This document discusses the parallel trajectories of the fashion and beauty industries from Euromonitor International. It finds that while beauty is a smaller market than fashion, the two industries have grown at a similar rate in recent years. Key opportunities for future growth are in Asia for premium beauty and in categories like men's grooming and baby/child products that have been relatively unexplored. Emerging markets represent major opportunities for expanding luxury fashion and fragrance sales. The top growth areas for premium beauty through 2018 will be skin care, hair care, and color cosmetics, concentrated in China, the US, and South Korea.

1. THE PARALLEL TRAJECTORIES OF FASHION AND BEAUTY
BEYOND BEAUTY 2014
NICOLE TYRIMOU, BEAUTY AND PERSONAL CARE ANALYST

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3. BEAUTY AND FASHION ALIGNMENT
GEOGRAPHICAL GROWTH OPPORTUNITIES
KEY CATEGORY FOCUS
FUTURE PROSPECTS

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0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2008
2009
2010
2011
2012
2013
US$ million
Apparel
Beauty
Beauty Less Than A Third Of The Total Apparel Market
BEAUTY AND FASHION ALIGNMENT

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0
1
2
3
4
5
6
7
2004
2006
2008
2010
2012
2014
% Growth
Apparel vs. Beauty Growth
Apparel
Beauty
The Parallel Lives Of The Industries
BEAUTY AND FASHION ALIGNMENT

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Luxury Fashion And Premium Beauty Grow In Alignment
BEAUTY AND FASHION ALIGNMENT
-4
-2
0
2
4
6
8
10
12
14
-40,000
-20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2008
2009
2010
2011
2012
2013
Year-on-Year % Growth
US$ Million
Designerwear
Premium Beauty
Designerwear % Growth
Premium Beauty % Growth

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Different Roots To Entry
BEAUTY AND FASHION ALIGNMENT
Collaborations
Licenses
In-House

8. BEAUTY AND FASHION ALIGNMENT
GEOGRAPHICAL GROWTH OPPORTUNITIES
KEY CATEGORY FOCUS
FUTURE PROSPECTS

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US$ 1-4Billion
US$ 7 Billion
Premium Beauty - Asia Pacific Dominates while Western Europe Rises
GEOGRAPHICAL GROWTH OPPORTUNITIES
US$ 34 Billion
US$ 20-25 Billion
4.5%
16%
4%
2.3%
0.7%
3.4%
%value growth 2013
15%

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US$ 2-5Billion
US$ 5-8 Billion
Designerwear Remains Heavily Depended On Mature Markets
GEOGRAPHICAL GROWTH OPPORTUNITIES
US$ 50 Billion
US$ 25-32 Billion
6%
9%
8%
7%
5%
1.5%
4.6%
%value growth 2013

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Consumers In Emerging Markets Have The Highest Interest For Luxury
GEOGRAPHICAL GROWTH OPPORTUNITIES

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But.. Consumers’ Interest In Luxury Fragrance Remains Universal
GEOGRAPHICAL GROWTH OPPORTUNITIES

13. BEAUTY AND FASHION ALIGNMENT
GEOGRAPHICAL GROWTH OPPORTUNITIES
KEY CATEGORY FOCUS
FUTURE PROSPECTS

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0
1
2
3
4
5
6
7
8
9
10
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Premium
Skin Care
Premium
Fragrances
Premium
Colour
Cosmetics
Premium
Hair Care
Premium
Sun Care
Premium
Bath and
Shower
Premium
Baby/Child
Products
% Value Growth
US$ million
2013US$mn
2011-12% growth
2012-13%
Slowdown In Top Two Premium Categories
KEY CATEGORY FOCUS

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Brand Loyalty In Skin Care and Colour Cosmetics prevails
KEY CATEGORY FOCUS
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Apparel & Footwear
Skin care
Fragrances
Colour Cosmetics
% of respondents
Brand Loyalty within Consumers Interested in Luxury
Loyal
Disloyal
Source: Euromonitor International Analyst Survey
Note: Showing percent of respondents interested in luxury – purchasing habits

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Fashion Brands Struggle To Make An Impact In Skin Care
KEY CATEGORY FOCUS

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High profit margins
Asia Pacific influence
Affinity to luxury
Yves Saint Laurent Or Rouge
Christian Dior Dream Skin
Dolce & Gabbana skin care
Tom Ford men’s skin care
Fashion Brands Up Their Investment In Skin Care
KEY CATEGORY FOCUS

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-1
0
1
2
3
4
5
6
-10
90
190
290
390
490
Fragrances
Colour
Cosmetics
Skin Care
Fragrances
Colour
Cosmetics
Skin Care
Christian Dior
Chanel
% Growth
US$ million
2008-13 value growth
2008-13 CAGR
The Fashion Giants Of Beauty
KEY CATEGORY FOCUS

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Fragrance
Skin Care
Colour Cosmetics
New Entries From The Fashion World
KEY CATEGORY FOCUS

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J Crew
Fragrances
& Other Stories
Beauty
Top Shop
Facial Make-Up
Apparel Brands Moving Into Beauty
KEY CATEGORY FOCUS

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Fashion Brands Launching Stand-alone Beauty Stores
KEY CATEGORY FOCUS
RETAIL

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Christian Dior took over Harrods London 2013
Chanel celebrates mother’s day London 2013
Events And Exhibitions Around The Brand
KEY CATEGORY FOCUS

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Revival of the brand with new fashion line and accessories
Puig opens new office in Paris to be closer to fashion lines
90% of sales come from fragrances
Can Success In Beauty Revive The Fashion Image?
KEY CATEGORY FOCUS

24. BEAUTY AND FASHION ALIGNMENT
GEOGRAPHICAL GROWTH OPPORTUNITIES
KEY CATEGORY FOCUS
FUTURE PROSPECTS

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US
Italy
Japan
France
China
UK
Russia
Germany
South Korea
Others
US$3.7 billion
US$1.5 billion
US$1.4 billion
The Future Of Designer Wear Stays In Mature Markets
FUTURE PROSPECTS
TOTAL in 2018 US$154 billion

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Premium Future Growth Concentrated In Three Categories
FUTURE PROSPECTS
Country
2013-18 US$ mn growth
China
4,335
US
2,970
South Korea
1,489
Brazil
805
UK
755
Saudi Arabia
731
Russia
575
Germany
399
Key absolute growth markets
$20,6billion
$6.7billion
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Absolute Growth 2013-18 US$ million
US$ million
Skin care
Hair Care
Colour Cosmetics
Fragrances
Key absolute growth categories

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0
2000
4000
6000
8000
10000
12000
14000
2013
2018
US$ million
Men’s designer wear selected top markets 20013 vs. 2018
US
France
China
South Korea
0
200
400
600
800
1000
1200
2013
2018
US$ million
Men’s premium skin care selected top markets 2013 vs. 2018
South Korea
China
US
France
Unexplored Territories – Men’s Grooming
FUTURE PROSPECTS

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Unexplored Categories - Baby And Child Specific Products
FUTURE PROSPECTS

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Key Takeaways
FUTURE PROSPECTS
Asia/China – Key white space for fashion brands in skin care
Middle East – Easy entry point for designer fragrances
USA – Holds equal potential across all beauty segments
Fashion
Beauty

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Future Issues To Consider
FUTURE PROSPECTS
Fierce Competition
Sustaining Affordable Luxury
Lifestyle Status

31. THANK YOU FOR LISTENING
Nicole Tyrimou
Analyst - Beauty and Personal Care Research
Nicole.tyrimou@euromonitor.com
@Nicole_Tyrimou