Functionality Drives Growth of Color Cosmetics

The color cosmetics category has a lot to answer for. It is the precursor of multi-tasking brands in the beauty industry, notably BB creams, and now everyone is at it. So much so that beauty conscious consumers—especially in Western markets—increasingly expect a single product to perform multiple functions. It has raised the bar on product innovation, but it is squeezing the overall value of the market. Skin care is one of the most visibly affected categories. Anti-aging, toning, moisturizing, sunscreen—these features and more are as common in color cosmetics as they are in skin care, and the cross-category competition is taking its toll. For color cosmetics, functionality and fashion are two big drivers for 2015.

In the key North American market, the color category’s retail value growth was approximately 2.5% in 2014—the slowest rate in four years. However, consumers globally are spending a little over $1 billion a week on the category, and there are a number of markets showing enormous promise. Beyond the BRIC nations, some of the fastest-growing markets include Saudi Arabia, Thailand, Indonesia, Turkey, Chile and Colombia (based on the latest 2014 projections from Euromonitor International). And a common thread among them is a burgeoning appetite for prestige beauty products, most of which used to be out of reach (either financially or logistically).

Globally, nail polish was a key growth segment in 2013, with retail sales climbing 9% at fixed U.S. dollar prices (compared with lipstick’s 6% and mascara’s 5%). Nail polish appears to again be on course to outperform lipstick, according to Euromonitor International’s provisional 2014 data, and the U.S. is the world’s biggest nail polish market, with annual sales now in excess of $1 billion.

The greater the functionality “muscles” that brands flex, the more consumers will grow to expect them as the norm. Manufacturers need to be mindful of category cannibalization, however, and it is hard to see how multifunctionality will not put a brake on growth rates in affected categories, even as external market conditions improve. Yet, the prediction is that 2015 will be an innovation-packed year.

Editor’s note: To read this full market report, see the January/February 2015 issue of GCI magazine or visit

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