Modern cosmetics industry originated in
Western Europe, heritage of the ancient art of home-based perfume workshop from
the 18th century to today’s factory production, brand operations in the global
market. Cosmetics has become a brand-driven, group-based global operations.
Cosmetics and beauty products are controlled by a few
multinationals, for instance, L’Oreal, Unilever, Procter & Gamble, Estee Lauder
and Shiseido. With the increasing popularity of social media, the cosmetics
industry is also borrowing these network platforms to narrow the distance with
consumers. These network platforms
not only have strong influence in young groups, but also can help cosmetic
companies to make advertisements for their products. There are a lot of videos
on YouTube are about cosmetic tutorials which are designed to teach viewers
about beauty, for example, how to use a particular type of product to create
their own make-up style which is a good way to helps cosmetics companies
promote their products to attract more consumers.
2. Global overview
The global make-up market has shown a steady growth in the past decade.
There has never been any stagnation or negative growth situation. Even in the
economic crisis, the growth slowed to 1% in 2009 but quickly recovered to
around 4% in the recovery which is the normal level of growth.
According to L’Oréal’s comprehensive analysis of the global beauty
market in its 2016 annual report (“The world of beauty in 2016”), the
global cosmetics market in 2016 is 186.2 billion euros which increased 4%. In
terms of growth rate, the increase of 5% in 2007 is the highest in the past ten
years and the increase of 1% in 2009 is the lowest in the past ten years.
Growth of the worldwide cosmetics market over ten years
Specifically, sales of online cosmetics in the world have accelerated in
recent years, increasing by 20.7% in 2016, far exceeding the growth rate of 4%
of the total cosmetics industry. By the end of 2016, E-commerce business
accounted for 11% of the global cosmetics market.
For the emerging markets maintain exciting growth and at the same time, Asia
Pacific market has become the world’s largest consumer market for cosmetics,
accounting for 36.9% of the global total, followed by Western Europe, North
America and Latin America.
From the product category, the largest one
in cosmetics industry is skin care market. The global market for skin care
products in 2016 reached 67.61 billion euros, accounting for 36.3% of the total
cosmetics market. The market size for hair care products was 42.63 billion
euros, accounting for 22.9% of the total. The makeup market was 33.92 billion
euros, accounting for 18.2% Perfume market size of 22.15 billion euros,
accounting for 12.0%; health supplies market size of 19.69 billion euros,
accounting for 10.5%.
From the major consumer
countries, cosmetics sales channels are mainly in department stores,
supermarkets, pharmacies and chain Monopoly. According to the actual situation
in different countries, there are obvious differences in the roles of various
channels. For instance, the United States with a well-developed circulation
industry and the warehousing and retail channels are one of its major features,
while the direct sales and open markets make up a big share in Russia. In
European developed countries such as Britain, Germany and Spain, the role of
department store channels is very small. Supermarkets, specialty stores and
pharmacies occupy a very high proportion, especially the pharmacy is the most
important sales channel. The British BOOTS chain stores occupy 70% Share.
3. Cosmetics in France
As we all know, France has a global leading position in
the cosmetics perfume industry. This is not only due to the excellent
traditions and global professional expertise that the industry has always
admired, but also to French innovation ability in this industry. France is the
world’s number one exporter of cosmetics, and in this industry, “Made in France”
is still a label of great quality in the whole world. Moreover, French cosmetic
products are exported to more than 200 countries and for those emerging countries,
the cosmetic companies in France still try to increased their global market
Exports in 2016 exceeded 12 billion euros mark in the
cosmetics trade surplus reached 9.2 billion euros, and the global cosmetics
market accounted for 1/4 occupied by the French brands. For China, France is
the largest cosmetic supplier. In 2016, the export of French cosmetics to China
increased by 15% to 783 million euros, accounting for 31% of China’s imported
cosmetics. This also allows the French cosmetics industry to become the third
largest exporter after aviation, wine and spirits.
4. Cosmetics in China
China’s cosmetics industry is developing rapidly and has
become a new consumer hot spot. With the global luxury goods industry continued
downturn, the Chinese luxury goods market continued to shrink while the
cosmetics industry has ushered in its “new era.” As China has
liberalized the restrictions on imported cosmetics, the international cosmetics
giant is accelerating the expansion of the Chinese market, making the Chinese
domestic brands to withstand the huge impact from the outside. In the Chinese
beauty cosmetics market, the market share of foreign capital or joint ventures
is close to 80%, while domestic cosmetics production can only meet the needs of
Chinese consumers by launching medium and low-grade products through
Sino-foreign joint ventures.
In recent years, with the popularization and development
of the Internet, the channel of electricity supplier has developed rapidly.
According to statistics, in 2015, the scale of online transaction of cosmetics
in China is about 152.6 billion yuan and the penetration rate of cosmetics in
the retail line is 29%. It is estimated that by 2018, 300 billion yuan.
Take L’Oreal Paris as an example. According to the latest
mid-year report released in 2016, as of the end of June this year, e-commerce
sales rose 33%. Currently, the contribution of global e-commerce sales have
accounted for 6% of L’Oreal Group’s total sales. In 2015, L’Oreal sales reached
1.3 billion euros, growing rapidly, accounting for more than 5% of the Group’s
sales, which is equivalent to the overall sales of L’Oreal’s fifth largest
market in Germany. In the past five years, e-commerce has jumped to become the
top three distributors of L’Oreal in China. In 2015, E-commerce sales increased
60% over last year. Cosmetics companies in China see the importance of
e-commerce channels and have invested heavily.
health and product safety concerns, people’s growing awareness of green
products and harmful chemical threats, and the demand for organic green nursing
products will continue to grow.
December 2015, the United Nations Climate Conference was held in Paris. Major
consumer product manufacturers also responded to the call for energy conservation
and emission reduction. They jointly signed and set emission targets and
committed themselves to developing renewable resources.
Cosmetics design concluded that sustainability is still something that the
cosmetics industry needs to be aware of. Like packaging, many businesses are
already using environmentally friendly and recyclable materials.
also be a priority for the beauty industry, with many companies saying they
will save water in the production of beauty products. And according to Mintel
introduction, the future of beauty products must have a clear environmental
standpoint to show consumers that the brand solution to water shortages, to
help them control the personal water.
In recent years, natural organic
care products market continues to heat up, according to the US website
fashionmag.com reported that in the past ten years, natural beauty products
become beauty and personal care industry’s number one growth point, with an
average annual increase of 20%, of which the representative Brands include: The
Body Shop, Kiehl’s and Burt’s Bees. The United States market research firm
Grand View Research predicts that by 2020, organic natural care products will
double the market size.
Cosmetics Consumers did not
change their purchasing behaviour when the crisis came and did not reduce the
value of cosmetic evaluation. It can be said that consumers’ enthusiasm for
cosmetics is higher than ever before. Cosmetics Market as an innovation driven
seller market with obvious characteristics, consumers are willing to pay for
high-quality and new attractive products.