- Accounting for one-fifth of global beauty and personal care value, skin care remains the leading category.
- In Asia-Pacific, where sales are more than double those in Western Europe, the predisposition toward multi-step skin care regimes has served the category well.
- China’s strong momentum is expected to add a further $7 billion to the global skin care market by 2017.
- Indonesia, India and Thailand are quickly gaining status as the next skin care markets to watch.
- While the multifunctional trend is not expected to fade anytime soon, targeted solutions will continue to push unit prices upward.
- Increased availability of devices has raised consumer awareness of these products, and recent launches indicate the device segment is moving toward anti-aging and more salon-style treatments.
- Anti-aging, the fastest growing category in skin care over the last five years, is showing signs of stagnation.
- Anti-aging claims, however, are being made in other categories, and with the median age of the female population nearing 40 and rising in North key markets, anti-aging is expected to only strengthen its presence within other categories.
With sales of nearly $100 billion in 2012, equating to one-fifth of global beauty and personal care value, skin care’s dominance remains unbreakable. But the category’s prevalent trends currently play on opposite sides of the spectrum. On the one hand, an increasing focus on status and individuality is driving a greater need for products, services and experiences tailored to the individual. On the other, a one-size-fits-all approach has triggered demand for more convenient and quick-fix solutions. How are these conflicting trends affecting the market, and how will the future shape up for skin care?
Asia—The Knight in Shining Armor
While the main focus for skin care players remains the golden three (China, Japan and South Korea), with the latter expected to displace Germany in 2014 as the world’s fifth biggest market, Indonesia, India and Thailand are quickly gaining status as the next skin care markets to watch. Over 20% year-on-year increases in value and estimated combined added value of $2.5 billion, or around 15% of anticipated global value to 2017, have put these regions in the spotlight. As increasing urbanization and a vibrant rising middle class drive a switch from unbranded to branded goods, many of the large players are expanding their presence and investing heavily in these markets despite the presence of powerful local brands.
Premium Skin Care Boosted by Specialization
With a multitude of new product launches every year, an increasing focus on catering to the individual and providing a more exclusive and unique experience is gaining momentum. This has materialized in more targeted solutions, which have emerged in many different forms. These vary from the type of product, like a serum, a device or a service (offerings that target specific problems such as fighting hyperpigmentation or minimizing pores) to application formats—oils, roll-ons and measured doses, and age-segmented products, as examples. Specific examples include recent launches for the over 50s from Mary Kay, Shiseido and L’Oréal Paris.
Looking beyond devices, the next generation of targeted solutions will gradually start to shift to beauty services in the form of personalized or bespoke formulations that target the specific needs and concerns of consumers. Examples of this are already on the market, such as the Ioma Beauty Diag machine, which, after taking a series of pictures, analyzes the skin and offers a tailored recommendation from over 800 possible skin care formulations. The Organic Pharmacy’s DNA skin care test is another example, analyzing a saliva sample to offer a personalized skin care prescription.
Anti-aging Starts to Feel the Heat
Anti-aging, the fastest growing category in skin care over the last five years, is showing signs of stagnation, growing by 7% globally in 2012—the same growth rate as in 2011. One of the primary reasons for this is the rise of multifunctional products across all beauty and personal care categories. From hair care to color cosmetics, the majority of new products are including anti-aging claims, showcasing how the anti-aging label has become a must-have on new products’ list of multiple attributes.
BB and CC creams are a type of new product that epitomizes the trend of multifunctionality. The influence of the younger female consumer, who has been the focus for beauty companies (especially in Western Europe and North America), has helped foster the BB cream craze. In addition, BB creams also provide a lower entry price point for premium brands, as they are less expensive than anti-agers—which is only one of the BB/CC claims along with coverage and sun protection. With the “value for money” mentality still strong and the media buzz surrounding these products elevating them to cult status, the other facial makeup category, within which BB/CC creams are included, registered a 30% increase in 2012 in the U.S. alone, helping facial makeup to outperform facial care globally.
Furthermore, anti-aging claims continue to be the hot ticket in terms of extra benefits, even within skin care, with both body care and hand care adding anti-aging claims to their new product launches. With the median age of the female population nearing 40 and rising in North America, Australasia, and Western and Eastern Europe, anti-aging is expected to only strengthen its presence within other categories. For example, both body care and hand care have seen the release of products with anti-aging claims—with specific examples including Collistar’s body BB cream, Vaseline’s Healthy White Perfect 10 in 1 Body Lotion, and Korres’ Almond Oil and Vitamin C Anti-Ageing and Anti-Spot Hand Cream with SPF15.
The Future Remains Skin Deep
As the direction of the anti-aging category changes from its traditional focus on reducing lines to encompassing skin enhancements—such as evening out skin tone, fighting hyperpigmentation and reducing sun damage, among other things—the marketplace is welcoming a new generation of products that are both multifunctional and targeted. For example, AR Advanced Retinol Night Treatment, a recent launch from StriVectin, is being touted as the company’s first multi-tasking product, as it claims to combat dullness, aging, dark spots and firmness, among other things. At the same time, it is targeted at night-time usage, showcasing how one product can play to both spectrums and indicating that despite the popularity of multifunctionality, a direction in the form of specialization is still important as consumers look for indicators as to which product is most suitable for them.
While this multifunctional trend is not expected to fade anytime soon, targeted solutions will continue to push unit prices upward, and skin care’s dominance in overall beauty will remain unquestionable. As more segments—from color cosmetics and hair care to deodorants—look at skin care for inspiration as well as align claims with skin care, blurring the lines between these categories, some cannibalization is inevitable. However, skin care, with its supremacy in Asia-Pacific and increasing penetration in Latin America, is expected to increase the gap on hair care by a further $5 billion by 2017.
Nicole Tyrimou is a Euromonitor International beauty and personal care analyst.