Centre of sectoral expertise Les Échos Études (a subsidiary of French newspaper Les Échos) has just released a study on the perfume and cosmetics market entitled Marché mondial des parfums et cosmétiques. Key statistics, players’ performance and strategies, evolution of the sector… To Les Échos, the market is rising, but involves numerous challenges that prompt companies to rethink their strategies.
Study presentation
The perfume and cosmetics market is enjoying solid fundamentals. Its growth should keep increasing in the very long term. The year 2013 does not go against the rule: although it is slowing down, the growth remains satisfactory. However, this observation should not blind us to the challenges players are facing.
• Traditional markets are not very dynamic. If new markets do conceal significant reservoirs of growth, the development strategies implemented are not risk-free: risk of failure (Coty stopped Chinese brand TJoy three years after it was bought out, Garnier and Revlon withdrew from the Chinese market…), negative mix effect (e.g. P&G group’s difficulties).
• Competitive pressure is increasing with the development and sophistication of the private brand offer, the rise in power of players positioned on low prices (Kiko, Cosnova Beauty, e.l.f), the diversification of fashion businesses…
• The negotiating power of distributors is strengthening in the mass and selective markets, as well as in the pharmaceutical sector.
• The complex and matrix product offer involves the inflation of industrial and logistics costs, as well as heavy investment in marketing and sales forces.
Several levers may be operated to stimulate growth on traditional markets (where the average buying …
