The year in review and winning strategies for the future
1
GLOBAL BEAUTY AND PERSONAL CARE: THE YEAR IN
REVIEW AND WINNING STRATEGIES FOR THE FUTURE
IRINA BARBALOVA
29-31 MARCH 2011, IN-COSMETICS, MILAN
© Euromonitor International
The year in review and winning strategies for the future
2
Beauty beyond the crisis
Industry dynamics
New positioning and value perceptions
The beauty brand as an experience
The Outlook
© Euromonitor International
The year in review and winning strategies for the future
BEAUTY BEYOND THE CRISIS
MOVING OUT OF THE RECESSION
3
Real GDP: % growth over previous period, annualised
% growth
10
5
0
-5
-10
2008Q3 Q4 Q1 Q2
2009
2010
2011
Q1 2006
Q2 Q3 Q4 Q1 2007
Q2 Q3 Q4 Q1 Q2
Q3 Q4 Q1 Q2
Q3 Q4 Q1 Q2
Q3 Q4
World
Advanced economies
Developing economies
Retailing Growth
% value growth
10
8
6
4
2
0
-2
2005
2006
2007
2008
2009
2010
© Euromonitor International
Retailing
Grocery Retailers
Non-Grocery Retailers
Non-store Retailing
BPC Non-store sales
The year in review and winning strategies for the future
BEAUTY BEYOND THE CRISIS
WESTERN EUROPE CONSUMER EXPENDITURE SLOWEST TO
RECOVER
15
% growth (US$)
10
5
0
-5
2006-07
2007-08
2008-09
2009-10
-10
-15
Health Goods and Medical Services
Alcoholic Beverages and Tobacco
Clothing and Footwear
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Personal Care
Food and Non-Alcoholic Beverages
4
The year in review and winning strategies for the future
BEAUTY BEYOND THE CRISIS
5
MORE HURDLES TO BE OVERCOME
14
Number of countries
with an unemployment
rate above 10% in 2007
25
Number of countries
with an unemployment
rate above 10% in 2010
© Euromonitor International
Source: Euromonitor International from national statistics
Data refer to 80 major economies
The year in review and winning strategies for the future
BEAUTY BEYOND THE CRISIS
6
THE CONSUMER IN 2011 AND BEYOND
Valueseeking
Nuanced
luxury
The postrecession
consumer
Experiencefocused
Staying
ahead
and well
© Euromonitor International
Digital and
connected
The year in review and winning strategies for the future
7
Beauty beyond the crisis
Industry dynamics
New positioning and value perceptions
The beauty brand as an experience
The Outlook
© Euromonitor International
The year in review and winning strategies for the future
INDUSTRY DYNAMICS
8
400,000
8
350,000
7
300,000
6
5
250,000
4
200,000
3
150,000
2
100,000
1
50,000
0
0
-1
2005
Total BPC
© Euromonitor International
2006
2007
% Total growth
2008
2009
% Prem growth
2010
% Mass growth
% Value growth
US$ million
GLOBAL INDUSTRY RECOVERS FROM THE SLUMP
The year in review and winning strategies for the future
INDUSTRY DYNAMICS
2010 COUNTRY PERFORMANCE
 2010 Country performance
© Euromonitor International
9
The year in review and winning strategies for the future
INDUSTRY DYNAMICS
PREMIUM COSMETICS ON THE REBOUND
10
9%
1%
1%
2%
12%
11%
1%
© Euromonitor International
The year in review and winning strategies for the future
INDUSTRY DYNAMICS
PREMIUM MARKET SHARE STILL LOW IN LATIN AMERICA
© Euromonitor International
Mass Cosmetics
Premium Cosmetics
11
The year in review and winning strategies for the future
INDUSTRY DYNAMICS
MASS COSMETICS TO DRIVE FUTURE GROWTH
12
100
76%
90
72%
% value (US$)
80
70
60
50
40
30
20
28%
10
24%
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
© Euromonitor International
Global Premium Cosmetics
Global Mass Cosmetics
2015
The year in review and winning strategies for the future
INDUSTRY DYNAMICS
TOP CATEGORY BY REGION
© Euromonitor International
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The year in review and winning strategies for the future
INDUSTRY DYNAMICS
DISCRETIONARY CATEGORIES PICK UP
US$ million
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
© Euromonitor International
08-09 % growth
09-10% growth
9
8
7
6
5
4
3
2
1
0
% value growth
2010 US$mn
14
The year in review and winning strategies for the future
15
Beauty beyond the crisis
Industry dynamics
New positioning and value perceptions
The beauty brand as an experience
The Outlook
© Euromonitor International
The year in review and winning strategies for the future
NEW POSITIONING AND VALUE PERCEPTIONS
PRIVATE LABEL PICKS UP MARGINALLY
16
Private label share
14
Germany
12
Spain
% value share
10
8
Global PL growth by
category
6
4
Colour Cosmetics (+10%)
Men’s grooming (+10%)
Skin Care (+8.5%)
2
0
2006
2007
2008
© Euromonitor International
World
2009
2010
USA
France
Germany
United Kingdom
Spain
Oral Care (+5.6%)
Hair Care (+4.4%)
Bath & Shower (+0.5%)
The year in review and winning strategies for the future
NEW POSITIONING AND VALUE PERCEPTIONS
PRIVATE LABEL KEEPS UP THE PACE IN INNOVATION
Tapping into budget and ‘high end’ lines
Focus on product efficacy and ingredients
Increasingly ‘green’ savvy
Diversifying existing lines
© Euromonitor International
17
The year in review and winning strategies for the future
NEW POSITIONING AND VALUE PERCEPTIONS
INNOVATION IN BRANDS STILL A PRIME FOCUS
Scientifically-advanced innovation
New concepts and ‘professional’ status
Time-saving vs long-lasting beauty
Building on successful brands
© Euromonitor International
18
The year in review and winning strategies for the future
NEW POSITIONING AND VALUE PERCEPTIONS
NEW POSITIONING IN SKIN CARE
Category
cross- over
© Euromonitor International
New
consumer
targets
19
Holistic
skin care
Increased
polarisation
The year in review and winning strategies for the future
20
Beauty beyond the crisis
Industry dynamics
New positioning and value perceptions
The beauty brand as an experience
The Outlook
© Euromonitor International
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
INTERNET CONTINUES TO RESHAPE THE WORLD
Half of all Internet users will be in
Asia
Asia
50
Rest of world
100%
40
90%
30
20
10
0
2000
2010
2020
711 million
Chinese Internet users in 2020
281 million
© Euromonitor International
US Internet users in 2020
% of world’s Internet users
% of world population
More than 40% of the world’s
population will be on the
Internet in 2020
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000
2010
2020
21
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
INCREASING IMPORTANCE IN BEAUTY RETAILING
22
Global Beauty Channel Breakdown
80
14
15.3
16.1
12.4
12.9
12.8
10.6
9.7
9.5
13.1
13.4
13.4
26
27
26.9
2009
2010
70
% value share
60
50
40
30
20
10
0
2005
2006
2007
2008
Non-Store Retailing
Drugstores
Beauty Specialists
Super/Hypermarkets
© Euromonitor International
Department Stores
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
VARIED PENETRATION ACROSS KEY MARKETS
23
Beauty Internet Retailing – Top Five Markets
9
% share of total retail sales
8
7
6
5
4
3
2
1
0
S.Korea
© Euromonitor International
France
USA
UK
Japan
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
NEW WAYS OF ENGAGING WITH BEAUTY CONSUMERS
Social Media
Mobile
Technology
© Euromonitor International
New
In-store
Experience
24
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
25
500 million
• Facebook users
30 billion
• Pieces of content
per month
700 billion
• Minutes of log-in
time per month
130
• Average friends per
user
62%
• Of users between
the age of 18-34
50%
• Users of Facebook
are female
© Euromonitor International
55 million
• Registered tweets
per day
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
ONLINE PRESENCE AND SOCIAL MEDIA NOT TO BE IGNORED 26
Key players increasing online presence
Opportunities for smaller brands
Social commerce still limited
Blogging/’vlogging’ offer new experience
1,614,613
people like this
© Euromonitor International
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
THE POWER OF THE SMARTPHONE APP
Key success factors:
Personalised
Added value
Interactive experience
Real-time updates
© Euromonitor International
27
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
WHERE NEXT FOR VIRTUAL CONNECTIVITY?
© Euromonitor International
28
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
IN-STORE BEAUTY EXPERIENCE VITAL FOR THE INDUSTRY
Beauty services challenged by at-home beauty
Creating value is key
Retailers enriching the in-store experience
Fastest Growing Beauty Sectors
2009-10 (value)
Nail Polish
Men’s skin care
Mass fragrances
Sun protection
Anti-agers
Colourants
Eye liner/pencil
Blusher/bronzer
© Euromonitor International
(+17%)
(+12%)
(+9%)
(8.5%)
(7.6%)
(+7%)
(+7%)
(+7%)
29
The year in review and winning strategies for the future
THE BEAUTY BRAND AS AN EXPERIENCE
RE-CREATING THE SPA EXPERIENCE
Innovative retail concepts
Mobile beauty becomes prominent
Health and wellness factor to drive
interest in spas
New consumer targets
Key Spa Tourism Markets,
absolute growth 2010-15 (million)
USA
Japan
China
France
Israel
India
Austria
© Euromonitor International
Vietnam
US$ 1,660
US$ 1,350
US$ 1,030
US$ 856
US$ 362
US$ 363
US$ 266
US$ 221
30
The year in review and winning strategies for the future
31
Beauty beyond the crisis
Industry dynamics
New positioning and value perceptions
The beauty brand as an experience
The Outlook
© Euromonitor International
The year in review and winning strategies for the future
THE OUTLOOK
GROWTH TO CATCH UP WITH PRE-RECESSION LEVELS
© Euromonitor International
32
The year in review and winning strategies for the future
THE OUTLOOK
CONSUMER NEEDS BECOMING MORE DIVERSE
© Euromonitor International
Value
Efficacy
Personal
touch
Experience
33
The year in review and winning strategies for the future
THE OUTLOOK
BEAUTY INTERNET SALES TO BECOME MORE COMPETITIVE 34
US$ million
Beauty Internet Sales 2010-15
16,000
40
14,000
35
12,000
30
10,000
25
8,000
20
6,000
15
4,000
10
2,000
5
0
0
© Euromonitor International
2010
2015
2010-15 CAGR
The year in review and winning strategies for the future
THE OUTLOOK
GLOBAL GROWTH TO BE DRIVEN BY MASS BEAUTY
35
Mass Fragrances
Mass Colour Cosmetics
Mass Skin Care
Premium Hair Care
Mass Hair Care
Premium Skin Care
Premium Fragrances
Premium Colour Cosmetics
© Euromonitor International
0
0.5
1
1.5
2
2.5
3
3.5
4
% value growth (real terms)
4.5
5
5.5
The year in review and winning strategies for the future
THE OUTLOOK
MORE OPPORTUNITIES TO BE HAD IN PREMIUM SKIN CARE
12,000
36
20
18
16
14
8,000
12
10
6,000
8
6
4,000
4
2
2,000
0
0
© Euromonitor International
China
-2
2010
USA
2011
2012
2013
Japan
China growth
2014
USA growth
2015
Japan growth
% value growth
US$ million (nominal)
10,000
The year in review and winning strategies for the future
2X
37
China’s premium cosmetics
market will double by 2015,
to reach $7billion
80%
$83
© Euromonitor International
BILLION
of Latin America’s industry
value will be accounted for by
mass products in 2015
Latin America industry value
in 2015, third largest region
globally
The year in review and winning strategies for the future
38
THANK YOU FOR LISTENING
Irina Barbalova, Head of Beauty and Personal Care Research
[email protected]
Q&A?
© Euromonitor International