As the beauty industry gears up for another challenging year of economic uncertainty, companies must offer the right mix of quality and value, and look beyond traditional markets. In a recovering global environment, there is scope for upscale targeted solutions, which offer not only technically advanced formulations but increasingly personalised services. At the other end of the scale, a one-size-fits-all approach seems to suit a lifestyle where value-for-money and time-saving are paramount.
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The global beauty industry saw another strong performance in 2012, and industry growth bettered that of the previous year, reaching pre-recession levels with total sales of over US$433 billion globally.
Brazil posted its strongest growth since 2004, registering a staggering 17% gain, close to double 2011’s 9% increase, making it the star of the industry in 2012, but with less optimistic prospects for 2013.
Mass cosmetics continue to dominate sales and represented 75% of value sales in 2012. However, in 49 of the 80 markets, premium sales outperformed mass in 2012, leading to a strong rebound in premium cosmetics globally. Nevertheless, the mass segment still saw faster growth than premium globally.
Continued demand and innovation in skin care helped the category reach the US$100 billion mark in 2012, and it continued to account for over one fifth of total market sales.
Both targeted and multi-functional products are sought after by consumers; however, the need for stressing the primary benefit of a product should remain key in future innovations.
Global beauty sales are projected to grow at an annual average real growth of 3% between 2012-2017, with growth set to be higher in the emerging markets than in the developed markets led by China and Brazil, despite a slowdown expected in both markets. The industry needs to be mindful of relying too heavily on emerging markets to shore up growth and explore niche segments and innovation across developed markets.