- Consumer trade down to less-expensive brands and cutbacks on non-essentials were among the main reasons for reduced growth in Russian beauty.
- Though the Chinese per capita spend on beauty products will still be just $22 per person per annum in 2014, far lower than the predicted $175 per person in Brazil, there is still clear potential for China to become the largest beauty market in the world.
- With 14% compound annual growth 2004–2009, the Brazilian beauty industry is one of the fastest growing in the world.
- The Indian beauty market is still very much focused on basic hygiene products.
Growth opportunities in BRIC (Brazil, Russia, India and China) countries were identified long ago. For the beauty industry, this meant a shift in focus away from the traditional, maturing markets (predominantly those in North America and Western Europe) and a chance to reach a vast and mostly untapped consumer pool. BRIC countries are characterized by rapid urbanization, large populations with low beauty product usage and emerging middle classes. These countries have come to the fore as world economic hot spots, and are acting as prime contributors to dynamism in the global beauty products industry. With the exception of Russia, BRIC has far outgrown the 4% global growth in beauty 2008–2009, according to market research firm Euromonitor International.
Russia Hit Hard by Recession
Booming China Holds Even More Growth Potential
Sales in both Brazil and India are comprised almost exclusively of mass brands, so trade down has been far less of a possibility. China’s growth in premium beauty products is a more recent development. Its economy was able to withstand the effects of the recession, meaning consumers’ demand for prestige cosmetics was only slightly dampened 2008–2009 (13% value growth) compared to the previous year period (16%).
Brazil Focuses on Mass Brands and Scents
According to Euromonitor statistics, with 14% compound annual growth 2004–2009, the Brazilian beauty industry is one of the fastest growing in the world. In 2009, its value sales stood at $28 billion, making it the third largest beauty market. Fragrances registered an excellent performance in 2009, with current value growth of 17%—a trend that is set to continue and will make fragrances one of the fastest-growing categories in the Brazilian beauty market. Deodorants are often used as a more affordable substitute for fragrances by lower-income consumers, and this meant, despite only accounting for 10% of total value sales in 2009, the Brazilian deodorants sector is the biggest in the world.
India Begins to Build on the Basics
Outlook: BRIC to Drive Global Beauty Growth
According to Euromonitor International, BRIC holds additional major opportunities for international beauty brands, as these countries add a combined $22 billion in absolute growth. As BRIC attracts greater involvement from multinational companies, this will help to expand penetration rates and lift value sales through the introduction of sophisticated and premium beauty products, meaning these countries will continue to be instrumental in future growth in beauty.
Carrie Lennard is a research analyst at Euromonitor International.