Multicultural Beauty: Benefiting from Diversity

Strategy Briefing

About This Report

Mar 2016

Brands are increasingly segmenting offerings on the basis of ethnic and cultural needs, but the question is how are they developing such targeted solutions and what are the challenges? Do regional players with better understanding of indigenous market dynamics have greater competitive advantages over multinationals?

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Multicultural Beauty: Benefiting from Diversity

Understanding multicultural beauty

Multicultural beauty is being increasingly explored for future growth. This involves developing targeted lines and marketing strategies to target consumers from diverse cultural and ethnic backgrounds.

Growing demand influencers

Demographic shifts triggered by migration, flow of tourism, growing purchasing power of ethnic consumers in developed markets and urbanisation in emerging countries have been key demand drivers.

Multiple ways to target diversity

A key strategy is developing targeted marketing for the same product, highlighting the most relevant benefit to the target audience in order to optimise return.

Regional players show good performance

Some regional players have grown strongly thanks to their understanding of market dynamics. In recent years, they have also been expanding beyond their immediate markets.

Cultural influences drive innovation

Cross-cultural influence has become a major inspiration for innovation. South Korean beauty has been influencing brands globally, but mainstream brands are also incorporating exotic ingredients with strong health benefits.

More scope for growth

The segment is expected to witness more dynamism as technological developments help create a better understanding of diversity. More niche brands are expected to emerge as targeting diversity gains momentum.

Introduction

Scope
Key findings

Understanding multicultural beauty

Targeting diversity next stage to driving growth in beauty
Segmenting multicultural beauty: Two broad categories

Key demand influencers

Ethnic diversity drives multicultural beauty in the West
Ethnic composition in the UK expected to grow by 2030
Growing tourism in developed markets inspires multicultural beauty
Tourists spend on super premium beauty
Urbanisation triggers change in lifestyle in emerging markets
Higher income, expanding middle class and growing affordability
Growing demand for personalised beauty solutions

Targeting multicultural beauty

Developing market penetration in emerging markets in stages
Adapting to relevant retailing channels
Tapping into consumer preference for online shopping in China
Selecting the right brand to suit market profile
Striking a balance between global vs local brand
Same product different positioning based on local preference
Aligning marketing campaigns to target consumers
Modifying formulations to include local ingredients
Halal positioning inspired by religion
Case study: Mauli Teli, founder of IBA Cosmetics, on halal beauty
Ayurvedic takes science-inspired positioning instead of religion
Ayurvedic beauty taps mainstream beauty in the West
Men’s grooming a lucrative segment in multicultural beauty
Customised product development to suit unique physical attributes
Case study: Eryca Freemantle on gaps in colour cosmetics

Competitive Landscape

Local players exert competitive pressure
L ocal players growing in sophistication
Improved business environment supports local players
Better quality supply chains help drive beauty business regionally
Case study: Maliha Mannan , founder Meena Herbal, on local players
Regional players seek global expansion
Global companies set up regional R&D centres
M&As of local players for competitiveness in multicultural beauty
Exotic beauty inspires innovation in the West

Conclusions

Cost benefit balance at the heart of multicultural beauty strategies
Growing global operation adds flexibility to portfolio
Recommendations to drive growth in multicultural beauty