Shipping in Green

Brands Find Ethnic Beauty Space Worth Development

October 21st, 2013
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Oru_MohiuddinAnalyst Insight by Oru Mohiuddin – Senior Analyst, Beauty and Personal Care

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Mainstream brands such as Estée Lauder and Lancôme are broadening
their scope to cater to ethnic consumers, demonstrating that ethnic
beauty is an area that manufacturers are increasingly turning their
attention to for future growth. Yves Saint Laurent has launched Le Teint
Touche Éclat foundation in 22 different shades, while Lancôme’s Teint
Idole Ultra 24H foundations come in 18 different shades to cater for a
wider group of ethnic consumers with different skin tones. Ethnic beauty
remains an unexplored area and a source of future growth, although it
is too early to speculate how it will actually perform going forward.
There are, however, strong indications to suggest that ethnic beauty is
poised for a boom.

Rise in Ethnic Shoppers Makes Ethnic Beauty Feasible

Increasing numbers of ethnic shoppers have made ethnic beauty
commercially viable. For example, approximately 15% of the overall
population in England and Wales are non-white, up from approximately 8%
in 2001, according to the 2012 census. In addition, the number of ethnic
tourists in Western markets has been on the rise. For example, the
number of tourists travelling from China to the US rose from 400,000 to
1,600,000, while the number of tourists from Brazil to the US rose from
640,000 to 1,800,000 between 2007 and 2012, representing a respective
increase of 300% and 180%. One of the charms of such trips includes
buying Western brands. Thus, offerings catering to ethnic consumers
reach beyond ethnic residents in a given Western market to also include
ethnic shopping tourists. Furthermore, trends in ethnic beauty could
also be used to inspire offerings designed for mainstream consumers
. For
example, the currently popular skin brightening concept has been
adopted from Asian markets. This further adds to the scope of
profitability for ethnic beauty.

Ethnic Beauty Worth R&D Investment

Manufacturers now feel it worth investing in R&D to cater for
ethnic needs as part of their more targeted beauty offerings to help
drive growth in a challenging market. Ethnic products require more
complex formulation than regular ones, necessitating greater investment
in R&D. Foundation for white skin requires a maximum of three
different shades, whereas ethnic skin requires a greater number of
shades. In addition, texture needs to be carefully engineered as
products can be chalkier on ethnic skin. The issue of ethnicity is made
more complex by the fact that there is a wide variety of skin tones and
hair types among ethnic consumers. For example, Yves Saint Laurent’s Le
Teint Touche Éclat foundation was launched after nine years of research
into over 7,000 global skin tones to create the perfect 22 shades to
reflect the full range of skin tones from around the world.

Ethnic Beauty a Wider Space to Play In

Currently, ethnic beauty is dominated by larger manufacturers, given
the resources required to develop ethnic products. However, there is
also scope for relatively smaller manufacturers such as Elizabeth Arden
and Revlon to target ethnic consumers. Instead of focusing on a wide
range of ethnic groups, which requires more investment in R&D,
smaller manufacturers could target more specific ethnic groups, for
example by focusing on foundation for women of Indian origin, but making
the products available across a wide number of relevant regional
markets so that the scale makes it commercially viable. Products
catering for ethnic beauty have been mostly seen in skin care, colour
cosmetics, fragrances and hair care, but it could also be worth
considering their potential in other areas such as deodorants. Ethnic
beauty overall is largely an untapped area with ample scope for growth,
and as manufacturers gradually wake up to its immense potential, a
significant shake-up can be expected.

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