2006 saw the highest growth in the last five years in the global cosmetics and toiletries market, according to the latest research from Euromonitor International, with developing regions such as Latin America and Eastern Europe leading the charge and the fragrances sector making a surprise comeback.
Emerging markets boost global growth
In 2006 cosmetics and toiletries value sales were up 10.7% in both Latin America and Eastern Europe, compared to growth of 3.2 % in Western Europe and just 3% in North America. Key markets in Asia Pacific also performed strongly, with Euromonitor International reporting 10.8% growth in China for example.
Sales of cosmetics and toiletries at a world level grew by a strong 5.5% in 2006, marking a five year high for the industry. While this positive performance was the result of a combination of mega trends, such as a worldwide rise in consumer spending power and increasing consumer interest in health and appearance, it was the rapid development of the cosmetics and toiletries market in emerging regions in 2006 that provided the bedrock for global growth, according to Euromonitor International.
Sales in Asia to equal Western Europe by 2011
Briony Davies, Cosmetics and Toiletries Account Manager at Euromonitor International explains, “The cosmetics and toiletries industry is tapping into rising disposable income levels in developing regions, while at the same time modernising retail and distribution networks and growing consumer product awareness are helping to boost sales even further.
This growth is good news for the industry and looks set to continue over the next five years. Indeed, Euromonitor International forecasts that by 2011 the Asia Pacific cosmetics and toiletries market will all but equal that of Western Europe in value sales, thanks in large part to the phenomenal growth of the Chinese market”.
Fragrances fight back in 2006
In sector terms, fragrances put in a surprise appearance as a top performer in the cosmetics and toiletries market in 2006. The sector stood out as showing particular growth last year, coming in third after sun and baby care with an increase of 7% to reach US$30.7 billion, according to Euromonitor International.
Growth in fragrances has been driven by the revival of the sector in the flagging markets of North America and Western Europe and by rapid growth once again in emerging markets, due in part to direct sellers.
Euromonitor’s Davies concludes, “It has become clear that the fragrances sector presents greater promise than perceived back in 2005. Looking ahead, at Euromonitor we believe bespoke fragrances to cater for local consumers will hold the key to unlocking the latent growth in Asia Pacific, especially in China”.