Background about the industry

Overview of the cosmetics industry

The cosmetics industry is a segment which belongs to the Beauty and Personal Care industry. Cosmetics companies deal with skincare and sun care products, makeup, fragrances, toiletries and various other grooming products.

Ernest & Young estimated the size of the market in 2012 and it reaches $245 billion that is to say €180 billion. Each product category has a dedicated weight in the 245$ billion revenues. The skin and the sun care category is the most important as it represents 29% of the whole revenues. The hair care category comes second with 29% of the revenues whereas the toiletries and deodorants category comes third with 16% of the revenues. Besides, when one considers the geographical share and the needs of each continent, Asia pacific comes first as its share reaches 34% of the whole revenues. Western Europe comes second with a share of 22% as it is a mature market as well as a well known market by big cosmetics companies. North America comes third with a share of 21% of the revenues. Thus, this explains why emerging markets are more and more the number one target of the cosmetics companies.

Cosmetics and beauty has traditionally been associated with women. However, these kinds of products are gaining popularity among men as well.

Most cosmetics companies rely on a multi-level distribution strategy. In fact, it includes placing products with department stores, specialty retailers, pharmacies, salons, spas, freestanding stores, travel retail outlets, website and mobile applications.

The cosmetics business is less sensitive to economic cycles compared to other items like automobile for instance. In fact, during the 2008-2009 recession growth in the Beauty and Personal Care industry fell moderately compared to the drop of the global GDP.

The main key players of the market are: L’Oréal, Unilever, Procter & Gamble, Avon and Estée Lauder.






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