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Annual State of the Cosmetics and Toiletries Industry

By: Alexander Kirillov
Posted: June 18, 2008

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BRIC Leads Growth of Global Market

Emerging markets remain the power engine of the global beauty market. Accounting for only a third of the global market of cosmetics and toiletries, they added more than $10 billion or two-thirds of absolute growth in 2007—with BRIC countries responsible for over 70% of this gain. Euromonitor does not expect the pace of growth to slow in the next few years, and, according to Euromonitor’s forecast, Brazil and China will gain almost $10 billion each by 2012, topping the list of the markets with the highest absolute growth. While India and Russia are expected to show more modest results, they still remain among the top five on the list. The only developed market on the list is Japan, mostly due to its sheer size rather than high growth rate.

Strong growth in Brazil was driven by steady economic expansion in the country, and the cosmetics and toiletries market benefited from this, expanding 22% in 2007 and reaching $22.3 billion in retail prices. Substantial contributions to these results came from successful governmental efforts to combat poverty through social programs as well as the favorable effect of U.S. dollar devaluation as local manufacturers took advantage of a cheaper greenback to invest in new technologies and modern machinery.

Russian market growth will remain robust in the forecast period. The market, driven by premiumization, expansion of retail channels, rising disposable income and strong consumer confidence will continue growing at 4% in real terms, reaching $12 billion in 2012, up from the current $9.9 billion. Contributing to this, Russian consumers are increasingly open to natural and organic cosmetics, with both domestic and international players getting involved in the trend.

Due to increased spending power, consumers in Russia are becoming more sophisticated and particularly focused on natural and ethically sourced ingredients. The trend for natural cosmetics in Russia is driven by consumer awareness of the potential hazards of the chemicals used in cosmetics and a conscious effort to avoid them. This is combined with a genuine awareness of the importance of protecting the environment from which the ingredient is sourced.