Colour Cosmetics Make A Bid For Staple Status: New Growth Concepts Drive Demand

January 2017

Colour cosmetics is enjoying a period of impressive growth, fuelled by a powerful digital undercurrent that is fostering experimentation and visual sharing, as well as nurturing brand exposure on a global stage. It is expected to continue outperforming staple categories in the wider beauty industry, as spending per capita on colour cosmetics rises alongside female disposable incomes in emerging markets, and the commoditisation of colour cosmetics extends beyond developed regions.

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Growth rate ahead of the industry average

2015 saw the most robust growth since 2010, as colour cosmetics grew by 7% in value, equating to USD3.4 billion. Colour cosmetics has an edge over other discretionary categories in being visual, and easily shareable and coveted on social media.

Growth scattered across developed and developing regions

Developing regions are witnessing the most dynamic growth but with a lower value contribution, whilst developed markets grow steadily amid difficult market conditions and intense competition. Asia Pacific and North America defy the norm, with both growing strongly in value.

Mass reigns but market is balancing out

The industry remains mass-centric; however, evolving consumer priorities in developed markets are boosting premium, as consumers trade up to experience more, buy themselves time and favour a quality over quantity approach to living.

Lifestyle shifts engender cross-category innovation

The trend for holistic wellness is having reverberations across colour cosmetics, including inspiration from skin care and food, to formulations targeted at active and urban lifestyles. Facial make-up will remain the category leader by absorbing a range of these new influences.

Sustainable and ethical claims increasingly valued

A move from conspicuous to conscious consumption is seeing the importance of transparency rise, which explains why heritage names are falling out of favour in place of more meaningful niche brands.

Premium set to tip the scales

Growing sophistication in consumer tastes will drive premium growth faster than mass over 2015-2020. By 2020, the largest colour cosmetics region, North America, will be a majority premium market.

Introduction

Scope
Key findings

Regional Diversity in Demand

Colour cosmetics achieves its personal best
Growth scattered across both emerging and mature markets
S tabilisation persists in Western Europe despite market maturity
North America retains colour crown for now as consumers trade up
Asia’s triumph is a tale of two halves
Asia Pacific poised to lead the pack
China on course to overtake Japan as number two market
… providing there is no China hard landing
Brazil’s economic headache dents Latin America’s momentum
Middle East and Africa to play catch up with Latin America
Soft drivers will uphold Saudi Arabia’s growth prospects

The Evolution of Premium and Mass

Mass continues to reign but category is balancing out
Mass cosmetics for all but premium still only for some
Volume and value growth rates reveal diverse market environments
Global behemoths fall out of favour, as local players dominate
“Fashion for the face” climbs the ranks
Kiko reaps the benefits of increasing experimentation
Spain’s joint income-wealth distribution suits fast fashion principles
Premium benefits from conscious consumption
The birth of a new luxury: Icon vs. story
Niche serves as inspiration
Household names tap augmented reality to recreate story-telling
Younger consumers and premium buyers most digitally influenced
Premium lends itself to extensive make-up routines

Category and Innovation Dynamics

Facial make-up’s clout holds strong…
… but it is not a ubiquitous story
Lipstick effect in full force
C ategory cross-pollination brings extreme product hybridity
N ails also look further afield amidst deceleration
Lifestyle shifts engender innovation
Makeup wearers listen to their gut instinct
Educational level is key to awareness of “green” feature benefits
Sustainable claims increasingly valued
Minimising the trade off in “buying time”
Multicultural demands heighten globally
Religion a vast white space for marketers
Mascara wakes up to the heterogeneity of lashes
The me-conomy drives customisation
P ersonalisation in facial make-up: A vehicle for waste reduction
Water efficiency a key concern for water stressed markets
Less profit and more planet a win-win for stakeholders
Fresh skin care concerns to have knock-on effect in colour

Prospects

Shifting the premium power
Future implications of key demand drivers

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