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Annual State of the Cosmetics and Toiletries Industry
By: Alexander Kirillov
Posted: June 18, 2008
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In 2007, the Chinese market for cosmetics and toiletries grew 9% in constant prices, on par with Brazil. The booming economy along with the upcoming Olympic Games and emerging middle class stimulated growth in the country, where per capita consumption still remains only 10% of that in Brazil. The Indian market, where per capita spending in constant terms on cosmetics and toiletries is only one-third of China’s, showed more modest results at 5% growth. However, the trend is looking upward from 2% growth rates only three to four years ago.
As the U.S. economy faces increasingly gloomy prospects, the cosmetics and toiletries market shows strong signs of contraction, with virtually no growth in real terms in 2007 and a disappointing outlook. According to Euromonitor’s forecast, the U.S. market will decline 2007–2012 by almost $1 billion—as calculated in 2007 prices—or 0.4% a year on average. Fragrances will be the sector hardest hit by the economic downturn, as cash-strapped consumers turn away from items they consider superfluous. With premium fragrances seemingly available everywhere, perfumes’ mystique has disappeared for Americans. Premium cosmetics as a whole will shed $410 million in the next five years, as consumers switch from expensive prestige brands to less expensive analogues.
The global skin care market reached $65 billion in 2007, growing by 7%—the same growth rate as in 2006. Global skin care manufacturers have introduced a wide range of innovative products, especially in the antiaging segment, capitalizing on consumers’ fears of looking old and the emergence of such new science advances as nanotechnology.