Make-up continues to pull the global cosmetic market upwards

All the latest studies prove it, the global cosmetic market remains strong despite a difficult economic environment. A market particularly stimulated by the make-up segment that is constantly innovating to offer new trends and new “looks” to women. In times of crisis, for women, it is all the more important to cultivate one’s well-being, and take care of one’s self. “Do it yourself” trends emerge on the market when the economic factor becomes important in the use of personal care products. The make-up segment enjoys a high attraction for natural ingredients and brands compete to provide an always more natural comfort to make-up gestures. In addition, the world keeps moving faster and faster, and make-up users want products which are more convenient, more efficient, and easier to use, hence their growing interest for BB creams (Blemish Balm creams: 3-in-1 creams to even up the complexion, correct and give a natural glow to the face), and the compact all-in-one make-up cases.

The market is enjoying ongoing launches (cosmetic brands, ready-to-wear and Couture brands) and innovations. Make-up is a fashion accessory of its own, and everyone wants a slice of cake, in one of the rare global markets to remain dynamic in these times of crisis.

Make-up in the world: a market worth USD 55 billions!

The global market of make-up represented USD 55 billions in 2012, according to a Euromonitor projection. Asia and Western Europe still lead the market with more than 50% of its total value, followed closely by North America.

Despite the international crisis the make-up market continues to grow by + 5.7% and remains dynamic. It still offers opportunities to brands who are innovative and regularly launch new products to supply this market and meet increasingly high demands.

Europe comes in second place representing more than USD 12 billions, even if it is the market that recorded the lowest increase in 2011, with only + 3.6%.

The South American market is the one with the fastest growth, with + 8.6% in a year, and opens the door to opportunities. However, economic protectionism is growing on this continent (with tax increases, measures promoting national preference and to strengthening regulations). European cosmetic brands will probably need to work on finding local agreements, provide their expertise in order to conquer this fast growing market. Economic growth focuses on three countries (Argentina, Brazil, Mexico), i.e., 74% of the area’s GDP, but “secondary” markets also offer opportunities (Colombia, Peru, Panama, Costa Rica…).

But which are the most buoyant segments in make-up?

Face make-up remains the first segment of the market, with a value of nearly USD 20 billions. The segment is strongly boosted by the famous “BB Creams” for which many brands have developed their own version.

This cream imparts make-up with a “face care” property bringing it closer to the current consumption trends of women favouring more natural and easier to use treatments (all-in-one).

Innovation also focuses on offering an “always more perfect complexion”. With currents trends for natural products, women want a foundation or a powder which is increasingly akin to their natural skin. Make-up brands and distributors are therefore developing new tricks to meet this demand (Boots, and its concept of complexion test). The segment coming in second place is eye make-up with a value of nearly USD 15 billions In consumer trends are emerging products with a long wear and easy to apply, even with women on the move (in public transports, for example) with always more innovative packagings (all-in-one kits, or easy of use products , i.e., Benefit, Bourjois). There was an emphasis on eyeliners in 2012, that will continue in 2013.

The third segment is make-up for lips, worth USD 13 billions. This segment includes lipsticks, lip gloss and other care/make-up products for the lips. The year 2012 was the lipstick year with bold colours, and glosses have improved formulas, are less tacky and offer a wide variety of effects from bright to mat.

The fourth segment is the one of nails, with a value of USD 6.3 billions. The nail care category is the one which enjoys the highest growth between 2011 and 2012, with +7.7%, with strong performance from nail polishes. Nail polish has become the ultimate fashion accessory. The “do-it-yourself” trend –instead of going in beauty salons, has benefited to the nail sector, in particular with the development of Nail Art, acid colours, and increasingly daring effects (iridescent, metal, etc.), with a “feather” effect from the Nails Inc. brand, or “sand” effects from the OPI brand.

The global market of make-up has continued its progression during the 2011-2012 period, and although the European market posted a lower increase, it remains a major market. We will detail hereafter the European market of cosmetics in its globality (make-up being a part of it) in 2012 to identify the market trends.

During the first half of the year 2012, the European cosmetic market is not too dynamic and is even experiencing a general decline of its in sales in cosmetics.

Spain is probably the country that suffers the most with a – 9.8% drop in global sales to reach a global amount of EUR 402.9 million (according to SymphonyIRI).

Then Italy is also experiencing difficult start to the year 2012 with an overall decline in sales in cosmetics of around – 5.1% to EUR 902.8 million in market value (according to Unipro).

Germany is also experiencing a general decline in sales of cosmetics with – 3.1%, for a total market value of EUR 615.17 million.

As regards France, the market is also experiencing a slight decline of cosmetic sales in value of about – 1.3% in a market that represents EUR 675.17 million in value (according to SymphonyIRI).

The UK market is the only one to come unscathed. THe UK records in 2012, a stagnation of its sales in value, representing a market of £ 664.99 million (or EUR 844.53 in current euros at August 2012), according to Kantar Wordpanel.

The particular case of UK

In 2011, sales of cosmetics rose by 4.1% in value, reaching a total of £ 8.3 billion (source: CTPA, Kantar Worldpanel and SymphonyIRI).

Make-up accounts for 16% of the overall value of the cosmetic market in the UK (the same as for perfumes) and continues to gain market shares over the years. It has in particular, increased by + 8.4%, demonstrating the most significant market change.

The face care segment experienced the lowest increase, with only + 1.9%.

These figures are to be put in perspective as regards volumes and values. Indeed, the increase is more the result of price increases, as volumes in cosmetic sales only rose by + 0.1% compared to 2010.

Indeed, manufacturers and distributors are boosting consumption with offers of all sorts to promote products in these difficult times, and boost their revenues. The cosmetics segment, is the one whose average prices, even as part of promotional offers, are the highest. (Source CTPA)

In detail, the nail care segment is the one which experienced the largest increase in 2011 (+ 23.8% of sales in value, on the global value of the English cosmetic market) and continues to boost the market in 2012, and probably in 2013.

Face make-up which is the most important segment of the market with £507.75 million enjoys a significant increase of + 9.2%, a figure which pales nonetheless compared to nails, as seen above. The face segment is significantly boosted by both BB creams, and skin complexion which remains a sure value in this segment, and a source of innovation for brands and distributors.

Lips, the second segment in value, posted a more modest increase of only + 3.5% confirming the international trends.

Eyes which represent the fourth market segment, slightly behind the nails segment in value, recorded an increase of + 5.7% over the previous year.

To note that the British import their make-up products mainly from France (£ 678.4 millions), followed by Germany (£ 450.1 millions), the United States (£ 386.8 millions), Poland ($ 190.4 millions), and Italy (£ 182 millions) for a total of imported face care/make-up products of £ 1,240.4 millions in value.The British export their make-up products, mostly to Ireland (£ 472.5 millions), Germany (£ 433.9 millions), Belgium (£ 259.2 millions), the United States (£ 167.8 millions) and France (£ 142.3 millions), for a total of exported face care/make-up products of £ 1,113.1 millions. (Source CTPA and UKtradeinfo. Com).

The face segment which includes make-up bases, foundation, BB creams, concealer and powders, recorded a drop of 1.6%, but still represents a significant market segment with 38.1% market shares. Complexion products help boost the segment with innovations from brands and distributors. BOOTS, the specialized chain store and its brand No7, has launched its skin carnation testeur, and offers an extensive range of foundation to meet customer needs as closely as possible. Indeed, Boots says that 78% of British women would be willing to change their foundation products if they could find a shade more suited to their complexion. This responds to a growing demand for a more natural make-up.

The eye segment which includes eyeshadows, eyeliners, mascaras, powders/eyebrow pencils, remains relatively stability with a slight change of + 0.5% over the previous year for the same period and remains the main segment of make-up with a 43.2% market share.

Mascara remains a key values in the segment and continuse to boost sales with permanent launches and an always more innovative offer. Consumers showed a strong interest for eyeliners in 2012, with important launches and promotions and should continue on the same trend with the influence of fashion, and the current trend for “graphic eyes” with a double line of eyeliner on the eyelids.

The lip care segment makes the make-up market a bit livelier with a + 2.2% increase. Products continue to be innovative by offering always more comfort and hold to lipsticks, and more lip care properties (moisturising effect). Lipgloss also becomes easier to use (less tacky), and never stop innovating with many various effects (glitters, gloss, etc.) and colours with extended wear.

Nails, which are included in the hand care and nail care segment remain the fastest growing segment of the market, with a significant change in 2011, as we saw above. The evolution continues in 2012, with an increase of + 10% in the first half of the year over the same period of the previous year. This confirms the interest of the “do it yourself” and of the fashion accessories trend in nail polishes; “the nail polish is matched to the purse”, because even the famous British fashion brands are getting involved. TopShop has its own line of make-up, and has intensified its activity on polishes with 69 shades and has launched a range of nail art at the end of 2011.

UK has therefore been the only marked in Europe to have managed to play its card well, on the the first half of 2012, and to not be going downhill.