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BRIC: Continued Domination of Global Beauty Sales
By: Carrie Lennard, Euromonitor International
Posted: July 13, 2011, from the July 2011 issue of GCI Magazine.
page 2 of 3Of all the BRICs, Russia was most impacted by the economic downturn, with value growth slipping down from 12% in 2008 to 5% in 2009. The country suffered a particularly big drop in premium beauty sales, but there was a return to more buoyant consumer spending on the category in 2010, with growth moving back up to 9%. Sales of nonessential products such as anti-agers and fragrances returned close to former levels of consumption in 2010. Premium beauty value growth also leapt up to 12%, up from just 0.5% in 2009.The return to form was driven by a far stronger economic performance, resulting in higher consumer confidence.
Direct sellers remain the second largest distribution channel for beauty and personal care in Russia (beauty specialist retailers hold the top spot), however, the development of chain retailers remains the key threat to further growth in direct selling.
India Attracts Big Beauty Players
Beauty and personal care in India is forecast to enjoy healthy growth of 14% in 2010, unchanged from the previous year. Rising affluence and greater consciousness of personal image are driving growth in both rural and urban areas. While discretionary products such as color cosmetics and fragrances remain mostly an urban phenomenon, basic necessities such as bath and shower and oral care are seeing strong growth increasingly driven by rural rather than urban consumers.
As a result of its consistently high growth, India has attracted a number of multinational beauty companies to focus on expansion there. In most cases, their target is urban areas—exemplified by L’Oréal India launching the first Kiehl’s stand-alone store in New Delhi in 2011. Others, such as direct seller Mary Kay, targeted India’s rural consumers, who still comprise roughly 70% of the total population.
China Goes From Strength to Strength
Having dipped very slightly in value growth in 2009 to 10% (down from 12% the previous year), China saw its beauty industry expand by 12% in 2010. Deodorants, skin care and sun care products all saw growth in 2010, but skin care remained the flagship category in China, driving overall market growth.