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The professional skin care products market experienced a second year of growth, posting a 5.3% increase in 2011, according toProfessional Skin Care Global Series: Market Analysis and Opportunities by Kline & Company. While the overall tendency suggests a continued recovery of the market following the onset of the recession, subtle trends behind the figures paint a more undecided picture.
China and South Korea posted stellar growth of 9.3% and 9.5%, respectively, within the professional sector. As a result of a regulatory change in South Korea, which drove investment in beauty institutes, and greater consumer spending, the market, which was penetrated by domestic brands, such as Dr. G, CNP, and Dr. Oracle, recovered rapidly from the recession. “What’s interesting to note,” observes Karen Doskow, Kline’s industry manager, “is that professional products in South Korea are sold comparable to the U.S. market through the Internet and home shopping channels, where especially local brands actively develop e-commerce by operating their own online shopping websites, as well as entering larger platforms run by Internet home shopping channels, such as G Market and GS Home Shopping.” The channel posts nearly 18% growth in 2011.
With 4% growth in 2011, sales for the European market came close to pre-recession peak levels as consumers return to professional venues for skin care treatments. Despite this resurgence, consumers continued to cautiously spend on their post-treatment purchases and remain highly value-conscious.
Sales through beauty institutes and salons, the largest purchase channel in Europe representing almost 60% of the market, increased by 3.7% in 2011. However, the strongest growth was experienced in the medical care providers channel in both Europe and the United States.
Spas, salons and medical care providers are stimulating traffic by modernizing facilities and implementing new communication tools, such as social networking, and tablet devices that enable therapists to complete medical questionnaires or recommend products without interrupting the treatment. The increase in the number of locations through franchised networks or chains, particularly in Europe, and increasing skin care product distribution through other professional-type outlets, such as hair salons or medical care providers, is also successfully increasing revenues.
Sales within the largest channel in the United States—spas and salons—declined as spas continued to reduce the number of brands carried, underperforming spas are closed down, and more salons and hotels are divesting their spa business to refocus on core businesses. Another factor, a surge in at-home beauty devices, has reportedly impeded business in the spas channel.
The European market is highly fragmented with leading brands, Guinot, followed by Clarins, enjoying strong growth. The U.S. market is relatively consolidated, with the top five brands accounting for a 38% market share. Brands entrenched in the medical care providers channel, such as SkinCeuticals and SkinMedica in the United States and Dermaceutic and Pangaea Laboratories’ Medik8 in Europe, posted the strongest gains in 2011.
Industry executives participating in this research expressed particular concern with finding the correct balance of distribution between purchase channels in addition to growing commercial pressures between manufacturers, distributors and professional outlets. Another concern consists of developing attractive pricing solutions for both retail and treatment products for price sensitive consumers.