Regional and local brands increasingly fuel global beauty industry growth. The top 10 emerging markets in terms of absolute value growth are projected to contribute 57% of the global absolute market gains through to 2022. Local brands in each of these markets are consistently among the top growth drivers. Their bearing on future growth should not be dismissed. Such brands are stiffening competition, making it harder for global rivals to gain strong growth platforms in opportunity zones.
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In the complex global competitive landscape amongst the fastest growing brands dynamically expanding local labels are becoming more prominent. Fuelled by their domestic markets they are rising in the global rankings.
Japanese brands have reigned in Asia Pacific, but over the forecast period it is expected that South Korean players will expand into the wider region, the challenge from Chinese brands rising significantly.
A growing number of local brands are rapidly gaining market share at the expense of international labels, with categories becoming increasingly fragmented. The penetration of local players in discretionary beauty categories is on the rise.
Native brands are at an advantage to incorporate local heritage with authenticity,credibility and at price points reaching a larger consumer base than global brands.
The rise of local competition in attractive opportunity zones is a significant challenge for multinationals, but additional problems arise as dynamically growing labels are expanding into new territories on the back of their home found success.
In 2017 the 6-month diplomatic feud between China and South Korea took a toll on sales of beauty companies, and operating profits also suffered, highlighting the need to reduce such strong reliance on just one export market.
The key factor behind J-Beauty’s growth acceleration in international markets is its successful differentiation strategies from the recent wave of Korean products.Japanese beauty is more focused on rituals, fewer steps with simple but powerful ingredients.