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Beauty and Personal Care during Economic Recovery
2009 was a tough year for the beauty industry, says Carrie Lenard, beauty and personal care industry analyst at Euromonitor International. However, some categories of the beauty and personal care industry have weathered the recession better than others. Such categories include:
- oral care
- hair care
Necessity products as a whole tended to fare better during the economic downturn, with discretionary categories taking a larger hit. Examples of these categories are:
- fragrances
- colour cosmetics
Men’s grooming, deodorants and skin care are projected to grow until at least 2014, with all three categories expected to see higher growth rates than the industry as a whole. Skin care has been a popular category for companies to enter, as well as deodorants. Beiersdorf and Proctor & Gamble have recently both launched new deodorant brands. Men’s grooming has been a category that has seen a recent push in products. Unilever recently launched several new products under the Dove brand name into the men’s grooming sector.
There are untapped opportunities in beauty and personal care as well. Regionally, emerging markets have been responsible for growth and will continue to do so. These regions include:
- Latin America
- Asia Pacific
- Brazi
- Russia
- India
- China
In response to this growth, manufacturers are targeting these markets. Sephora, for example, has entered the Brazilian market by acquiring Sack’s, an online retailer of premium beauty and personal care products. Mary Kay has recently tapped into the Indian market with a focus on rural direct selling.
For the long term, Lennard states that the following countries will be interesting for to watch:
- Thailand
- Mexico
- Indonesia
- South Korea
Lennard points to these countries as they have:
- Rising disposable incomes
- Emerging middle classes
- More discretionary income
All of these properties mean these countries will have more to spend on beauty on personal care, and manufactures are responding to these factors. L’Oreal has recently announced that it wants to double the amount of consumers it has worldwide over the next 10 years. To do this, it’s opening subsidiaries in emerging markets. The Body Shop is also opening stores in emerging markets.