Beauty Products Market
Europeans take beauty and personal care very seriously, as they have the leading regional beauty products market in the world. Within the European cosmetics and personal care market, Germany had the greatest market volume in 2014. According to national statistics, Germany’s beauty products market was valued a staggering EU€13 billion in 2014—followed by France and the United Kingdom at EU€10.6 and EU€10.4 billion, respectively.
Turkey is one of the fastest growing beauty products markets in Europe. Classified as Western Europe, Turkey’s growing economy can sometimes be overlooked, but unlike its neighbor Greece, Turkey’s economy is very much on the rise. Even the Central European beauty products market is experiencing recent growth, with an average growth rate between 2 and 3%.
The beauty products market’s ability to innovate allows it to remain vibrant and competitive as well as a major contributor to healthy economies. Products with multiple, innovative claims were shown to feature strongly in the European beauty products market. Products with multiple functions are convenient and cost-effective and have been taking over the European market. Multi-functional products that include any combination of: whitening, sun protection, colors, moisturizing, or age protection. Although American consumers state that they use 10 or more beauty products daily, Europeans only use five to seven. Value and function remain a top priority for Europeans.
Even though most western European countries face the challenge of very mature beauty product markets, Germany, France, and the United Kingdom continued to register positive value growth within these mature markets in 2014. Companies that continually strive for product innovation and the increasing differentiation and segmentation of products have seen the steadiest growth in recent years. Micro-segmentation is a great tool used to generate demand and drive sales in a mature market. Simply targeting men, women, or girls is no longer enough to generate sufficient consumer interest, forcing manufacturers to target very specific age groups, skin types, and cultures.
Premium personal care and beauty out-performed the mass segment in many Western European countries in 2014, specifically the United Kingdom. Specific categories in which premium products thrived included color cosmetics, skin care, and fragrances. Consumers are willing to spend more on these products because they are often seen as a luxury rather than daily essentials. In fact, fragrances were the number one performing beauty products category in the United Kingdom in 2014. Premium brands have become more accessible to consumers through online shopping sites, such as Net-a-porter and Lookfantastic.com, taking business away from upscale market department stores and salons. Promoting new brands and products via social media has become very successful in Europe over the past few years. Young women have the desire to look better and are more willing to try new colors and products that will help them stand out.
Organic and natural products with economically friendly packaging are becoming more popular internationally, and the trend is also represented in Europe. Data from researchers at Grand View Research suggests that the market for organic personal care products should increase from approximately US$8.2 billion in 2013 to a staggering US$16.0 billion in 2020, reflecting 10% annual growth rates across Europe. The European organic beauty products market is dominated by Germany and France, which accounts for 30% or the total CAGR. Products gaining popularity are those that focus on exfoliation, antioxidant properties, and those featuring herbal extracts. Nordic consumers are also taking natural and organic beauty seriously, as the Nordic market for natural cosmetics is showing healthy growth—with sales doubling between 2007 and 2014, according to Organic Monitor. Denmark has the largest market for natural cosmetics in the Nordic region, which is not as surprising, as the Danish also have the highest market share (7%) for organic foods in the world.
Not all European countries are experiencing growth in the recent years. The ongoing recession in countries, such as Greece and Spain, has had deleterious effects on disposable incomes, making consumers pare down on beauty expenses. On the plus side, stabilization trends are emerging in sales, as it appears that the beauty products market has reached its minimum point after years of free-fall. Consumers in these countries may be shifting from premium to mass products, but they are still buying beauty products. Overall, the beauty products market managed to perform better than other consumer markets in 2014. Consumers are willing to spend more on essential products, such as sun protection, oral care, hair care, and bath and shower, which consumers can trade down but not discard altogether.
Because Europeans are some of the heaviest spenders on beauty products internationally, it can be expected that growth will continue to be positive in the forecast. Consumers will continue to seek products with new formulas, styles, packaging, and ingredients that can enhance their personal care routines daily as well as on special occasions.
