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New Beauty Opportunities on the Horizon

November 21, 2013 | Contact Author | By: Abby Penning
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In “Underexplored Beauty Segments to Expand Future Revenue Scope,” an analyst insight blog post by Oru Mohiuddin, senior beauty and personal care analyst with Euromonitor International, the market researcher delves into some of the less-explored segments of the beauty markets and making estimates on their potential.

Mohiuddin writes, The beauty industry proved resilient to the economic downturn, achieving a robust 5% CAGR over 2007–2012 according to Euromonitor International, mainly driven by the emerging markets and innovations based on cross-category convergence, which were particularly successful in otherwise volatile Western markets. The beauty and personal care market now, however, seems to be showing signs of a slight slowdown. The first half-year results posted by Unilever, L’Oréal and Colgate showed slower growth in 2013 compared to the same period in 2012. China and Brazil are showing signs of relative fatigue and recovery in Western markets continues to be slow. While it is too early as yet to predict full-year growth rates, leading manufacturers agree that further innovations are needed to sustain existing growth. After vastly exploring innovations based on cross-category convergence, the scope of such opportunities is narrowing. Turning to less explored areas could help to increase the scope of innovation needed to sustain growth in the face of an impending slowdown.

“An area which has traditionally remained underexplored in Western markets is ethnic beauty, primarily because its smaller size has hindered economies of scale. With gradual global expansion, beauty companies are able to leverage their knowledge from regional markets to cater for ethnic consumers in Western countries. In recent times there have been more launches specifically targeting the beauty needs of various ethnic groups. For example, Lancôme Teint Idole Ultra 24H foundation comes in 12 different shades to cater for the various skin tones of different ethnic groups. One of the objectives behind L’Oréal’s acquisition of the Kenyan beauty company Interconsumer Products in 2013 is to access the newly acquired company’s R&D facilities to help develop more targeted products not just for consumers in sub-Saharan Africa but also those of African origin across the world. Hair care in particular offers strong opportunities in both sub-Saharan Africa as well as markets with large communities with African ancestry.

This piece is an excerpt from GCI magazine, Cosmetics & Toiletries' sister publication for beauty business and marketing. Read the full report.

This content is adapted from an article in GCI Magazine. The original version can be found here.