New study underlines promise of ethnic market

By Guy Montague-Jones

- Last updated on GMT

The ethnic beauty market is tipped as a source of growth in sluggish times as the market widens beyond products geared towards African Americans, according to Packaged Facts.

Market extends its scope

The soon to be published report on the Ethnic beauty market in the US from the market research firm said marketers are extending their reach to a broader stretch of ethic groups including Hispanics, Asians, Arabs and Native Americans.

Packaged Facts said conservative estimates point to growth for 2008 of almost 7 percent in the US retail market for ethnic-specific hair care, make-up and skin care products. The market is forecast to finish the year with sales of nearly $2.6 billion.

This figure is expected to increase significantly in the coming years and top $3.3bn by 2012.

Drivers of market growth

Two sources of growth were identified by Packaged Facts. Firstly, on the demand side the growing ethnic population in the US increases the raw potential of the market and secondly, from the supply side more companies are releasing products designed to cater for the specific beauty needs and desires of different ethic groups.

Once a market reaches a critical mass, it begins to attract serious attention from marketers and more sophisticated and better designed products start appearing, stimulating more sales growth.

In the case of ethnic cosmetics, companies are beginning to respond to the growing popularity of natural and organic products.

Tatjana Meerman, publisher of Packaged Facts, said: “Traditionally, marketers active in Health, Beauty and Cosmetic (HBC) products have sold some of the most chemically harsh items available, but today manufacturers are taking simple yet significant steps by adding a degree of natural or organic content to their products.

“This appeals to U.S. minorities who are widely regarded to favor not only gentler and safer HBC products, but greener ones as well.”

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