While the market for ethnic cosmetics and toiletries in the UK has grown 24 per cent since 2002, market research firm Mintel says a lack of investment is standing in the way of high potential growth.
At £65m (€90.9m) the ethnic market currently represents a small fraction of the £3.7bn UK beauty market despite the fact that the ethnic minority population has grown rapidly in recent years so that one in ten adults are now of ethnic origin.
Mintel expects the market to grow by 35 per cent in the next five years if cosmetics players wake up and respond to what the research company describes as 'one of the beauty industry's most promising sectors'.
"A lack of new product development on the part of manufacturers as well as limited availability has undoubtedly been a major barrier in the ethnic beauty market," said Mintel analyst Alexandra Richmond.
She said ethnic beauty products have yet to make major inroads on the mass market despite clear demand for products specifically designed for ethnic consumers.
Ethnic cosmetics join other niche products such as anti-agring creams for different age groups and shampoos for different hair types that have hit the cosmetics market in recent years.
Although other experts in the cosmetics industry have predicted a decline in the demand for highly specialized cosmetics, Richmond said the industry should apply this targeted approach to attract black and Asian consumers.
Mintel also criticized the current marketing and packaging of ethnic cosmetics for under investment and limited innovation.
The industry spent only £150,000 on marketing for ethnic beauty products in the UK last year compared to £45m for the marketing of make-up in 2005.
This lack of investment translates into stale and outmoded marketing with many brands featuring an out of date American look with white teeth and big hair on the packaging.
"Re-branding and re-packaging could help ethnic brands compete with mainstream products not just in terms of winning the ethnic pound, but also by enhancing product credibility," said Richmond.
