Beauty and cosmetic industry

If there is one industry that economists know for sure that it will grow no matter what come rain or sunshine, then it is the beauty and cosmetic industry. It is estimated to be worth multi billions of dollars all across the globe and most of the users of these products are women. The traditional markets where cosmetic products have been in demand for are mainly located in Western Europe and North America. That is changing though as new emerging markets come into the limelight in countries like Brazil, India, China and Russia. Different markets have different characteristics but one thing that is a commonality in almost all markets is the demand of skin care products as the number one category amongst all beauty products. Hair care products follow next followed by color products, fragrances and then toiletries. Some of the well known companies involved in the beauty industry are like Revlon, Kao corp, Johnson and Johnson Inc, Procter & Gamble, L’oreal, Unilever, Estee lauder, Avon products, Shiseido, Beiersdorf, Alberto Culver, Henkel, Coty, Limited Brands, LVMH, Colgate Palmolive, Mary Kay, Yves Rocher, Kose, Access Business Group, etc.

When you analyze the buying trends of the consumers according to geographical regions, you realize the following trends. In Europe, the growth of the use of beauty products is attributed to the economic growth that is happening in Eastern Europe and Russia. Even though the economic recession of 2009 affected some economies in these regions, the growth in the demand of beauty products was not affected that much. In these eastern European regions, it is mostly young people who are buying these products. This is a big contrast with those located in Western Europe where baby boomers who are now retiring are the ones buying most of the beauty products. In countries like China, India, Brazil and Russia, it is the growing middle class that is fuelling the growth of the beauty care industry. In china alone, it is estimated that between 200 and 300 million people moved into the middle class in the decade between 1999 and 2009. These middle class which lives in cities mostly is very much self conscious health wise and physical appearance and has got the disposable income to buy the beauty products they need.

In Brazil, beauty industry is growing rapidly with multinational companies having a bit of success because of the growing middle class over there. But because of the heavy taxes imposed on imported beauty products by the Brazilian government, the local companies there have managed to establish themselves into their market very well. Another reason why these local companies have a bigger advantage over their multinational competitors is because a large segment of the Brazilian population is still poor and cannot afford products offered by multinationals. One common characteristic that many of the leading beauty companies have is the use of online sells methods to reach their customers. Though they still use some of the traditional methods of selling their products like through direct sellers, they are finding it very convenient to also build a relationship with their clients online. That way they are able to maintain a close relationship with their customer base and also reduce their operating costs. The beauty industry is one industry that is worth paying attention to as a consumer or as an investor for it has a bright future ahead of it.