2011 was another year of solid performance for the global beauty market, despite economic uncertainty and pressures from an increasingly polarised market.
Industry growth accelerated slightly (from 5% in 2010 to 5.3% in 2011) and total sales reached nearly US$426 billion globally.
2011 proved to be a study in contrasts for the beauty industry. While sales continued to be sluggish in established markets plagued by economic and unemployment problems, improved conditions in developing markets added up to a profitable year for many global beauty companies.
While many brand manufacturers honed in on mass-market personal care necessities to meet the needs of consumers looking for market-entry or low prices, it was actually the prestige category that frequently came into view as the winner in boosting sales -- both in the U.S. and elsewhere.
It was most certainly the year of premium beauty, as premium sales continued their upward growth curve in 2011 and almost caught up with growth in the mass market globally, which in turn saw growth slow from 5.7% to 5.4%.
Driven by technological advances, increased advertising spend, increased discretionary spending and wider product distribution channels, sales of premium beauty products will continue to increase through 2012-2013.
Skincare, the largest segment, represents good growth, with increased demand for multi-feature products such as moisturising cream with sun protection and anti-aging or anti-wrinkle properties are likely to drive market growth.
As is typical with the general chemical manufacturing sector, capital costs for the industry are relatively higher than other industries such as the retail sector, due to the nature of machinery tied up in purpose specific activities as well as in the plant itself.
Businesses in this industry have high levels of fixed capital needed to produce quality cosmetics, fragrances, and beauty and hair care products. In addition, larger operators tend to be more capital intensive.
For more information on the global beauty market, see the latest research: Global Beauty Market
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