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Personal Care Opportunities in Emerging Markets

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  • 1. 1 Personal Care Opportunities in Emerging Markets Comparing and contrasting BRIC markets and frontier economies Reference Code: CM00234-028 Publication Date: December 2013
  • 2. 2 Deepika Bansal Deepika Bansal has over 10 years of experience in technology and consumer research as a strategy consultant and market analyst. She has extensive experience in conducting industry and company analysis, helping clients ranging from blue chips to start-ups in developing their emerging market strategy. She has worked with leading consulting and research firms such as A.T. Kearney, The Corporate Executive Board, and Ovum. Disclaimer Copyright © 2013 Datamonitor This report is published by Datamonitor (the Publisher). This report contains information from reputable sources and although reasonable efforts have been made to publish accurate information, you assume sole responsibility for the selection, suitability and use of this report and acknowledge that the Publisher makes no warranties (either express or implied) as to, nor accepts liability for, the accuracy or fitness for a particular purpose of the information or advice contained herein. The Publisher wishes to make it clear that any views or opinions expressed in this report by individual authors or contributors are their personal views and opinions and do not necessarily reflect the views/opinions of the Publisher.
  • 3. 3 Table of contents Deepika Bansal 2 Disclaimer 2 Executive summary 15 Country attractiveness index 15 Category analysis 15 Country profile – Argentina 16 Country profile – Mexico 17 Country profile – Colombia 17 Country profile – Indonesia 18 Country profile – Turkey 18 Country profile – Nigeria 19 Chapter 1 Introduction 20 About this report 20 Report structure 20 Countries covered 21 Definitions and methodology 21 Details of specific metrics 22 Methodology for the scoring system 23 Category review/overview 23 Chapter 2 Country attractiveness index 24 Summary 24 Introduction 24 Final country rankings 24
  • 4. 4 High attractiveness countries 28 Country attractiveness on the basis of market size, per capita spend, and growth 29 Personal care market size, market growth, and per capita consumption 31 Market size and consumption (population, household final consumption expenditure, and population growth) 33 Market size and intensity (GDP, GDP growth, and inflation) 33 Market growth and infrastructure (Internet and mobile penetration) 33 Population, per capita spend, and social structure (FDI, employment rate, corruption index) 34 Room for improvement 34 Future opportunities 34 Country groupings 35 Market maturity and attractiveness 35 Market size versus per capita spend on personal care 35 Growth of the personal care market versus per capita spend on personal care 37 Growth of the personal care market versus consumption 38 Per capita spend on personal care versus risk index 40 Chapter 3 Category analysis 42 Summary 42 Introduction 43 Category analysis 43 Fragrances 43 Market size, growth forecasts, and per capita analysis 43 Fragrances market value and growth 44 Category size by country 45 Haircare 46 Market size, growth forecasts, and per capita analysis 46 Haircare market value and growth 47 Category size by country 49 Make-up products 50 Market size, growth forecasts, and per capita analysis 50 Make-up market value and growth 51 Category size by country 53
  • 5. 5 Male toiletries 54 Market size, growth forecasts, and per capita analysis 54 Male toiletries market value and growth 55 Category size by country 56 Personal hygiene 56 Market size, growth forecasts, and per capita analysis 56 Personal hygiene market value and growth 58 Category size by country 59 Oral hygiene 60 Market size, growth forecasts, and per capita analysis 60 Oral hygiene market value and growth 61 Category size by country 62 Skincare 63 Market size, growth forecasts, and per capita analysis 63 Skincare market value and growth 64 Category size by country 65 Chapter 4 BRIC versus frontier markets 67 Introduction 67 Comparative analysis: BRIC countries and other emerging markets 67 Chapter 5 Country profile: Argentina 70 Summary 70 Macroeconomic overview 70 Trends 72 Depreciating currency driving the demand for homegrown cosmetics 72 Direct and online sales driving personal care product reach 72 Greater demand for products with functional benefits 73 Personal care market value and forecasts 73 Fragrances 74
  • 6. 6 Market size and growth forecast 74 Haircare 75 Market size and growth forecast 75 Make-up products 76 Market size and growth forecast 76 Male toiletries 77 Market size and growth forecast 77 Oral hygiene 78 Market size and growth forecast 78 Personal hygiene 79 Market size and growth forecast 79 Skincare 80 Market size and growth forecast 80 Chapter 6 Country profile: Mexico 82 Summary 82 Macroeconomic overview 82 Trends 84 Numero uno in cosmetic exports 85 Growing market for male grooming products 85 Growing popularity of the direct selling medium 85 Personal care market value and forecasts 86 Fragrances 87 Market size and growth forecast 87 Haircare 88 Market size and growth forecast 88 Make-up products 89 Market size and growth forecast 89 Male toiletries 90
  • 7. 7 Market size and growth forecast 90 Oral hygiene 91 Market size and growth forecast 91 Personal hygiene 92 Market size and growth forecast 92 Skincare 93 Market size and growth forecast 93 Chapter 7 Country profile: Colombia 95 Summary 95 Macroeconomic overview 95 Trends 97 Upcoming destination for personal care product exports 98 Greater demand for 'natural' and organic products 98 Popularity of direct selling eroding instore sales 98 Personal care market value and forecasts 98 Fragrances 99 Market size and growth forecast 99 Haircare 100 Market size and growth forecast 100 Make-up products 101 Market size and growth forecast 101 Male toiletries 102 Market size and growth forecast 102 Oral hygiene 103 Market size and growth forecast 103 Personal hygiene 104 Market size and growth forecast 104 Skincare 105
  • 8. 8 Market size and growth forecast 105 Chapter 8 Country profile: Indonesia 107 Summary 107 Macroeconomic overview 107 Trends 109 Rising demand for Halal-certified personal care products 110 High proportion of young Indonesians driving sale of non-essential personal care products 110 Rising middle class population with increased disposable income 110 Personal care market value and forecasts 111 Fragrances 112 Market size and growth forecast 112 Haircare 113 Market size and growth forecast 113 Make-up products 114 Market size and growth forecast 114 Male toiletries 115 Market size and growth forecast 115 Oral hygiene 116 Market size and growth forecast 116 Personal hygiene 117 Market size and growth forecast 117 Skincare 118 Market size and growth forecast 118 Chapter 9 Country profile: Turkey 121 Summary 121 Macroeconomic overview 121
  • 9. 9 Trends 123 Cosmetic companies growing presence in the country through inorganic route 123 New channel alternatives 124 Competition raising standards 124 Personal care market value and forecasts 124 Fragrances 125 Market size and growth forecast 125 Haircare 126 Market size and growth forecast 126 Make-up products 127 Market size and growth forecast 127 Male toiletries 128 Market size and growth forecast 128 Oral hygiene 129 Market size and growth forecast 129 Personal hygiene 130 Market size and growth forecast 130 Skincare 131 Market size and growth forecast 131 Chapter 10 Country profile: Nigeria 133 Summary 133 Macroeconomic overview 133 Trends 135 High proportion of young consumers driving personal care growth 135 Major producer of palm oil, a key ingredient in premium personal care products 136 Growing popularity of supermarkets/hypermarkets 136 Personal care market value and forecasts 136 Fragrances 137
  • 10. 10 Market size and growth forecast 137 Haircare 138 Market size and growth forecast 138 Make-up products 139 Market size and growth forecast 139 Male toiletries 140 Market size and growth forecast 140 Oral hygiene 141 Market size and growth forecast 141 Personal hygiene 142 Market size and growth forecast 142 Skincare 143 Market size and growth forecast 143 Chapter 11 Conclusions 145 Market opportunities 145 Category specific analysis 145
  • 11. 29 Figure 1: Leading emerging personal care markets • PC market worth $9.7bn • $53bn in FDI • High GDP- $2 trillion Russia • PC market worth $7.6bn • Highest no. of internet users • High percap spend at $154 South Korea • PC market worth $7bn • High GDP; FDI - $20bn • Wide population base Mexico • Biggest PC market - $24.7bn • Very low per cap spend China • Second largest PC market –$21bn • One of the highest FDI Brazil • Massive population • Low per capita spend India• Leading per cap spend • Leading duty free market • best infrastructure UAE Source: Datamonitor DATAMONITOR Country attractiveness on the basis of market size, per capita spend, and growth Out of the 25 countries analyzed, Argentina, Venezuela, South Africa, Brazil, Russia, and Saudi Arabia have high potential owing to more than $1.5bn in personal care market size and more than $60 in per capita spend and with at least 5% growth expected over the forecast period. All leading personal care players already have a strong presence in these countries, with their key focus on product innovation to differentiate their offerings and to stay profitable in these highly competitive countries. Countries with a low per capita spend but a high current market size (more than $1.5bn) and high growth forecast (more than 5%) include China, India, Turkey, Indonesia, and Malaysia. The low penetration of personal care products in these countries offers several opportunities to companies to extend their reach to end-users by focusing on their promotion and distribution capabilities.
  • 12. 31 Figure 2: Country attractiveness based on market size, per cap spend, and growth Personal care markets worth more than $1.5bn Countries with expected growth of at least 5% during the forecast period Countries with more than $60 as per capita spend on personal care Phi ColTha Nig Vie Arg Hun Ven UAE Sin Cze Mal Ind Tur Indo Chi Tai Pol Mex Kor Rom RSA Bra Rus Sau Source: Datamonitor DATAMONITOR Personal care market size, market growth, and per capita consumption Valued at $24.7bn, China is the leading emerging market in the personal care sector, and a growth rate of over 10% over the next five years suggests that this dominance will continue. Brazil follows with $21bn in market size and 7.2% growth forecast over the next five years. These countries are experiencing a significant transformation in their consumption of personal care products owing to rapid economic development and the increasing purchasing power of the middle classes wanting a better lifestyle and thereby demanding high quality products.
  • 13. 51 with the challenge of catering to two parallel worlds – the developed markets and the emerging ones – and are targeting the emerging countries by acquiring either local brands or launching adapted or customized products according to a particular market. Companies are also adopting more innovative marketing strategies to reach end-consumers such as e-commerce or advertising on social networks. The rising economic empowerment of the middle class in these emerging markets – coupled with greater emphasis on appearance, similar to their Western counterparts – is resulting in greater demand for cosmetic products, driving growth for the leading international cosmetic brands. Figure 14: Make-up market value ($m), growth, and per capita spend ($) by country Arg Br Chi Col Cze Hun IndIndo Mal Mex NigPhi Pol Kor Rom Rus Sau Sin RSA Tai Tha Tur UAE Ven Vie -2 3 8 13 18 23 28 33 0% 2% 4% 6% 8% 10% Percapitaspendonmakeup($) Growth forecast (2013-17) Source: Datamonitor, Market Data Analytics DATAMONITOR Make-up market value and growth Out of all make-up categories, lip make-up accounts for the highest value, valued at $4.8bn in 2012, followed by face make-up and eye make-up. Nail make-up is set to see the highest growth over the next five years, at 7.7%, whereas lip, face, and eye make-up are expected to grow at 5.7%, 5.6%, and 6.2%, respectively. The Bubble size represents market size