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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
© Euromonitor International
2
Euromonitor International: Strategic Global Market Research
BLURRING THE LINES IN BEAUTY
THE STATE OF THE SUN CARE MARKET
OPPORTUNITY ZONES AND KEY
CHALLENGES
FUTURE PROSPECTS
© Euromonitor International
4
-4
-2
0
2
4
6
8
10
12
0
2000
4000
6000
8000
10000
12000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
%Growth
US$million
Developed vs. Emerging Markets in Sun Care 2008-2018
Developed Emerging % Growth Developed markets % Growth Emerging Markets
Substitutes Cause Mature Market Stagnation in Sun Care
THE STATE OF THE SUN CARE MARKET
© Euromonitor International
5
0
2
4
6
8
10
12
0
20,000
40,000
60,000
80,000
100,000
120,000
%ValueGrowth
US$million
Beauty and Personal Care in 2014
2014 US$mn 2012-13 % growth 2013-14% growth
Sun Care’s Growth Among the Sharpest Slow Downs of 2014
THE STATE OF THE SUN CARE MARKET
© Euromonitor International
6
Challenges and Opportunities
Sun Care’s Growth Potential in the Hands of a Few
THE STATE OF THE SUN CARE MARKET


Many unexplored markets
Governments raise awareness
Incorporating extra features
Additional step in routine
Low consumer awareness
High dependence on
economically volatile markets0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017 2018
%Shareofvalue
Sun Care’s revenues,
2014-2018, US$ million
Brazil US China Others
© Euromonitor International
7
Sun Care Breakdown
by Category
Aftersun Self-Tanning Sun Protection
Note: Inner circle 2008, middle 2013, outer 2018
Sun Protection’s Domination in Sun Care Dictates Growth
THE STATE OF THE SUN CARE MARKET
US$1.8bnSun Protection’s global absolute
growth contribution to sun care by
2018
US$1bnLatin America’s contribution to Sun
Protection’s global absolute growth
contribution by 2018
THE STATE OF THE SUN CARE MARKET
OPPORTUNITY ZONES AND KEY
CHALLENGES
FUTURE PROSPECTS
© Euromonitor International
9
Legislation
Awareness
Availability
Affordability
Category
Cross-Over
Sun Care’s Key Challenges Hold Back Growth
OPPORTUNITY ZONES AND KEY CHALLENGES
© Euromonitor International
10
Sun
Protection
Hydration
Anti-AgersCoverage
Miracle Cushion Fluid
Foundation SPF23/PA++
NIVEA Daily Essentials
Sensitive Day Cream SPF 15
Blurring the Lines as Sun Protection Features in Other Categories
OPPORTUNITY ZONES AND KEY CHALLENGES
© Euromonitor International
11
-3
-2
-1
0
1
2
3
4
Asia Pacific
Australasia
Eastern Europe
Latin AmericaMiddle East & Africa
North America
Western Europe
Absolute per capita growth between 2013-2014 by region
Skin Care Colour Cosmetics Sun Care
Skin Care Offerings Remain The Most Desired Globally
OPPORTUNITY ZONES AND KEY CHALLENGES
© Euromonitor International
12
-2
0
2
4
6
8
10
12
Asia Pacific Australasia Eastern
Europe
Latin
America
Middle East
& Africa
North
America
Western
Europe
Absolutevolumepercapita-ml
Facial Moisturisers vs. Anti-Agers vs. Sun Care in
absolute volume per capita, 2013-2018 by region
Facial Moisturisers Anti-Agers Sun Care
Facial Skin Care Dominates Consumption Levels
OPPORTUNITY ZONES AND KEY CHALLENGES
© Euromonitor International
13
-3
-2
-1
0
1
2
3
4
5
6
7
0 5 10 15 20 25 30
UnitPrice%
Volume %
Volume vs. Unit Price, CAGR 2013-2018 by Region
Selected Categories
Sun protection Anti-Agers Other Facial Make-Up
MEA
North America
North America
Asia Pacific
Asia Pacific
Latin America
MEA
Latin America MEA Australasia
Asia Pacific
Eastern Europe
Western Europe
Australasia
WE
Australasia
EE
NA
Consumers to Continue to Look for Value
OPPORTUNITY ZONES AND KEY CHALLENGES
© Euromonitor International
14
0
2
4
6
8
10
12
0
1000
2000
3000
4000
5000
6000
7000
8000
%CAGR
US$Million
Absolute value growth vs. CAGR 2013-
2018 selected categories
Absolute Value Growth 2013-2018 % Growth CAGR 2013-2018
Value
for
money
Novel
concept
Conveni
ence
Korean
wave
BB/CC
Creams
Future Growth Remains in the Hands of BB Creams and Anti-agers
OPPORTUNITY ZONES AND KEY CHALLENGES
© Euromonitor International
15
Sun Protection Gives Colour Cosmetics an Edge
OPPORTUNITY ZONES AND KEY CHALLENGES
Multifunctional
for convenience
• BB Cream
• CC Cream
Targeted for
enhanced
benefit
• Anti-ageing
foundations
BB/CC Creams
Coverage, hydration and sun
protection
Anti-ageing foundations
Coverage, dark spots, lift and firm
skin, sun protection
Cannibalisation Effect?
 Regular foundations
 Anti-ageing foundations
 BB/CC Creams
 Anti-ageing moisturisers
 Sun care
© Euromonitor International
16
0%
5%
10%
15%
20%
25%
30%
35%
2009 2010 2011 2012 2013
%Year-on-YearGrowth
Selected Category Growth, 2009-13
Foundation/Concealer Other Facial Make-up Anti-Agers Sun Care
Foundations Take a Slight Dip at the Expense of BB/CC…
OPPORTUNITY ZONES AND KEY CHALLENGES
Note: EM includes BB & CC cream in Other Facial Make-up, but most of Other Facial Make-up are BB and CC cream
© Euromonitor International
17
…But Remain in the Lead in Terms of Overall Size
OPPORTUNITY ZONES AND KEY CHALLENGES
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Anti-agers Foundations Sun Care Other Facial Make-up
US$million
Market Sizes Anti-agers, Foundation, Sun Care and
Other Facial Make-Up in 2018
© Euromonitor International
18
0
1
2
3
4
5
6
7
8
9
0
2
4
6
8
10
12
14
16
18
20
%CAGRHairCare2013-2018
AbsoluteGrowthinPerCapitaSpendingHairCareUS$
(fixedexchangerate)
Top 15 Markets Forecast Growth Hair Care vs
Per Capita Spending Absolute Growth 2013-18
Per Capita Spending Hair Care Absolute Growth % CAGR Hair Care 2013-2018
Hair Care with SPF Strong Potential in New Markets
OPPORTUNITY ZONES AND KEY CHALLENGES
Global Hair
Care Forecast
CAGR at 2.4%
2013-2018
THE STATE OF THE SUN CARE MARKET
OPPORTUNITY ZONES AND KEY
CHALLENGES
FUTURE PROSPECTS
© Euromonitor International
20
ColourCosmetics
Coverage
Anti-Ageing
Lifting
Firming
SkinCare
Hydration
Whitening
SkinCare
Skin types
Winning Strategies in Sun Care and Beyond
FUTURE PROSPECTS
Sun Care Imports
Sun Care Exports
Skin care
Colour Cosmetics
Hair Care
Deodorants?
With
SPF
© Euromonitor International
21
Sun care +
Coverage +
Anti-agers
Sun Care +
Anti-agers
Sun care +
Coverage +
Anti-agers
New Markets Offer Varied Scope for Hybrid Sun Care Ranges
FUTURE PROSPECTS
LA
• Brazil
• Mexico
• Argentina
AP
• Indonesia
• Thailand
• Vietnam
MEA • Saudi Arabia
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

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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
  • 2. © Euromonitor International 2 Euromonitor International: Strategic Global Market Research BLURRING THE LINES IN BEAUTY
  • 3. THE STATE OF THE SUN CARE MARKET OPPORTUNITY ZONES AND KEY CHALLENGES FUTURE PROSPECTS
  • 4. © Euromonitor International 4 -4 -2 0 2 4 6 8 10 12 0 2000 4000 6000 8000 10000 12000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 %Growth US$million Developed vs. Emerging Markets in Sun Care 2008-2018 Developed Emerging % Growth Developed markets % Growth Emerging Markets Substitutes Cause Mature Market Stagnation in Sun Care THE STATE OF THE SUN CARE MARKET
  • 5. © Euromonitor International 5 0 2 4 6 8 10 12 0 20,000 40,000 60,000 80,000 100,000 120,000 %ValueGrowth US$million Beauty and Personal Care in 2014 2014 US$mn 2012-13 % growth 2013-14% growth Sun Care’s Growth Among the Sharpest Slow Downs of 2014 THE STATE OF THE SUN CARE MARKET
  • 6. © Euromonitor International 6 Challenges and Opportunities Sun Care’s Growth Potential in the Hands of a Few THE STATE OF THE SUN CARE MARKET   Many unexplored markets Governments raise awareness Incorporating extra features Additional step in routine Low consumer awareness High dependence on economically volatile markets0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018 %Shareofvalue Sun Care’s revenues, 2014-2018, US$ million Brazil US China Others
  • 7. © Euromonitor International 7 Sun Care Breakdown by Category Aftersun Self-Tanning Sun Protection Note: Inner circle 2008, middle 2013, outer 2018 Sun Protection’s Domination in Sun Care Dictates Growth THE STATE OF THE SUN CARE MARKET US$1.8bnSun Protection’s global absolute growth contribution to sun care by 2018 US$1bnLatin America’s contribution to Sun Protection’s global absolute growth contribution by 2018
  • 8. THE STATE OF THE SUN CARE MARKET OPPORTUNITY ZONES AND KEY CHALLENGES FUTURE PROSPECTS
  • 9. © Euromonitor International 9 Legislation Awareness Availability Affordability Category Cross-Over Sun Care’s Key Challenges Hold Back Growth OPPORTUNITY ZONES AND KEY CHALLENGES
  • 10. © Euromonitor International 10 Sun Protection Hydration Anti-AgersCoverage Miracle Cushion Fluid Foundation SPF23/PA++ NIVEA Daily Essentials Sensitive Day Cream SPF 15 Blurring the Lines as Sun Protection Features in Other Categories OPPORTUNITY ZONES AND KEY CHALLENGES
  • 11. © Euromonitor International 11 -3 -2 -1 0 1 2 3 4 Asia Pacific Australasia Eastern Europe Latin AmericaMiddle East & Africa North America Western Europe Absolute per capita growth between 2013-2014 by region Skin Care Colour Cosmetics Sun Care Skin Care Offerings Remain The Most Desired Globally OPPORTUNITY ZONES AND KEY CHALLENGES
  • 12. © Euromonitor International 12 -2 0 2 4 6 8 10 12 Asia Pacific Australasia Eastern Europe Latin America Middle East & Africa North America Western Europe Absolutevolumepercapita-ml Facial Moisturisers vs. Anti-Agers vs. Sun Care in absolute volume per capita, 2013-2018 by region Facial Moisturisers Anti-Agers Sun Care Facial Skin Care Dominates Consumption Levels OPPORTUNITY ZONES AND KEY CHALLENGES
  • 13. © Euromonitor International 13 -3 -2 -1 0 1 2 3 4 5 6 7 0 5 10 15 20 25 30 UnitPrice% Volume % Volume vs. Unit Price, CAGR 2013-2018 by Region Selected Categories Sun protection Anti-Agers Other Facial Make-Up MEA North America North America Asia Pacific Asia Pacific Latin America MEA Latin America MEA Australasia Asia Pacific Eastern Europe Western Europe Australasia WE Australasia EE NA Consumers to Continue to Look for Value OPPORTUNITY ZONES AND KEY CHALLENGES
  • 14. © Euromonitor International 14 0 2 4 6 8 10 12 0 1000 2000 3000 4000 5000 6000 7000 8000 %CAGR US$Million Absolute value growth vs. CAGR 2013- 2018 selected categories Absolute Value Growth 2013-2018 % Growth CAGR 2013-2018 Value for money Novel concept Conveni ence Korean wave BB/CC Creams Future Growth Remains in the Hands of BB Creams and Anti-agers OPPORTUNITY ZONES AND KEY CHALLENGES
  • 15. © Euromonitor International 15 Sun Protection Gives Colour Cosmetics an Edge OPPORTUNITY ZONES AND KEY CHALLENGES Multifunctional for convenience • BB Cream • CC Cream Targeted for enhanced benefit • Anti-ageing foundations BB/CC Creams Coverage, hydration and sun protection Anti-ageing foundations Coverage, dark spots, lift and firm skin, sun protection Cannibalisation Effect?  Regular foundations  Anti-ageing foundations  BB/CC Creams  Anti-ageing moisturisers  Sun care
  • 16. © Euromonitor International 16 0% 5% 10% 15% 20% 25% 30% 35% 2009 2010 2011 2012 2013 %Year-on-YearGrowth Selected Category Growth, 2009-13 Foundation/Concealer Other Facial Make-up Anti-Agers Sun Care Foundations Take a Slight Dip at the Expense of BB/CC… OPPORTUNITY ZONES AND KEY CHALLENGES Note: EM includes BB & CC cream in Other Facial Make-up, but most of Other Facial Make-up are BB and CC cream
  • 17. © Euromonitor International 17 …But Remain in the Lead in Terms of Overall Size OPPORTUNITY ZONES AND KEY CHALLENGES 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Anti-agers Foundations Sun Care Other Facial Make-up US$million Market Sizes Anti-agers, Foundation, Sun Care and Other Facial Make-Up in 2018
  • 18. © Euromonitor International 18 0 1 2 3 4 5 6 7 8 9 0 2 4 6 8 10 12 14 16 18 20 %CAGRHairCare2013-2018 AbsoluteGrowthinPerCapitaSpendingHairCareUS$ (fixedexchangerate) Top 15 Markets Forecast Growth Hair Care vs Per Capita Spending Absolute Growth 2013-18 Per Capita Spending Hair Care Absolute Growth % CAGR Hair Care 2013-2018 Hair Care with SPF Strong Potential in New Markets OPPORTUNITY ZONES AND KEY CHALLENGES Global Hair Care Forecast CAGR at 2.4% 2013-2018
  • 19. THE STATE OF THE SUN CARE MARKET OPPORTUNITY ZONES AND KEY CHALLENGES FUTURE PROSPECTS
  • 20. © Euromonitor International 20 ColourCosmetics Coverage Anti-Ageing Lifting Firming SkinCare Hydration Whitening SkinCare Skin types Winning Strategies in Sun Care and Beyond FUTURE PROSPECTS Sun Care Imports Sun Care Exports Skin care Colour Cosmetics Hair Care Deodorants? With SPF
  • 21. © Euromonitor International 21 Sun care + Coverage + Anti-agers Sun Care + Anti-agers Sun care + Coverage + Anti-agers New Markets Offer Varied Scope for Hybrid Sun Care Ranges FUTURE PROSPECTS LA • Brazil • Mexico • Argentina AP • Indonesia • Thailand • Vietnam MEA • Saudi Arabia
  • 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

  1. 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.
  2. 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.
  3. 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-
  4. 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.
  5. 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
  6. 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.
  7. 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.
  8. 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.
  9. 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