Report predicts slower growth, saturated markets for UK cosmetics industry
The study, by companiesandmarkets.com, suggests that industry revenue will increase at a compound annual rate of 0.6 per cent from 2014-19, down from 1.2 per cent from 2009-14.
Revenue is also expected to contract from 2013-14 by 0.8 per cent, due mainly to an anticipated reduction in demand from the 15-44 female age group.
The report notes important industry opportunities over the next 6 years, including new technologies and an increase in the over-65 population, which is expected to drive sales of anti-ageing products.
Challenging forces
The British cosmetics industry is currently facing challenges including a mature, saturated market with many competing brands, high competition and globalization and anticipated volatility in the dollar/pound exchange rate over the next two years.
Other key features include the twin trends of consolidation and targeting emerging markets, which has sometimes led to the establishment of facilities in those regions at the expense of British facilities and subsequently a fall in employee and enterprise numbers.
On the positive side, the company also highlights:“the willingness of UK consumers to buy an increasing range of complex formulated products, multifunctional products and green products, which are expected to become more mainstream.”
Technology, including nanotechnology, is predicted to continue to be a key driving force for the industry, with consumers increasingly willing to buy specialty and complexly formulated items.
British industry highlights
The report outlines particular strengths of the industry, including product innovation and diversification to target new market sections.
One example given is manufacturers incorporating features beyond beauty treatment into their products, including vitamins and low-grade tanning properties in moisturizers.
Companiesandmarkets also point out the increasing use of “eco-ethical” products and natural and organic products as a response to sophisticated consumer tastes and the rise in the ethical consumer movement.
Retail and manufacturing
A key feature of the industry is the gulf between the retail and manufacturing sections of the industry, with the total retail cosmetics and toiletries market valued at £8bn but the manufacturing section only making up a small fraction of the value.
Companiesandmarkets attributes this difference partly to the global focus of cosmetics markets, noting that the industry is strongly reliant on international trade.
Skin care products dominated sales, with a total market share percentage of 30.5 compared to the next most prominent product, soap shower and bath items at 18.7 per cent.
