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Color’s Emerging Strategy Urges Trade Up

By: Briony Davies, Euromonitor International
Posted: October 3, 2008, from the May 2006 issue of GCI Magazine.

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Although India is renowned for its use of makeup—Bollywood springs to mind—the size of the market is relatively small, as many Indian women still rely on natural, homemade products. In spite of this, growth in Indian color cosmetics over the last year was the highest in the world, with a 34% increase in sales. In 2005, Coty launched the Lancaster range in India and Estée Lauder followed suit with MAC—indicating that the area is of strategic importance to manufacturers. India has the world’s second largest population behind China, and is poised to see strong growth in disposable incomes over the next five years. Currently, premium launches seem to dominate, but with Hindustan Lever, L’Oréal India and Modi Revlon as the leading players, Coty could do well to concentrate on the mass market and develop a robust strategy for its Rimmel brand.

Makeup Finds Muse

The largest sub-sector within color cosmetics is facial makeup (foundation, concealer and blushers/bronzers/highlighters) with sales of $12.3 billion in 2005. At a global level, it is evolving at only a slightly higher rate than color cosmetics overall, however the possibilities that lie in Latin America and Eastern Europe are attractive. Western Europe, given its status as a developed market, is still displaying strong growth in this area. New product developments—such as a flood of foundations with antiaging properties, including Cover Girl from P & G and Clinique Repairwair from Estée Lauder—will drive the sector forward in mature regions. Numerous launches of foundations that claim to ‘harmonize exactly with the skin tone,’ such as L’Oréal’s Lancôme Color ID Precise Match Weightless Makeup SPF8, illustrate that manufacturers in color cosmetics are attempting to make similarly advanced claims as they do in skin care. The fashion for a sun-kissed glow without exposing the skin to the harmful effects of the sun is also ensuring growth in blushers/bronzers/highlighters in Western Europe. Even the Latin American’s have been influenced by educational campaigns that encourage skin protection at all times—leading to phenomenal growth in blushers/bronzers/highlighters.

Eye Makeup Stays Dynamic

Eye makeup, with 4.8% growth in 2005, is the most dynamic sector in color cosmetics. Double-digit growth is evident in Latin America and Eastern Europe, attributable to economic recovery and rising per capita income. Innovation in Western Europe has enabled the sub-sector to grow faster than the global market; the success of two-step products—as exemplified by the double ended mascaras launched by L’Oréal (Volume Shocking) and Revlon (Fabulash)—indicates that manufacturers have been victorious in convincing consumers to curb convenience for great results. The “masstige” positioning of these products also inject vigor into eye makeup as it allows major players traditionally considered as mass to command more premium prices.

In contrast, eye shadows in Western Europe are rising at a slower rate than the world overall. The lesson that novel ideas combined with careful marketing can re-ignite growth, as demonstrated in mascaras, could be applied to eye shadows; L’Oréal’s HIP range, which takes nanotechnology from skin care into makeup, features an eye shadow palette that is likely to be successful. The eye makeup sub-sector is growing at a particularly low rate in Asia-Pacific. Attempts at revival are being undertaken by companies such as Shisiedo, which has launched high-end products in 12 categories—including vibrant eye colors with light-enhancing components in hopes of recovery in 2006.

Lips Remain Lustrous

As per previous sub-sectors, outstanding performance in Latin America and Eastern Europe has outweighed slowdown in Western Europe and North America to enable lip products to remain the fastest growing sub-sector in color cosmetics in 2005. Although lipsticks take the lion’s share of the sector, with more than three times the sales of glosses, fashion trends for shiny pouty lips are ensuring that glosses gain ground with double the growth of sticks. The largest markets for lip products are the United States, Japan and China. However, China’s per capita spend remains low, indicating that manufacturers can further exploit this market—key to this will be challenging Chinese consumers’ perception of color cosmetics in general.