Tuesday February 24, 2015, Euromonitor spoke at in-cosmetics online conference. This presentation focused on the global market and consumer demands for multi-functional products in suncare and skincare. It was presented by Oru Mohiuddin and Nicole Tyrimou, respectively Senior Analyst and Analyst in Beauty and Personal Care Research at Euromonitor International.
Watch the recorded presentation here: https://www.brighttalk.com/webcast/9633/144695
Blurring the Lines in Beauty: Global Market and Consumer Demands for Multi-Functional Products in Sun Care and Skincare
1. BLURRING THE LINES IN BEAUTY:
GLOBAL MARKET AND CONSUMER DEMANDS FOR MULTI-
FUNCTIONAL PRODUCTS IN SUN CARE AND SKINCARE
IN-COSMETICS 2015 ONLINE CONFERENCE
ORU MOHIUDDIN, SENIOR BEAUTY AND PERSONAL CARE ANALYST
NICOLE TYRIMOU, BEAUTY AND PERSONAL CARE ANALYST
22. THANK YOU FOR LISTENING
Oru Mohiuddin, Senior Beauty and Personal Care Analyst
Oru.mohiuddin@euromonitor.com
Nicole Tyrimou, Beauty and Personal Care Analyst
Nicole.tyrimou@euromonitor.com
For Press Enquiries, please contact:
Chourouk Gorrab, Communications Executive
Chourouk.gorrab@euromonitor.com
Editor's Notes
Beauty products as we have known them seem to be taking on a whole new identity, as manufacturers borrow technologies and concepts from other categories to add value and offer greater efficacy, as well as to find potential white space. To this end, skin care has been increasingly adopting sun care attributes, while sun care is retorting back by looking to invade skin care opportunities. The overlap between skin care and sun care, however, only forms part of the story, as skin care is now flirting with colour cosmetics, with claims that it can blur blemishes and imperfections within seconds, while colour cosmetics is taking on skin care, with offers to address lines and various other signs of ageing. Similarly, sun care is also demonstrating its ambitions in categories beyond skin care including colour cosmetics and hair care. We are, no doubt, on the verge of a revolution in the beauty industry as categories now seem to be taking on a whole new dimension, while a few others are finding it increasingly difficult to survive. The questions are what will the new generation of beauty products look like and at whose expense will they survive.
Just like with total beauty, emerging markets have increased their share in sun protection exponentially from 30% of the total sun protection market to nearly half by 2018. This has been instrumental in keeping sun care’s global growth positive as sun care in mature markets has not been growing at its previous pace. This has been partly due to economic constrains in southern European markets which have seen the rise of private label and the decline in value of the overall market.
However, the most influential reason has been cross category convergence. The addition of sun protection as an extra benefit in many skin care and colour cosmetics products has caused a slowdown in sun care’s growth in Western Europe(in conjunction with Southern Europe’s economic slowdown) and a decline in North America.
As consumers are more accustomed to using skin care and colour cosmetics on daily basis, those products have been preferred cannibalising sun protection sales and pushing them to a special occasions product (holiday, beach day, sports day etc. where there is excessive sun exposure. While sun care players have responded by adding skin care and colour benefits in their offerings too, the prevailing trend has been towards using all-in-one skin care and colour cosmetics offerings as exemplified by BB creams which were introduced in Western Europe in 2012 and exploded in popularity ever since.
While there scope for both trends it remains to be seen how these opposing trends will play out in the future.
We can see there is both opportunities and challenges for both
While multi-
Sun protection remains the largest category in sun care, with nearly 90% of total sun care by 2018.
Strong push by governments to raise awareness around the world about the harmful effects of sun damage have helped sun protection to be seen as a necessity by many consumers. However, aftersun and self-tanning have failed to create a necessity value for consumers.
In the case of aftersun, strong competition comes from body care with many consumers choosing to just use a body cream/lotion rather than add an additional step to their routine. Furthermore, as aftersun products are for use after extensive sun exposure they are usually restrained to holidays and after-beach/outdoor occasions.
Self-tanning has had a fair share of bad press due to problems with its formulations, the orange tint and smell have discouraged many consumers. Furthermore the category is struggling to break through in Asia Pacific where traditionally there is a preference for fair skin and thus no use for self-tanning products.
Legislation
One of the biggest influencers in the sun care industry has been legislation.
From a cap of SPF claims in the US in 2013, to PA labelling laws in Japan and Australia’s recent ban on sun bed use, regulation plays a key role for the sun care industry.
Awareness
Awareness levels on the health implication of unprotected sun exposure remain relatively low even in mature markets. Despite government efforts some consumers are yet to take warnings on excessive sun protection seriously
Availability
Furthermore, in emerging markets like MEA where the weather is favourable to sun care players, beyond awareness there is also a lack of or limited availability of sun protection products. This limits opportunities for sun care players
Affordability
In many emerging markets sun protection offerings remain unaffordable by the average population. Pricing has been a key issue in Southern Europe too where private label sun protection has been growing in popularity.
Cross- category convergence
The introduction of sun protection as a key benefit in many skin care and colour cosmetics products has cannibalised sales of sun protection in mature markets
Skin care is expected to have the highest per capita increase in spending by 2018, indicating the higher importance that consumers place on this category as well as its associated higher prices.
While this has so far had a negative effect on sun care (as consumers prefer using skin care products with sun protection) it also provides an opportunity.
As sun care offerings become more sophisticated in terms of their product offerings incorporating benefits from other categories ( like whitening, anti-aging, moisturising, coverage) so can their average price. As a result, they can compensate on overall volume sales lost by selling more expensive and more sophisticated offerings.
The exception of Australasia where per capita spending on sun care is expected to have the biggest growth by 2018, creates an even further opportunity for sun care players to further erode away spending on skin care and colour cosmetics by adding in their portfolios products that not only provide strong effective sun protection but also moisturisation, coverage etc.
As sun protection is used in the whole body rather than just the face, absolute volume growth per capita should theoretically be higher across the world. However, this is not always the case as many consumers either do not use sun protection at all or prefer using skin care products with SPF protection. Where this effect is strongest, is visible by either a small difference in volume per cap growth between sun care and skin care or a high difference in favour of skin care products.
For example in Asia Pacific the absolute volume growth for facial moisturisers is much higher as moisturisers commonly offer SPF30+ and consumers avoid the sun bathing due to cultural preferences. In MEA sun care is actually minimum indicating low penetration of the category in the region. Furthermore, even in Western Europe the consumption growth of sun care is only marginally bigger than that of anti-agers indicating again that skin care products with SPF or no sun protection at all are preferred.
While sun care’s future growth clearly remains in the hands of North and Latin America as well as in Australasia, sun care players still need to raise awareness on the necessity, and efficacy of their offerings not only in Europe but in Asia and Middle East too if the category is to ever reach its full potential.
The extraordinary rise of the BB/CC creams which entered mature markets in mid 2011 has been detrimental to facial sun protection and by extension to sun care. These products which sit between skin care , sun care and colour cosmetics offer sun protection as high as SPF30 as well as UVA protection. Other facial make-up’s over 10% growth till 2018 is expected to be driven by further penetration of BB/CC creams in mature markets.
Their rise to fame was also greatly facilitated by their novelty and their excessive media buzz surrounding their launches. The increasing consumer interest on Korean beauty is also facilitating growth for the category.
The other key growth category by 2018 will be anti-agers. The reason is two-fold. Firstly, an increasing ageing population and secondly marketing efforts by skin care companies to expand their consumer segment by offering prevention not just repair. Sun protection has now become a common standard feature in anti-agers which greatly damages sun protection’s growth potentials. Beyond efficacy and extra-benefits sun care players need to be more aggressive in their marketing in order to gain daily use consumers.
Consumers’ value driven mentality expands beyond sun protection to its fast-growing rivals, upcoming Other facial make-up driven by BB/CC creams popularity and the much established anti-agers.
While consumption is expected to continue to grow albeit a lot slower for sun protection and anti-agers in Europe, average unit prices are in decline or stable across most regions and across all three categories. The exceptions are of course BB/CC creams in Middle East &Africa (new product), and anti-agers in North America.
For sun protection its even worse with only unit prices in Latin America and Middle East and Africa expected to grow by 2018. Even in volume terms growth remains below 5% except Latin America and Asia Pacific. This signifies a double challenge for sun care players. On one hand consumers are consuming less, on the other they are buying cheaper. Added value which is what BB/CC creams represent yields strong volume growth, but not necessarily higher unit prices which are more present in anti-agers. For sun care players they have two choices, create cheaper multi-functional products, or create more expensive offerings which need to justified to consumers with high necessity, high efficacy and scientific values