Competitive Strategies in Beauty and Personal Care

December 2018

International players and heritage brands are increasingly facing competition from local and regional companies, niche labels and alternative business concepts. These challenges serve as an inspiration for innovation with multinationals actively exploring multiples shades of beauty health aligning portfolios, promoting sustainability, developing technology and looking to conquer key growth markets, employing different strategies from bolt-in acquisition to brand incubation.

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Key Findings

The global beauty industry has moderate level of consolidation across all regions

In both Asia Pacific and the Middle East and Africa, smaller, local and regional players still dominate the competitive landscape, but a contrasting consolidation trend has been unfolding over 2012-2017 in these two regions.

Uneven competitive landscape

One of the defining challenges in recent years has been the increasing competition international players and heritage brands face from local and regional companies, niche labels and alternative business concepts.

A health-aligned portfolio is a priority

Global beauty giants are increasingly responding to consumer demand for efficacy and health-aligned products by extending their existing portfolios with dermocosmetic brands, or those that have scientific backing, putting efficacy and therapeutic claims at the forefront.

Responding to the demand of ethical consumers with various initiatives

To stay relevant and appeal to ethical consumers, beauty players are increasingly putting ethical considerations at the top of their agendas, with various initiatives including sustainable ingredients sourcing, environmentally-friendly packaging, as well as giving back to society in the form of charity.

Multinationals fostering own disruptors amid rising indie brands

Large traditional beauty players are still looking for indie brands for growth and innovation, but they are no longer relying only on acquisitions. However, acquisitions are no longer enough as beauty giants are launching their own incubators, bringing a start-up mindset in replacement of traditional centralised and methodical R&D decision-making.

Voice technology is next technological frontier

The launch of voice-based devices Google Home and Amazon Alexa serves as another disruption to the BPC industry, representing an opportunity for brands to connect with consumers in the whole new way. Voice technology  isexpected to be exploited further with a purpose to bring personalised experiences to consumers.

Introduction

Scope
Key findings

Competitive Environment

Challenges to compete with smaller players across regions
North America still the most consolidated market
High industry concentration in staple categories
Skin care and baby products continue fragmenting
No major changes at the top of the table

Competitive Positioning

Intensifying competition as premium BPC thrives
Acquisitions to drive growth
Fostering own disruptors amid rising indie brands

Health Aligning Portfolio

Health and beauty convergence defines beauty perception
Companies on the acquisition spree tapping deeper into health
L’Oréal enhances experience of dermocosmetics selection and usage
Wave of natural and green claims as consumers pursue health
Beauty specialist retailers decode clean beauty

New Wave of Ethical

The rise of the ethical consumer
Sustainability is topping the agenda of every large industry player
Inclusivity is becoming the new norm
Sustainability battle between Unilever and L’Oréal

Developing Technology

Targeting digital beauty consumers
Beauty companies employ technology to elevate shopping experience
A new breed of personalisation powered by technology

Growing in New Markets

Leading players still betting on emerging markets
K-Beauty giants globalise…
…whilst J-Beauty reawakens

Future Strategies

Tapping into ingestibles as consumers seek beauty from inside out
Transforming retail into a wellness destination
Investing in skin microbiome research
Health going anti-taboo offers potential areas to expand
Reinventing natural beauty amongst evolving consumer perceptions
Voice technology is a new frontier of digital disruption

Appendix

Definitions

Appendix: Competitor Analytics

Competitor Analytics tool
Overview
Competitors
Market Overlap
Treemap
Overlap Matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models
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