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Cosmetic Trends Emerging in BRIC Countries

Posted: October 14, 2009

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Perhaps the biggest dichotomy of all can be found in the department stores channel. The much-aligned stalwart of the American shopping mall has experienced a sharp decline in recent years, even before the economy began to falter. Shifting consumer patterns saw traffic move from the traditional mall to the strip mall and standalone stores, with specialty retailers offering a more intimate shopping experience, especially in the cosmetics and toiletries arena.

Suffering the cost of high overhead and expensive real estate, the number of department stores in the United States and Europe has dwindled steadily—some closing up shop in the United States and others consolidating in Europe. Despite the notorious contraction, the United States is the only market to actually see sales decline in the channel, losing less than 1% of share.

On the other side of the globe, however, department stores are blossoming, with shoppers in India and China discovering this decidedly Western concept. Economic expansion in both countries has spurred new interest in shopping center developments anchored by major department store retailers. With more than 5,000 doors in China and 150 in India, the channel has become synonymous with the shopping “experience.” Department store sales of cosmetics and toiletries are up by 21.3% in India, albeit from a small base, and just over 19% in China, the third largest market in the channel. Clearly, all is not lost for department store brands on a global scale.

Market hot spots

The Chinese market stands out as the hands-down global growth leader for cosmetics and toiletries sales, with double-digit gains in every channel. However, key hot spots exist in each of the top 11 markets examined in this report. Double-digit growth in every channel in Brazil also provides new opportunities for marketers, even in the absence of an established department store channel. Food outlets command a strong presence here, particularly in rural areas where there are few other options for consumers.