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The Future Bright for Color Cosmetics Despite Economic Gloom

By: Rob Walker, Euromonitor International
Posted: April 2, 2012, from the April 2012 issue of GCI Magazine.

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Brazil, in particular, has been a powerful growth engine over the past five years, fueled by its burgeoning middle class and the development of new consumption bases in the fast-growing regional economies of the northeast. However, Brazil is going through a tougher economic period, with GDP stagnating in the third quarter of 2011.

Brazil’s beauty-conscious middle class will continue to drive global incremental value in color cosmetics in 2012, but the slowing of the economy is a signal that companies should not become overdependent on the BRICs for their revenue growth. China’s economy is also slowing, albeit only marginally.

Going forward, the color cosmetics category ought to be looking at building stronger positions in a raft of fast-growing second-tier emerging markets. The problem is that some of the most attractive growth markets are also some of the riskiest in terms of new investment.

Over the 2011–2015 period, Iran, for example, is forecast by Euromonitor International to be the fifth biggest growth market in the world for color cosmetics, based on incremental value.

The operating environment in Iran is enormously difficult, but brand owners would be wise to look at the long-term picture. Currently, there is widespread penetration of adulterated or smuggled color cosmetics, which enter the country primarily from Turkey. The long-term opportunity is to drive a dynamic formal retail market.

Regulations, Stability, Color Aesthetics, and Economics.

Coloring the Cosmetic World: Using Pigments in Decorative Cosmetic Formulations covers the four dimensions to selecting colors for cosmetics. Take note of the chapter on color stability which describes the various colorants you will use in your product and includes a chart listing compatibility of colorants with a number of solvents. Photos rendered in full masstone color!

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