quantitative information as well as to assess future prospects. The following illustrative figure shows the market research methodology applied to assemble this report on the cosmetic products market.
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FIGURE 1
RESEARCH METHODOLOGY
• Geographical markets with their market shares • Market trends • Market classification • Value chain Secondary Research • Key players • End-use applications • Annual reports of key industry players • Technological developments
• Number validation • Competitive landscape validation • Market dynamics validation Primary Research
• To p -Down approach • Bottom-Up approach • Data triangulation • Qualitative and quantitative analysis • Market segmentation Market Crackdown • Market estimates • Market forecasts
Source: MarketsandMarkets Analysis
The extensive secondary research process for this study involved several secondary sources such as Canadian Cosmetic, Toiletry and Fragrance Association, Confederation of Indian Industries, China National Commercial Information Centre, The Cosmetic, Toiletry and Perfumery Association, certified publications, articles from recognized authors, annual reports of companies, gold standard & silver standard websites, directories, and databases. They were used to identify and collect information useful for a broad technical and commercial study of the market. Secondary research was mainly conducted to obtain key information about the
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industry’s value chain, the total pool of key players, market classification and segmentation according to industry trends to the bottom-most level, along with geographical markets and key developments in the cosmetic products market.
Primary research was conducted to validate the data obtained through secondary research for the cosmetic products market. After a complete market engineering with calculations, primary interviews were used to obtain market statistics, with market size estimations, market forecasting, market crackdown, and data triangulation. The methodology for these quantitative data processes is explained in the sections below. The primary sources–industry experts such as CEOs, Vice Presidents, Marketing Director, Technology & Innovation Directors and related key executives from various key companies and organizations in the cosmetic products industry and related industries were interviewed to obtain and verify both qualitative and quantitative aspects of this research study. Extensive primary research was conducted to gather exhaustive information, verify, and validate, segmentation types, industry trends, key players, the competitive landscape of each technology used, key market dynamics such as drivers, restraints, opportunities, burning issues, winning imperatives, key player strategies, and the critical numbers arrived at.
Top-down and bottom-up approaches were used for the complete market engineering and market crackdown. Data triangulation methods were used to perform market estimation and market forecasting for the entire segment and sub-segment markets listed in this report. Extensive qualitative and further quantitative analysis was also carried out based on all the numbers arrived at in the complete market engineering process, to list out key information through the report.
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1.5.1 MARKET SIZE ESTIMATION
Both ‘Top-Down’ and ‘Bottom-Up’ approaches were used to estimate and validate the total size of the market. These approaches were also used extensively to estimate the market size of various dependent sub-markets in the overall cosmetic products market. The research methodology used to estimate the market is as follows:
• Key players in the industry and markets have been identified through extensive secondary research
• Industry value chain and market values were determined through primary and secondary research
• All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources
• All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data
• The research includes a study of the reports, reviews, and newsletters of top market players and also extensive interviews for key opinions from leaders such as CEOs, directors, and marketing executives
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The following figure shows an illustrative representation of the complete market size estimation process implemented in this research study, for an overall market size estimation of the cosmetic products market, in a consolidated format.
FIGURE 2
COSMETICS PRODUCTS: MARKET SIZE ESTIMATION METHODOLOGY
Total cosmetic market
Total market estimation
Percentage split-up of market segments
Geography-wise market crack down Market segments by type, distribution channel and geography
Sub- segments Company-wise revenues for cosmetics
Source: MarketsandMarkets Analysis
Firstly, the bottom-up procedure was implemented to arrive at the overall size of the cosmetic products market from the revenue of the key players (companies), and their market shares. Calculations based on the revenue of key companies identified and country-wise market shares led to the estimation of the overall market size. This overall market size was used in the top- down procedure to estimate the size of all the other individual markets in the segmentation by technology, application, and geography via percentage splits from secondary and primary research.
For the calculation of each type of a specific market segment, the most appropriate immediate parent market size was used for implementing the top-down procedure. The bottom-up
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procedure was also implemented on data extracted from secondary research, to validate the market segment size obtained.
Market shares were then estimated for each of the companies to verify the revenues which were earlier used in the bottom-up procedure. With the data triangulation procedure and validation of data through primaries, the exact values of the overall parent market size, and each individual chipset market size were determined in this market research study. The data triangulation procedure implemented is explained in the next section.
1.5.1.1 Market Crackdown & Data Triangulation
After arriving at the overall market size from the market size estimation process explained above, the total market was split into several segments and sub-segments, by various types of classifications. In order to complete the overall market engineering process and arrive at exact statistics for all the market segments and sub-segments, the data triangulation and market crackdown procedures explained below were implemented wherever applicable.
The following figure shows the market crackdown structure and data triangulation methodology implemented in the market engineering process of making this report.
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FIGURE 3
DATA TRIANGULATION METHODOLOGY
Secondary Research
Cosmetic Products Market
Primary Analytics Research
Source: MarketsandMarkets Analysis
TABLE 1
COSMETIC PRODUCTS: MARKET ESTIMATION
Market Methodology
• The overall cosmetic products market was calculated by segmentation into micro-markets based on the share of each type, distribution channel, and geography.
Approach • The market size was obtained through secondary sources
• The major market players were identified using secondary and primary research. Based on that, their market shares were evaluated. This includes a study of the top market players and interviews with key
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Market Methodology
opinion leaders such as CEOs, directors, and marketing people
• The size of the overall market was determined by forecasting techniques based on the demand for cosmetic products in different regions, which were validated through primary sources
• The market data is available from 2012 to 2019, with a CAGR from 2014 to 2019
The cosmetic products market value was segmented based on type into:
• Skin care
• Color cosmetics
• Fragrance & deodorant
• Hair care Cosmetic products • Sun care type • Nail care
• Oral hygiene
• Soap, bath & shower products
• Personal hygiene
• Others (baby care, depilatory products, and so on)
The cosmetics market based on the distribution channel has segments that include:
• Supermarket
• Pharmacy & Drug Store
• Department Store Cosmetics Market by distribution channel • Direct Selling
• Specialty Store
• Beauty Salon
• Internet Retailing
• Others (shopping clubs, retail shops, and so on)
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Market Methodology
The geographical split was determined using secondary sources verified through primary respondents. Demand in different regions (North America, Europe, Asia-Pacific, and ROW) was considered while estimating the share Cosmetic products of different regions in the cosmetic products market. by geography The market estimation was also based on various parameters such as the number of players in a particular region, demand trends, and the extent of research activity, GDP, and the population of the region.
Source: MarketsandMarkets Analysis
1.5.1.2 Bifurcation of the years considered for Food Diagnostics Market
Year Description
• Base year is the reference year used for making Base year projections/analysis
• Base year considered in the report is 2013
• Past years taken into consideration for future trend analysis Historical year • Historical years considered in the report those before 2012
• Future years for which estimation or projection is done Year of projection • Future years considered in the report were those from 2014 to 2019
Source: MarketsandMarkets Analysis
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1.5.1.3 Assumptions Made for Cosmetic Products Market
Parameter Assumptions
• Market value ($billion) covers cosmetic products
Definition • Total market value was derived by compiling the companies’ annual revenue for the cosmetic products
Exchange rates All USD exchange rates are as of 2012
• Prices have been assumed to be constant to study countries in the same Pricing data region.
• Inflation is not a part of pricing.
• The numbers, in terms of value, are rounded-off at subsequent levels Price trends • Wherever the actual data was not available, food and drink retail sales were considered
Source: MarketsandMarkets Analysis
1.5.1.4 Key Data Points Taken from Secondary Sources
Parameter Data point
Classification, applications, and usage pattern as per the region and Type respective countries
Range of various ingredients, usage pattern as per the region, lifestyle, and Formulations their future trends
Classification, maximum sales, consumer preferences, and their future Sales channel trends
Trade statistics, personal & cosmetic industry statistics, global and regional market demand trends, industry association reports, and government Regional data reports
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Parameter Data point
Annual reports, product portfolios, regional and market forecast Manufacturers publications, market participants, developments, and strategies
Source: MarketsandMarkets Analysis
1.5.1.5 Key Data Points Taken from Primary Sources
Parameter Data points
• Europe dominates the cosmetic products market, geographically Market share • Hair care dominates the cosmetic products market
• U.S., Japan, and France registered major sale of cosmetic products in Growth trends 2012
Market • Additional investment on R&D and innovation of cosmetic products with developments key players in cosmetic products market
Source: MarketsandMarkets Analysis
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2 EXECUTIVE SUMMARY
Globally, the cosmetic products market has been growing substantially since the last two decades owing to the changes in fashion trends and consumer preferences. People of all ages and genders have a desire to look presentable in all phases of life. It is cosmetics that provide this presentable appearance as well as confidence to the consumers.
Cosmetic products are generally categorized as skin care, hair care, nail care, color cosmetics, fragrances, personal hygiene products, oral care, bathing shower gel, and feminine hygiene products. Cosmetic products are formulated using minerals, chemicals, and natural ingredients. These cosmetic products are supplied to end-consumers through distribution channels such as supermarkets, pharmacy & drug stores, department stores, specialty stores, Internet, beauty salons, and shopping clubs. All these provide a convenient way of purchasing cosmetic products to the consumers by offering wide array of high quality and advanced formulations.
Consumers in the age group of the late twenties and above are generally concerned about skin-related issues such as wrinkles, fine lines, dark spots, freckles, saggy skin, patchy skin, and dull skin. Anti-wrinkle creams, lotions, face masks and body washes help in fighting these signs of aging. They also rejuvenate and nourish the skin, improve the complexion, and make the skin glow. The male grooming cosmetic products segment is growing at a fast pace with the growing demand from males for appearance-enhancing products. The demand for cosmetic products has risen because of the increase in disposable income, growth in the economy, improvement in living standards, and changes in fashion trends. All these factors drive the growth of the cosmetic products market.
The leading industry players in the cosmetic products market are the L’Oreal Group (France), The Estée Lauder Companies, Inc. (U.S.), Avon Products, Inc. (U.S.), Unilever PLC (U.K.), and Oriflame Cosmetics (Luxembourg). These multinational companies focus on developing innovative products with new technical advancements by carrying out intensive R&D. The other strategic approach followed by these companies is expansion in the regions with the potential of high demand for cosmetic products, in order to strengthen their position across the world.
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The cosmetic product manufacturing companies follow certain guidelines specified by government bodies to ensure product safety and safeguard consumer interest.
FIGURE 4
COSMETIC PRODUCTS MARKET SHARE (VALUE), BY GEOGRAPHY, 2013
XX%
XX% Eu As No XX% RO
XX%
Source: MarketsandMarkets Analysis
The cosmetic products market was dominated by Europe with a share of XX% in 2013. Germany dominated the European market and accounted for a share of XX% for the same year. The Asia-Pacific region is projected to be the fastest growing market at a CAGR of XX% from 2014 to 2019. The leading players in the cosmetic products market prefer strategies such as new product launches and expansions in new geographies.
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3 PREMIUM INSIGHTS
FIGURE 5
COSMETIC PRODUCTS MARKET SEGMENTATION
COSMETIC PRODUCTS MARKET
DISTRIBUTION TYPE GEOGRAPHY CHANNEL
. Skin care . Super markets . North America . Hair care . Department stores . Europe . Sun care . Specialty stores . Asia-Pacific . Color cosmetics . Internet retailing . ROW . Personal hygiene . Direct selling . Fragrances & . Pharmacy & drug deodorants stores . Oral hygiene . Beauty salons . Soaps, bath & . Others** shower products . Others*
*Baby care, depilatory products, etc. **Shopping club, retail shops, etc.
Source: MarketsandMarkets Analysis
The cosmetic products market is segmented on the basis of type, distribution channel, and geography. The types of cosmetic products include color cosmetics, fragrances & deodorants, soaps, bath & shower products, along with skin care, hair care, personal hygiene, oral hygiene products. The others segment includes baby care products, depilatory products, etc. The distribution channel of cosmetic products is segmented into supermarkets, department stores, specialty stores, Internet retailing, direct selling, pharmacy & drug stores, beauty salons, and others such as shopping clubs, retail shops, etc. The market is also segmented on the basis of
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geography based on the four major regions: North America, Europe, Asia-Pacific, and Rest of the World (ROW).
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4 INDUSTRY ANALYSIS
4.1 SUPPLY CHAIN ANALYSIS
FIGURE 6
COSMETIC PRODUCTS SUPPLY CHAIN ANALYSIS
GOVERNMENT REGULATIONS
Raw Material Supplier Cosmetic Manufacturers Distributor . Chemicals Ingredients . Skin Care Cosmetics . Wholesaler . Organic Ingredients . Hair Care Cosmetics . Retailer . Nail Care Cosmetics . Color Cosmetics . Personal Hygiene End Consumer Products
Source: Markets and Markets Analysis
The raw materials used for manufacturing cosmetic products are the following: heterogeneous systems emulsifiers for creams and lotions, beeswax, hydrogenated oils, coloring agents, anti- oxidizing agents, clay, aloe vera, fatty acid esters, mineral pigments like mica, iron oxide, tin oxide, zinc oxide, titanium oxide, glycerol, acrylic polymer, cetyl alcohol, cationic surfactants, vegetable oils, and preservatives. These raw materials are then supplied to cosmetic product manufacturing units, where they ingredients are processed into final cosmetic products.
The steps involved in the process of cosmetics manufacturing are raw material mixing, heating, grinding, setting & separation of materials for impurities, molding, cooling, manual or automatic mold releasing, finishing & assembly of final product, and packaging. There are regulatory bodies that play the vital role of approving the chemicals and label specifications used in the cosmetic products.
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The final packaged cosmetic products are supplied to distributors for further supply to retailers, from where they are sent to department stores, specialty stores, pharmacy & drug stores, and ultimately to consumers.
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5 MARKET OVERVIEW
5.1 INTRODUCTION
Cosmetics are formulated using both synthetic and natural ingredients to cleanse, beautify, and enhance appearance and also maintain personal hygiene. The billion dollar cosmetics industry is fragmented into skin care cosmetics, hair care cosmetics, color cosmetics, nail care cosmetics, fragrances, and personal hygiene products. The tremendous amount of change and development in high-quality cosmetic products are an outcome of high level R&D, new technology, and innovation. Cosmetic products follow certain guidelines specified by government agencies to guarantee product safety and protect consumer interest.
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5.2 HISTORY & EVOLUTION
FIGURE 7
TIMELINE FOR EVOLUTION OF COSMETICS
Archeological evidence of cosmetics in ancient Egypt 4000 BC
•Use of eggs, gelatin, gum Arabic, and beeswax in China 3000 BC
•Japanese and Chinese use rice powder to paint face and henna to color hair 1500 BC
•Greeks use lead powder for face and lipstick made from red iron 1000 BC
•Romans use flour & butter on pimples and sheep fat & blood to paint finger nails 100 AD
300-400 •Use of Henna in India and North Africa to paint hands and feet AD
•Perfumes imported from the Middle East to Europe for the first time 1200 AD
•Egg whites used to enhance complexion. Dyed hair becomes fashionable in England. Italy and France become main centers for manufacturing cosmetics 1300- in Europe 1500 AD
•Zinc oxide replaces lead and copper powder in facial cosmetic products 19th
20th •Cosmetics gain popularity in Europe and U.S., owing to theater and ballet Century
21st •Cosmetics become popular worldwide as an outcome of developments in manufacturing Century
Source: MarketsandMarkets Analysis
The use of cosmetics in ancient Egypt was both ornamental and spiritual. They used perfumes in religious rituals. Rose water, scented oils, creams, beeswax were used to maintain hygiene. They used kohl and green eyeliner made of malachite stone to protect the eyes from the hot desert sun.
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6 MARKET ANALYSIS
6.1 INTRODUCTION
The cosmetics industry is widespread, spanning across applications of hair care, skin care, nail care, make-up, etc. for women, aging population, etc. The growing diversity in the available cosmetic products also includes male grooming products. The cosmetic products available in different regions reflect the local environment and consumer demand. Demand for the anti- aging creams and skin care products continue in the developed countries, while demand for the natural/organic cosmetic products grows significantly in most of the countries. The demand for self-tanning lotions and creams have increased in the developed countries, while the demand for whitening creams and lotions increase in the developing countries such as India.
6.2 WINNING IMPERATIVES
6.2.1 R&D INITIATIVES & INNOVATIONS ENABLES COMPANY TO MAINTAIN GLOBAL COMPETITIVENESS
The cosmetics market is highly dynamic and the companies invest constantly to meet the evolving consumer demands and preferences. The market is characterized by a high rate of innovation and product development. R&D initiatives and innovations enable the company to maintain their global competitiveness, improve their product performances, and maintain the consumer demands.
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FIGURE 8
R&D TRENDS IN THE COSMETICS MARKET
Anti-aging skin care A growing market segment
Men’s grooming products Growing acceptance
Strong demand for mass fragrances, Mass products skin care, etc.
Increased consumer preference for less Natural cosmetics synthetic and more natural products
Cosmetic ingredients awareness and FDA regulation on cosmetic ingredients increasing risk
R&D Trends In The Cosmetic Market The In Cosmetic Trends R&D Technological advances for multi- Strong emphasis on value for money functional products
Source: Cosmetics Europe, COLIPA, Euromonitor, and MarketsandMarkets Analysis
The companies continue to drive the innovation and R&D trends in the market. The players in the market introduced anti-aging skin cream and lotions, natural cosmetics, oil-free products, etc. Introduction of products, which are in demand by the consumers, drives the cosmetics market.
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7 COSMETIC PRODUCTS MARKET, BY TYPE
7.1 INTRODUCTION
Over the last few decades, there has been tremendous growth in the usage of cosmetic products. Cosmetics play an essential role in self-grooming and maintaining personal hygiene. With increasing disposable income and growth in the economy, the demand for quality cosmetic products has also increased. The cosmetics market is segmented into skin care, hair care, nail care, fragrances, color cosmetics, personal hygiene products, oral care, bathing shower gels, and feminine hygiene products. The key manufacturers in the cosmetic products market are Procter & Gamble Co. (U.S.), the L’Oreal Group (France), The Estée Lauder Companies Inc. (U.S.), Johnson & Johnson (U.S.), Oriflame Cosmetics S.A. (Luxembourg), and Unilever PLC (U.K.).
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TABLE 2
COSMETIC PRODUCTS MARKET SIZE, BY TYPE, 2012–2019 ($BILLION)
CAGR% Type 2012 2013 2014-e 2019-p (2014-2019)
Skin Care XX XX XX XX XX
Color Cosmetics XX XX XX XX XX
Hair Care XX XX XX XX XX
Fragrances & Deodorants XX XX XX XX XX
Sun Care XX XX XX XX XX
Soap, Bath, & Shower XX XX XX XX XX Products
Oral Hygiene XX XX XX XX XX
Personal Hygiene XX XX XX XX XX
Others XX XX XX XX XX
Total XX XX XX XX XX
e - Estimated; p - Projected Source: Related Research Publications, Government Publications, Company Press Releases, Company Annual Reports, Company Websites, Company Publications, and MarketsandMarkets Analysis
In 2013, the cosmetic products market was valued at $XX billion, and is projected to grow at a CAGR of XX% to reach $XX billion by 2019. Throughout 2013, skin care was the most significant segment, with XX% of the global market share. Its growth is driven primarily by the Asian market. The hair care segment is projected to grow at the highest CAGR of XX% during the review period.
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8 COSMETIC PRODUCTS MARKET, BY DISTRIBUTION
CHANNEL
8.1 INTRODUCTION
Growing consciousness among people to look presentable and pamper themselves has fostered the growth of the cosmetic products market. Cosmetic products have become an integral part of a consumer’s life, with many referring to them as one of the important style statements. The association of cosmetic products with beauty has increased their demand throughout the world. With the intention to meet the demand for these cosmetic products, manufacturers channelize their distribution. Consumers are ready to spend more to enhance their appearance and beauty. This has led to the growth of the cosmetics industry and in turn, the expansion of distribution channels, worldwide.
FIGURE 9
COSMETIC PRODUCTS MARKET SHARE, BY DISTRIBUTION CHANNEL, (VALUE), 2013
XX% Supe XX% XX% Direc
XX% Pharm Depa Spec XX% XX% Beau Intern XX% XX% Other
Source: MarketsandMarkets analysis
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In 2013, supermarkets held the major market share in the global cosmetic products market in terms of distribution channel. The cosmetics industry incorporates an effective distribution channel, wherein several channel participants play equally essential roles for convenient and effective flow of large quantities of products. Time, storage, and transportation of products play a crucial role in delivering them from manufacturers to consumers. Distribution intermediates such as wholesalers, retailers, agents, and brokers help in the distribution of products. The supply chain operation varies with the company’s preferences. For example, Oriflame Cosmetics S.A. (Luxembourg) prefers to sell their products through direct selling.
FIGURE 10
TRADITIONAL DISTRIBUTION CHANNEL
Cosmetic Cosmetic Producer Cosmetic Retailer Consumer Wholesaler
Source: Markets and Markets Analysis
The traditional distribution channel of cosmetic products includes cosmetic producers who manufacture the products. The products are then sent to the wholesalers and retailers. The wholesalers or retailers sell the final products to the end consumers. Some cosmetic companies prefer a mixed distribution channel system to meet the consumers demand.
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9 COSMETIC PRODUCTS MARKET, BY GEOGRAPHY
9.1 INTRODUCTION
The cosmetics industry is characterized by global brands, with many multinational companies which sell a massive proportion of their products across the globe. The growing demand for cosmetic products can be attributed to changing lifestyles, increase in income, growth in economy and purchasing power of consumers, as well as consumer consciousness to look presentable and confident. All cosmetic companies abide by government regulations to ensure safety of the product and avoid adverse effects on the health of users.
The global cosmetics industry is categorized into six main segments by type: skin care, hair care, color, oral hygiene, personal hygiene, and fragrance. Skin care is dominant in the cosmetics industry. The U.S. cosmetics industry is the largest in the world, and it was valued $XX billion in 2013. Globally, Procter & Gamble Co. (U.S.) is the leading cosmetics manufacturing company, followed by the L’Oreal Group (France). The main driving force for the growth of the cosmetics market is the increased demand for natural ingredients, advanced technology, and the wide range of products.
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TABLE 3
COSMETIC PRODUCTS MARKET SIZE, BY GEOGRAPHY, 2012–2019 ($BILLION)
CAGR% Region 2012 2013 2014-e 2019-p (2014-2019)
North America XX XX XX XX XX
Europe XX XX XX XX XX
Asia-Pacific XX XX XX XX XX
ROW XX XX XX XX XX
Total XX XX XX XX XX
e – Estimated; p – Projected Source: Related Research Publications, Government Publications, Company Press Releases, Company Annual Reports, Company Websites, Company Publications, and MarketsandMarkets Analysis
The cosmetic products market was valued at $XX billion in 2013, and is estimated to be $XX billion in 2014. The Asia-Pacific region is the fastest growing market for cosmetic products owing to the developing economy, huge investments from multinational players, changes in lifestyle of consumers, high disposable income, and demand for sophisticated cosmetic products with advanced formulations.
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10 COMPETITIVE LANDSCAPE
10.1 INTRODUCTION
This section presents the important growth strategies adopted by companies in the cosmetic products market from 2009 to 2014. The main strategies identified are:
• Mergers & acquisitions
• Expansions & investments
• Agreements/Partnerships/Collaborations
• New product/technology launches
The global cosmetic products market is driven by the increase in disposable income, change in lifestyle and demand for products that enhance and beautify the appearance of the body. A substantial market share caters to key cosmetic product manufacturers such as L’Oreal Group (France), Shiseido Co. Ltd. (Japan), Avon Products Inc. (U.S.) and the Estée Lauder Companies Inc. (U.S.).
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10.1.1 COSMETIC PRODUCTS: HIGHLY COMPETITIVE MARKET
FIGURE 11
COSMETIC PRODUCTS MARKET DEVELOPMENTS, 2009-2014
XX XX
XX XX XX XX XX XX XX XX XX XX No. of of No. Developments XX XX XX XX XX XX XX XX XX
Source: MarketsandMarkets Analysis
A total of XX developments were registered in the cosmetic products market from 2009 to 2014. The cosmetic products market is growing due to new innovations and changing consumer preferences for cosmetic products that match their lifestyle. New products/technologies were launched with distinctive properties that increase the products appearance.. The number of developments increased from nine to thirty nine between 2009 and 2013, and the future is projected to see more product/technology launches in all categories of cosmetics.
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11 COMPANY PROFILES
11.1 L'ORÉAL GROUP
11.1.1 OVERVIEW
The L'Oréal Group is one of the largest cosmetics company dealing with beauty products. The company is engaged in manufacturing and selling of cosmetic, perfumes, and hair care products. The company operates in three branches, which are cosmetics, The Body Shop, and dermatology. The company operates through four business divisions, which are professional products, consumer products, L'Oréal Luxe, and active cosmetics. The company has six business segments including skin care, makeup, hair care, hair colorants, perfumes, and others. The leading brands of the company include L'Oreal Paris, Garnier, Maybelline, etc.
The company operates in 130 countries worldwide. The main competitors of the company are The Estée Lauder Companies Inc. (U.S.), Shiseido Co. Ltd. (Japan), and Revlon Inc. (U.S.).
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Company at a Glance Recent Financials
2012 XX XX XX Founded : 1909 XX XX XX XX XX% Headquarters : Clichy, France XX% XX XX% Employees : 72,600 XX Revenue : $XX Million XX XX R&D : $XX Million Revenue ($Million)Annual XX Ownership : SociétéAnonyme(S.A.) XX XX XX XX Annual revenue ($Million) % Change
Geographic Revenue Mix Business Revenue Mix
Division Business Segment
XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX % Consumer products Skincare Make-up L’Oréal luxe Haircare Hair colourants Professional products Perfumes Other Active cosmetics
Source: Company Publication and MarketsandMarkets Analysis
11.1.2 PRODUCTS
L'Oréal offers wide array of skin care and makeup products for eyes, face, etc.
TABLE 4
L’OREAL: PRODUCTS & THEIR DESCRIPTION
Division Brand Description
Lancôme The L'Oréal luxury division markets skin care, makeup Giorgio Armani Beauty and perfumes. The products are available at department L'Oréal Luxe stores, cosmetics stores, travel retail, and also own- Yves Saint Laurent brand boutiques and dedicated e-commerce websites. Beauté
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Division Brand Description
Biotherm
Kiehl’s
Ralph Lauren
Shu Uemura
Cacharel
Helena Rubinstein
Clarisonic
Diesel
Viktor&Rolf
Yue Sai
Maison Martin Margiela
Urban Decay
The Body The Body Shop offers all-natural and distinctive The Body Shop Shop products.
L’Oréal Professionnel
Kérastase
Redken The professional products division distributes their Professional Matrix products in salons. The division offers a wide array of Products brands to hair care salons for coloring, shape & styling, Division Pureology shampooing, and general hair care. Shu Uemura Art of Hair
Mizani
Essie
Active Vichy The active cosmetics division offers a wide range of
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Division Brand Description
Cosmetics La Roche-Posay dermo-cosmetics products that are sold in healthcare Division outlets including pharmacies, drugstores, and medi-spas. SkinCeuticals
Innéov
Roger&Gallet
Sanoflore
L’Oréal Paris
Garnier The consumer products division offers a wide range of Consumer Maybelline New York coloring products, hair care, makeup, and skin care
Products Softsheen.Carson products. The brands are distributed in mass retailing Division channels such as hypermarkets, supermarkets, drug Createurs de stores, and traditional stores. beaute.com
Essie
Source: Company Publications and MarketsandMarkets Analysis
11.1.3 STRATEGY & INSIGHTS
L’Oreal focuses on research and innovation to strengthen their global presence. The company focuses on developing unique brands in all the divisions to give the best beauty products. The company launched some of the finest products in all channels and categories to enhance their product offering and to drive the market. The company adopts the universalization strategy by creating products as per the needs, beauty rituals, and lifestyles in each region of the world to win the confidence of the consumers. The company acquired leading beauty companies and salons in different regions to broaden their global reach and conquer new consumers. The company continuously invests in new subsidiaries and R&I centers to meet the growing demand from the customers in different regions.
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11.1.4 DEVELOPMENTS
Date Approach Description
February L’Oreal and Shiseido finalized the agreement for the acquisition Agreement 2014 of Decleor (France) and Carita (France).
L’Oréal announced the start of a Group Travel Retail Division that will include brands from the active cosmetics, professional November Investment products, consumer products, and The Body Shop division. 2013 Travel Retail represents all products sold in the travel distribution channels such as airports, ferries, etc.
L’Oréal signed an agreement with Shiseido Company Ltd. October (Japan) for the acquisition of Decléor and Carita (Paris) that Agreement 2013 ranks 2nd in the global Professional Spa and Beauty Institute market.
L’Oréal announced the acquisition of XX% of Emporio Body October Store in Brazil by The Body Shop division to increase their Acquisition 2013 global reach. Emporio Body Store offers a complete range of beauty products.
L’Oréal announced plans to acquire Magic Holdings International Ltd. (China), a cosmetic facial masks specialist to August 2013 Acquisition develop the brand with advanced and applied research in their China Research & Innovation center and making an impact across the world.
L'Oréal acquired the Health & Beauty business of Interconsumer Products Limited (ICP) in Kenya to expand their May 2013 Acquisition African market. ICP manufactured hair care and skin care products in Nairobi (Kenya) and sold them in East African countries.
L’Oréal announced plans to develop their luxury beauty market in China, with the launch of Clarisonic in January 2013 and the April 2013 Expansion opening of a new Yves Saint Laurent Beauté boutique in May 2013.
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Date Approach Description
L’Oréal opened a new R&I Center in India to study the Indian January hair & skin specificities, the beauty routines, and expectations Investment 2013 of Indian consumers. The company is planning to invest $XX million (Rs. XX crores) in India from 2011 to 2016.
L'Oréal signed an agreement with Castanea Partners (U.S.) to November Agreement acquire Urban Decay (U.S.), a makeup specialty, to improve 2012 the product portfolio of L'Oréal Luxe division.
L’Oréal started L’Oréal KSA (Saudi Arabia), a new subsidiary November Expansion based on a joint venture with Al Naghi Group (Saudi Arabia) to 2012 strengthen their presence in Saudi Arabia.
L’Oréal invested $XX million to open the second plant in Mexico, the largest hair color production plant in the world, in November Investment terms of production capacity. The new factory doubles the 2012 production capacity in Mexico and will supply products to both Latin America and North America.
L'Oréal announced the acquisition of Vogue Group (Colombia), October Acquisition a leader in mass-market makeup, to strengthen their position 2012 in the makeup market.
L’Oréal USA, a subsidiary of L’Oreal announced the acquisition of Emiliani Enterprises (New Jersey), a professional distribution October Acquisition business, for their SalonCentric division. The acquisition 2012 expands their distribution in the U.S. and offer better service to American hair salons.
L’Oréal Russia announced the opening of the L’Oréal Academy September with an Evaluation Centre in Moscow for beauty professionals Expansion 2012 to meet the needs of Russian consumers and strengthen their offerings of local beauty products and services in Russia.
L’Oréal invested around $XX million to open their largest factory in the world in Indonesia to meet the rising demand in July 2012 Investment the southeast Asian beauty products market. The new factory serves as the production hub for the southeast Asian region.
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Date Approach Description
L’Oréal announced the acquisition of Cadum (France) to attract new consumers in France. The business will be included in April 2012 Acquisition France’s Consumer Products Division that comprises of three business units, i.e., L’Oréal Paris, Garnier-Gemey-Maybelline, and LaScad.
L'Oreal announced the launch of their Global Hair Research Centre in Paris to meet the consumers' needs. The Centre's March 2012 Expansion Research & Innovation programs are dedicated to the hair care profession and include hair coloring, hair care, styling, perms, smoothing, or straightening.
L’Oréal planned to invest around $XX million to open a Latin December American Research and Innovation Center in Rio de Janeiro, Expansion 2011 Brazil to increase the growth of innovative products in the Latin American market.
L'Oréal acquired Pacific Bioscience Laboratories Inc. (U.S.), a December leading company in sonic skin care devices. The acquisition Acquisition 2011 gave L’Oreal access to patented sonic skin care technology to enter the skin care devices category.
L’Oréal opened a new subsidiary in Kenya that will be the center for expanding the company’s activities in East Africa, December Expansion which includes Uganda, Tanzania, Rwanda, Burundi, and 2011 Ethiopia. The company also opened a subsidiary in Nigeria in September 2011.
L'Oréal USA, a subsidiary of L'Oréal, acquired the distribution December business of Peel’s Salon Services (Nebraska, U.S.) through Acquisition 2011 their SalonCentric division. The acquisition extended their distribution territory by covering the majority of the U.S.
September L’Oréal announced the opening of their first factory in Russia to Expansion 2010 meet the increasing demand at the local market in Russia.
L’Oréal USA, a subsidiary of L'Oréal announced the acquisition April 2010 Acquisition of Essie Cosmetics (U.S.), a nail color company to increase
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Date Approach Description
their share in the nail color and care market.
L'Oréal USA, a subsidiary of L'Oréal, acquired C.B. Sullivan January Acquisition (U.S.) through their SalonCentric division to extend their 2010 distribution network in the U.S.
L'Oréal USA, a subsidiary of L'Oréal, acquired Maly's Midwest January (U.S.) and Marshall Salon Services (U.S.) through their Acquisition 2010 SalonCentric division to expand their distribution network of American hair salons.
L’Oréal announced the opening of a biomethane center October developed by Eneco and Bio Energie Europa in Libramont Expansion 2009 (Belgium). The plant uses XX% green energy and is carbon- neutral.
Source: Company Press Releases, Company Annual Reports, Company Website, Company Publications, and MarketsandMarkets Analysis
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11.1.5 MNM VIEW
L'Oreal is one of the leading brands in the cosmetic industry. It has a strong brand portfolio that includes Garnier, Maybelline, Kerastase and Redken, all of which are recognized globally. It offers product under four categories which includes consumer, luxury, professional, and active cosmetics. It is intensely involved in designing their products as per the consumers and regional requirements. The products are sold from mass level to premium level. The company has optimized logistics and distribution channel, which has been the crux for their growth in the market. In order to lead the cosmetic market, L'Oreal must engage in more strategic alliances and should focus towards the emerging markets like China and India.
11.1.6 SWOT ANALYSIS
STRENGTHS WEAKNESSES
. XX . XX . XX . XX
L'ORÉAL GROUP . XX . XX . XX . XX
OPPORTUNITIES THREATS
Source: MarketsandMarkets analysis
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