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Cosmetic Trends Emerging in BRIC Countries
Posted: October 14, 2009
Despite the global recession, the cosmetics and toiletries market posted a respectable 3.9% growth in sales in 2008, affirming that consumers will keep up their personal grooming and beauty habits no matter how dire the financial outlook may seem.
But perhaps more important than the overall growth, the latest numbers indicate a significant shift in where consumers are shopping in nearly all of the major markets around the world. Channels that are posting declines in one market are experiencing growth in another. Marketers looking to compete on a global scale must stay ahead of the shift and examine local trends in retail patterns in order to compete in this complex market.
While the United States remains the dominant nation in the global beauty retailing equation with an 18.4% share, the emerging markets of the BRIC countries—Brazil, Russia, India and China—continue to gain momentum posting double-digit gains, according to Kline's Beauty Retailing 2008 – Global Series. As these markets develop, consumers there are discovering the emergence of traditionally more Western retail formats. This delicate balance among distribution channels has enabled the industry to weather the economic storm fairly well, while other consumer goods markets have suffered worse.
Direct sales driven by earnings potential
As the fastest growing channel worldwide, direct marketing posted an impressive 8.6% compound annual growth rate from 2003 to 2008. The current economic situation has made person-to-person sales an attractive earnings opportunity to help offset job losses. This, combined with the strong presence of the channel, has driven direct sales up by nearly 27% in China during the last five years. In Russia and Brazil, where direct marketing is still considered the primary purchase channel for high-quality cosmetics, sales have increased almost 20%, prompting leading marketers like Avon and Oriflame to launch their pricier skin care products into these markets.