The Skin Care Industry is an ever-improving, competitive and very technological environment ruled by well-established giants such as Avon, L’Oreal andProcter & Gamble’s Olay. They are not, however the only players around. There is always room for technology-focused companies to improve existing products and introduce ground-breaking innovations to the market; in fact this is an industry that attracts brilliant minds, as pointed out by Sabine Louët.
Market opportunity? Trend?
The U.S. represents $54.89 Billion in sales, but it is not considered the fastest growing market, or the biggest. Brandon Gaille presents a visual report titled 26 Cosmetic Industry Statistics and Trend, in which Asia/Pacific holds the 1st spot for “Top regions in global beauty sales” while China holds the 2nd spot for “Growing prestige beauty markets.” Gaille also mentions how active the industry is, in 2011 there were 35 strategic acquisitions in the beauty industry, 13 of them from the Skin Care Industry. It is not surprising to see large companies buying their way into these attractive and growing eastern markets. These industries seem to be able to survive even the worst of crisis.
But why have the Skin Care and Cosmetic industries carried on practically unscathed after the latest Global Economic crisis? By 2011 in the U.S., sales on “Total Beauty” products reached $9.5 Billion, a growth of over 11{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} from 2010. This may be the direct cause of the “Emotional Attachment” experienced by the users. In Gaille’s report, it is stated that 82{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of surveyed women believe that wearing make-up boosts their self-confidence, while 86{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of women find that wearing make-up improves their image. This result represent a mentality shared by most consumes, and it is reflected on the numbers: on average, women spend $144 a year on beauty products. In Brazil, consumers spend $240 a year on the same products, while in Britain, a woman will spend around $13,000 on similar products in her lifetime.
But as discussed above, Asia/Pacific has the fastest growing market for these products, and many believe this is only the beginning. Heng Shao is only one of the many analysts to cover the Chinese “Second Generation Rich” phenomena. In an article for Forbes, she gives an example of an average Chinese over-seas student that talks about the ‘new purchasing power’ of their generation. The numbers are considerable. So what other trends should we be monitoring?
Other Trends
TechNavio (a leading technology research and advisory company) analyzed a report from Market and Research’s “Global Skin Care Market 2010 – 2014” and one of the key findings reported was that there is a “Demand for whitening products globally.” This comes to no surprise as this particular trend continues its steady growth in popularity and acceptance throughout the eastern hemisphere. As mentioned by Andrew McDougall, “Skin lightening has long been a trend in Asia and is set to continue to boost the global market in the next five years, according to Global Industry Analysts.” The report also mentions how this specific market alone could reach an estimated value of $19.8 Billion by 2018. This trend is cultural and social, fueled by the idea that lighter skin represents beauty and wealth. The images of western models are synonyms of “beauty,” and this idea encourages young consumers to look for products that can help them achieve the “perfect look.” This trend can be seen no only in China, but in India and other Asian countries as well.
Ecological responsibility seems to be a growing factor in the Chinese/Asian consumer’s mind. A study conducted by Dr. Chan in 2001 revealed that the average Chinese consumer has positive feelings for Eco-friendly products and organization, scoring on average 5.28 in a 1 – 7 point base system (1 being negative and 7 being positive). Their actions however show that they only actively purchase green products when they can, scoring 2.04 on frequency and 1.89 on amount of money spent on these green products. The current situation is likely to change, since environmental issues are becoming a pressing matter in the eyes of both the Chinese government and the world. An article by Beina Xu for the Council on Foreign Relations shows how both the Chinese public and their government have started moving towards more environmentally friendly methods and industries. This is mentality is sure to spread and become a cultural characteristic of not only the Chinese people, but of the world.