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Health and Beauty We examine the trends underlying the growth of the global marketplace in health, beauty and hygiene. Our analysts will point the way forward by highlighting critical innovations and behaviours that are driving industry evolution.

Reinventing Colour Cosmetics through Novel Growth Concepts

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The global colour cosmetics market was worth US$57 billion in 2015, a figure which places it ahead of many basic consumer goods industries in size, such as that of the worldwide tea industry. With burgeoning female workforces leading to higher disposable incomes in many pivotal markets, such as China and India, spend per capita on colour cosmetics is growing ahead of female disposable income gains. It’s clear that women’s prioritisation of investing in their appearance is pushing the category towards staple status. In November 2016, Euromonitor International presented at Trends in Colour Cosmetics Europe, exploring how the commoditisation of colour cosmetics is manifesting in consumer preferences and being addressed through novel growth concepts.

Fashion for the face climbs the ranks

Mass products accounted for 64% of the colour cosmetics market in 2015 and with a wide consumer base comes diverse consumer profiles. The distribution of disposable income in the largest mass colour cosmetics markets in 2015 was erratic; countries varied from having the majority of their population earning in the top and middle echelons of disposable income, such as the US and Japan, to those where the largest proportion of adults sit in the bottom income bracket, like Mexico and Russia. This pattern, or lack of, shows that mass colour cosmetics are not solely reserved for low-earning consumers. Wealthier consumers shop across price platforms and are just as likely to purchase Lancôme as they are Maybelline, meaning brands must consider competitors of all price positioning. The differentiation lies in consumers who purchase mass through necessity and those that purchase mass for choice. The choice driver is indicative of a new wave of mass brands which are dominating the shelves in the form of “fast fashion” cosmetics and make the case for more sophisticated mass offerings which are distinguishable by more than just price. Fast fashion brands such as Kiko Milano, Catrice and Flormar are trend-aligned and work on high volumes and quick turnover of stock, and it is these which have exhibited dynamism in recent years over heritage mass players.

Premium set to tip the scales

Whilst mass has ubiquity, premium’s strength lies in its ability to create meaningful connections. Consequently, as mass will prolong its reign as market leader, premium will extend its period of sustained superior growth looking ahead, with the two segments growing at CAGRs of 3% and 4% respectively in the next five years. From a regional perspective, North America will become the first majority-premium colour cosmetics market by 2020, and in Western Europe, Middle East and Africa, and Latin America too, prestige will be more dynamic than mass. The rise of niche players, with the autonomy to establish authentic relationships, are a linchpin to premium’s success, proving that amidst “peak stuff”, a genuine relationship between brand, planet and consumer holds significant weight. This meaningful value triangle also lends itself to the premium sector, since sustainable processes and ingredients often demand a higher price tag. In this way, the perceived quality of premium products favours a less-is-more approach to consumption; conscious not conspicuous.

Colour cosmetics leaves no megatrend unturned

From green living to healthy living, colour cosmetics will face enduring pressure from megatrends shaping the wider consumer goods landscape. Basic functional offerings will no longer suffice and consumers will listen to their gut instinct, as seen previously in skincare. From gluten-free lipstick to vegan nail polish and fermented foundation, any novel formulation can be transferred to colour cosmetics. The same is applicable for skincare concerns; anti-pollution, infrared and HEV blue light from electronic devices can all be expected to dominate product marketing claims in the coming years. The increasingly valued measure of social impact is not letting the beauty industry off lightly either, as brands wake up to the idea that what is bad for the environment is bad for business. Water-efficient products, exhibiting waterless formulations or easily-removable claims, can expect to gather momentum. Similarly as shoppers embrace minimalism, waste reduction will top many agendas and set the stage for customisation in make-up to finally to shake its gimmicky image.

Customisation is no more an omnipresent opportunity than when we consider how colour cosmetics has come to penetrate the daily routines of women in all corners of the globe. The industry has come a long way when it comes to catering for the heterogeneity of facial features and as such it is now the norm for facial makeup to accommodate for over twenty skin tones as standard. However, accommodating for true ethnic diversity stretches far beyond just shades of foundation. Features such as lash length and type are of growing curiosity for brands, as well as religious opportunities including holiday gifting, halal and wudu-friendly products. It is often the case that domestic players already accommodate for the particulars of their indigenous populations and the challenge is often misinterpreted through a Western lens as a local one, when in fact it is international brands that need to strengthen their offerings.

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