EVOLVING HABITS IN GLOBAL BEAUTY

IN-COSMETICS 2015, BARCELONA

ILDIKO SZALAI SENIOR ANALYST - BEAUTY AND PERSONAL CARE

PRIVATE LABEL AND CONSUMER TRENDS IN EUROPE

Euromonitor International: Strategic Global Market Research

Euromonitor International

GLOBAL INDUSTRY HIGHLIGHTS

NEW FRONTIERS IN EMERGING MARKETS
KEY INDUSTRY THEMES
CONCLUSIONS

GLOBAL INDUSTRY HIGHLIGHTS

Beauty Industry Growth Sustained

Premium vs Mass Proportion
Historic vs Forecast

Total / Premium / Mass Growth

Global Beauty
US$465bn in 2014, up
by US$23bn

7
6
5
% Value Growth
4
3
2
1
0
2008

Note: Inner circle 2009-14, outer circle 2014-19

2009
2010
Total Beauty
Mass Beauty

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2011
2012
2013
Premium Beauty

2014
Premium Beauty

Mass Beauty

GLOBAL INDUSTRY HIGHLIGHTS

Power Shift to Emerging Markets Continues Despite Slowdown

Developed vs. Emerging Markets in Total Beauty

600,000

7
6

500,000
400,000

267,919.50

5
4

173,066.00

300,000
3
% Growth

US$ million
200,000

2
100,000

-100,000

-1
2009

2010

Emerging

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2011

Developed

2012

2013

2014

2015

% Growth Developed markets

2016

2017

2018

2019

% Growth Emerging Markets

GLOBAL INDUSTRY HIGHLIGHTS

New Prospective Markets Beyond China and Brazil

Beauty Forecast Growth by Country

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GLOBAL INDUSTRY HIGHLIGHTS

Top 4 Beauty Categories Maintain Growth Momentum in 2014

Beauty Category Growth Performance 2013 vs 2014
120,000

9%
8%

100,000

7%

80,000

6%
5%

60,000
US$ million rsp

4%

40,000

3%
2%

20,000

1%

Retail Value Sales 2014 US$ mn

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0%

% Growth 2013

% Growth 2014

% value growth

GLOBAL INDUSTRY HIGHLIGHTS

Skin Care and Hair Care Largely Dominate Future Potential

Top Category by Country

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GLOBAL INDUSTRY HIGHLIGHTS

Top Growth Segments Bring New Lucrative Opportunities

Top Growth Beauty Categories

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GLOBAL INDUSTRY HIGHLIGHTS

NEW FRONTIERS IN EMERGING MARKETS
KEY INDUSTRY THEMES
CONCLUSIONS

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NEW FRONTIERS IN EMERGING MARKETS

New Emerging Frontier Markets

Emerging Markets Growth Prospects 2014-2019
10
9.1

9
8.0

8.1

5.3
3.7
3.53.4

1
0
100

6.1

6.4

5
% CAGR 2014-2019

7.5

6.9

7.9

2.3
1.6

2.0

4.1
3.5

2.5

4.6

4.7

2.3

1.8
0.9
1,000

10,000

Absolute Market Value Growth 2014-2019 US$ mn rsp

Euromonitor International

100,000

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NEW FRONTIERS IN EMERGING MARKETS

Common Growth Driving Factors in Emerging Markets

Young
populations
base

Expanding
middle class

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Intense
expansion of
multinationals
Urbanization

Emerging
markets
growth

Beauty habits
sophistication

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NEW FRONTIERS IN EMERGING MARKETS

Average Daily Grooming Routine Exceeds Half an Hour

Daily Grooming Time

10

20

30

40

50

60

70

80

Minutes Spent Daily on Grooming

More than 1 hour

Euromonitor International

31-60 minutes

16-30 minutes

Less than 15 minutes

90

100

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NEW FRONTIERS IN EMERGING MARKETS

Staples in Developing Markets Set for Higher Absolute Growth

Absolute Market Value Growth 2014-2019
(US$ million)
Middle East and Africa
450

Asia Pacific
2,500

400
2,000

350
US$ mn rsp

300
1,500

250
200

US$ mn rsp 1,000

150
100

500

50
0

Staples
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Non-essentials

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NEW FRONTIERS IN EMERGING MARKETS

Export of Beauty Routines

Ratio of Consumers Using Face Masks at Least Weekly

Ratio of Consumers Apply Hair Oil Daily

Ratio of Consumers Using Body Moisturizer Daily

France

Middle East

UK

Brazil

China

US

China

Germany

Mexico

Mexico

Spain

Japan

US

Brazil

Turkey

Indonesia

Colombia

Russia

India

Indonesia

China

Japan

Mexico

UAE: 13% CAGR

2014-2019

Turkey
15% y-o-y 2014

33% y-o-y 2014

20 40 60 80

% of respondents

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0 5 10152025303540
% of respondents

0 20 40 60 80
% of respondents

NEW FRONTIERS IN EMERGING MARKETS

Mass vs Premium Opportunities in Emerging Markets

86%

Of Face Masks in China is Mass

96%

Of Hair Care in India is Mass

99%

Of General Purpose Body

Moisturisers in Brazil is Mass

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NEW FRONTIERS IN EMERGING MARKETS

Premium Skin Care and Fragrance Potential

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17

GLOBAL INDUSTRY HIGHLIGHTS

NEW FRONTIERS IN EMERGING MARKETS
KEY INDUSTRY THEMES
CONCLUSIONS

KEY INDUSTRY THEMES

Key Drivers to Define the Industry in 2015 and Beyond

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19

KEY INDUSTRY THEMES

CUSTOMISATION

The Evolving Trend of Customisation

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20

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KEY INDUSTRY THEMES

CUSTOMISATION

Product Customization Themes Global Versus Regional Focus

Multiple
benefits add
value

Niche
category
focus

Raising the
bar on
ingredients
Growing
premium
potential

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Niche
category
focus

Brightening
Whitening
Anti-pollution

Growing
sophistication in
grooming
regimes

Scented
products

Product
safety
initiatives

KEY INDUSTRY THEMES

ASIANIFICATION

Asian Concepts Expanding into International Markets

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22

KEY INDUSTRY THEMES

ASIANIFICATION

Further Potential Asian Waves Heading to International Stage

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23

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KEY INDUSTRY THEMES

Growing International Demand for Brand Korea

Sulwhasoo on Amazon.co.uk

ASIANIFICATION

Best selling AmorePacific brands in the

US

AmorePacific Corp: Korean Brands Performance in China BPC 2009-2014

0.7
0.6
% market value share 0.5
0.4
0.3
0.2
0.1
0.0

Euromonitor International

Mamonde
Lanege
Innisfree

The FaceShop
2003: Establsihed
2014: 2,300 stores in 29 countries

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KEY INDUSTRY THEMES

Asian Players Intensify Competition

ASIANIFICATION

China: Share Growth in Selected BPC Companies 2009-2014

Internationals eroding market

value share

-3

-2

-1

Market value share growth (percentage points)

Euromonitor International

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KEY INDUSTRY THEMES

Regional Players Shake Up the Rankings

Global Ranking - Regional Players
50

Top Beauty Players Market Share

Henkel AG & Co
KGaA

45

Shiseido Co Ltd

ASIANIFICATION

40

Avon Products Inc

35

Johnson & Johnson

Inc

30

Este Lauder Cos

Inc

25
% value share

Beiersdorf AG

20

Colgate-Palmolive
Co

15

Unilever Group

10

L'Oral Groupe

Procter & Gamble

Co

0
2005
Euromonitor International

2014

KEY INDUSTRY THEMES

NICHE GROWTH DRIVERS

Wide Range of Niche Growth Drivers

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KEY INDUSTRY THEMES

NICHE GROWTH DRIVERS

Intensifying Acquisition Activities for Niche Brands 2014-2015

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NOVEL GROWTH CONCEPTS

Fastest Brands Globally Where is the Next Acquisition?

NICHE GROWTH DRIVERS

Fastest growing brands 2013-14 %

(17-90% growth)

Fastest growing brands 2013-14 %

(10-17% growth)

Innisfree
Rodan + Fields
Nip + Fab
Bulldog
Ciat
Glamglow
Black Up
Al Qurashi
Beauty Diary
Byredo
Baylis & Harding
Inglot
Aesop
Kiko Milano
Catrice
Mud
Bioderma

The Face Shop

Coreana
Herborist
Rodial
Urban Decay
Jurlique
Proya
Make Up For Ever
Black Opal
Marubi
Perfect
Dabur
Iman
Iope
Jo Malone
Godrej
MG

Euromonitor International

20

40

60

80

100

10

15

20

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KEY INDUSTRY THEMES

DIGITAL

From Niche Categories to Diversifying Niche Platforms

Digital

Euromonitor International

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KEY INDUSTRY THEMES

Internet Retailing Still a Relative Small Channel in Beauty

Internet Retailing Growth by Industry 2009-2014
180,000

40

160,000

35

140,000

30

120,000

25

DIGITAL

100,000

20

80,000

15

60,000

10
% CAGR 2009-2014

US$ million
40,000
20,000

2009

2014

Euromonitor International

% CAGR 2009-2014

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KEY INDUSTRY THEMES

Building Blocks of Digital Beauty Strategies

DIGITAL

Brand Building

Brand Engagement

Virtual Try On

Self-service Retail

Personalization

Consumer Analysis

Customized Solutions

Retail Curation
Focus on Target Audience

Best price
Purchase Motivation
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Comparability

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KEY INDUSTRY THEMES

Selling to More Informed and More Engaged Consumer

Frequency of Online Activities 2011/2013
Visit online news sites
Visit social networking sites
Stream or download audiovisual content online

DIGITAL

Use an internet banking service

Participate in microblogging
Upload/share photos or videos
Read reviews of products and services
Visit price comparison websites
Buy something online
0

10

20

30

% consumers with online activity once a week

2013

Euromonitor International

40
2011

50

60

70

GLOBAL INDUSTRY HIGHLIGHTS

NEW FRONTIERS IN EMERGING MARKETS
KEY INDUSTRY THEMES
CONCLUSION

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CONCLUSION

Future Growth Highlights

Absolute Beauty Market Value Growth by Country and
Category 2014-2019
3,457
3,675
20,097

21,052

4,001

20,115

5,212

5,780
2,112
2,228
3,711

China
India
Others

7,568

5,820
7,317

10,144
4,052

Brazil
Saudi Arabia

USA
Indonesia

Skin Care

Colour Cosmetics Hair Care

Fragrances Oral Care

Men's Grooming

Baby BPC

Bath and Shower

Deodorants

Categories marked with orange forecast to exceed global

beauty growth of 2.6% CAGR 2014-2019
Euromonitor International

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CONCLUSION

Reinvention in Global Beauty Required to Sustain Growth

personalisation
reinvention

reinvention

multi-cultural

reinvention

reinvention

customisation

reinvention

reinvention

Cross-categoryNiche segments
reinvention

reinvention

reinvention

asianification
reinvention

reinvention

premium
reinvention

Euromonitor International

Exclusive
reinvention

reinvention

Multi-benefit
reinvention

reinvention

Digital

THANK YOU FOR LISTENING

Ildiko Szalai
Senior Beauty and Personal Care Analyst
Ildiko.Szalai@euromonitor.com