Research and Markets has
announced the addition of Cosmetics And Fragrances Market Report Plus 2007 to
their offering.
Retail sales of cosmetics
and fragrances, as covered by this report, increased in value by 5.1% between
2005 and 2006, with fragrances showing the stronger growth. Value growth in
the sector of decorative cosmetics was hampered by a slight downturn in sales
of cosmetics other than face make-up, sales of which had increased. Growth in
expenditure on most consumer goods, particularly that on luxury goods, slowed
significantly as recent interest rate rises have taken the base rate to the
highest level in 6 years, amid concerns over inflation. It is anticipated that
value growth in the coming years will be modest since figures from National
Statistics confirm that expenditure on beauty products and treatments is discretionary
and tied in with disposable income; the 10% of households in the lowest gross
income group spend a weekly average of just GBP 3.50 compared with those in
the highest income group who spent an average of GBP 19.40 in 2005/2006.
However, percentage penetration
of cosmetic products and fragrances is high, with a survey undertaken for this
report revealing that 89.7% of women used fragrances and 80.4% use lipsticks.
Younger respondents tend to use products more than older respondents so, ostensibly,
the UK’s ageing population does not bode well for the industry. It is a fact,
nevertheless, that older people maintain a pride in their appearance and frequently
have the disposable income to indulge in premium products. Another demographic
influence on the future of the cosmetics industry is the growth of the minority
ethnic population so companies are increasingly expanding their ranges to suit
different skin textures and colourings. Such personal care manufacturing companies
at the forefront of developing this market include L’Oreal and Avon, and the
diversified multinationals, Unilever and Procter & Gamble.
Although the UK has a trade
deficit in fragrances and cosmetic products, it is one that, in contrast to
previous years, decreased from 2004 to 2005 as the value of exported goods increased
at a faster rate than the value of imported goods. Principal trading partners
are France, Germany, the Republic of Ireland, Italy, Spain and the Netherlands.
According to the European
trade association, COLIPA, the European cosmetics industry consists of around
4,000 manufacturers, mostly small and medium-sized enterprises, which create
employment — directly and indirectly — for more than 350,000 Europeans.
In common with other markets, the European cosmetics and fragrances industry,
on both the manufacturing and retailing sides, has its sights on expansion in
the developing markets of Asia, Eastern Europe and Russia, and South America.
For example, The Body Shop saw comparable store sales in Malaysia and Indonesia
both growing by 17% in its financial year ending 25th February 2006. While Eastern
Europe may still represent a small region for the industry, it is one with great
potential in which to increase sales, particularly in Poland, the Czech Republic,
Hungary and Slovakia.
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