Cosmetics ingredient market driven by emerging markets


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Related tags Compound annual growth rate

The importance of emerging markets has never been greater after it was revealed that they are driving the global beauty ingredients sector.

According to analyst Companies & Markets, the global beauty ingredients market generated approximately $21 billion of incremental retail value in 2011, of which the emerging markets fuelled a whopping 81 percent.

The global beauty industry is shaped by many trends and influences, and right now; according to the report, science and nature are the two the most significant.

Rapid growth

Companies & Markets states that of the 12 ingredient categories covered in the global beauty ingredients market, usage totaled 3.7 million tons in 2011, with growth forecast at a compound annual growth rate (CAGR) of 3 percent through to 2016.

“As global economies flourish, and as new and exciting products are introduced based on unique ingredient technologies, the beauty ingredients market will continue its rapid growth. As the industry grows, the need for smart, capable people grows as well,”​ says the report.

One of the most important issues for both ingredient suppliers and their customers is still environmental sustainability; however, there is also more focus on commercial sustainability, as the global economy remains weak.

As ingredients used in beauty and personal care products are strictly controlled, it makes it difficult to get a new ingredient to market. This is also constrained by variations in regulation from country to country.

Industry shift

From a manufacturer’s perspective, global cosmetic firms have been turning to emerging markets in the hunt for sales, but they face a challenge tailoring their beauty products to suit new customers in these markets.

Euromonitor forecasts global growth worth $64 billion within five years, including $26 billion in the Asia-Pacific region and $22 billion in Latin America.

L'Oréal is just one of the manufacturers that has set up research centres and factories in countries such as India, Mexico and Indonesia and is adapting its marketing and sales strategies to local consumer habits.


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