Skin care and emerging markets aids growth over last decade

By Andrew McDougall

- Last updated on GMT

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Skin care and emerging markets aids growth over last decade
As we approach the first ever virtual conference in the cosmetics industry, skin care is reported to be one of the fastest growing categories in personal care over the last ten years, acting as the catalyst for many cosmetics companies.

According to a report from market researchers Sanford C. Bernstein the organic growth of the top 12 companies between 2001-2010 was 5.3 per cent, consistent with Euromonitor data indicating growth of the market was 5.1 per cent.

Natura was the fastest growing company, posting growth of 21.9 per cent, which Bernstein attributes to its small size and the fast growing market in Brazil.

Emerging market exposure

Elsewhere, Avon posted 6.8 per cent growth during this period thanks to its emerging markets exposure.

Johnson & Johnson, who also posted 6.8 per cent growth, and Beiersdorf, 6.1 per cent growth, both benefitted from the fast growing skin care category with the latter also benefitting from a foray into hair care and make-up.

However, on the other end of the scale, Bernstein attributed over-exposure to a lacklustre Japanese economy and inability to expand too far beyond that - major factors that affected Kao and Shiseido, who only posted growth of 1.8 and 1.7 per cent respectively.

L’Oreal and Procter & Gamble saw their growth decelerate as the competition strengthened, with growth figures dropping below average: 4.1 per cent for the French firm, whilst 3.3 per cent for the Ohio-based consumer goods giant.

Colgate Palmolive, Unilever and Henkel all saw their growth accelerate over time, and slowly began to outpace the top two players.

Recession lead to tough times

The global recession was tough for the beauty market bringing 2009 growth down to 2.1 per cent, with Estee Lauder, L’Oréal, Kao and Shiseido seeing negative growth.

Given the slight economic recovery, 2010 growth recovered to 4.7 per cent and Bernstein expects a further recovery to 5.2 per cent in 2011.

Over the 3 years 2009 - 2011, which includes the recession and aftermath, it notes that the strongest and most resilient companies have been Natura again, Estee Lauder Unilever and Colgate.

Whilst Bernstein predicts a different growth picture for each company in the coming years, it has highlighted that the emerging market exposure will play a big part in future growth.

Analysis of these markets is just one of the topics being discussed at this year’s SkinCare Ingredients 2011, the first industry virtual conference, which takes place tomorrow, 15 June.

Virginia Lee from Euromonitor will be discussing skin care in relation to the BRIC markets as part of the comprehensive programme.

For more information to this free-access event, and to register, please click here

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