Many companies are now expanding luxury to cover the full spectrum of cosmetics products, including everything from bath products to nail varnish.
Fashion designers like Marc Jacobs and Tom Ford are also increasingly spreading their nets into the premium beauty trade.
The rise of the middle class in emerging markets also gives companies opportunities to target their products towards newly wealthy consumers.
Fflur Roberts, Euromonitor’s head of luxury research, commented: “Whilst there is nothing new about fashion houses developing their own branded fragrances, what is new is luxury fashion houses ramping up exposure across the full beauty care remit to include products such as nail polish, lipstick, eye and facial make-up, body lotions, self-tanners, even bath and shower products.”
Euromonitor’s data shows that prominent fashion designers are attempting to spread their nets further into the field of premium cosmetics.
Roberts explained: “One way or another, almost all the industry’s leading players are looking for a bigger piece of the action. Marc Jacobs has even opened a Manhattan-based store dedicated solely to cosmetics and fragrances, and, this October, Tom Ford launches his men’s cosmetics line.”
“We have recently seen the likes of Marc Jacobs, Michael Kors, Tom Ford, Tory Burch and Giorgio Armani team up with big-name beauty care players to set up their new portfolios, whilst others like Burberry have adopted more independent strategies.”
Opportunities for luxury sales
This volcanic increase in luxury sales spending results mainly from the emerging middle- and upper-class in developing countries, particularly Asia, Africa and Latin America.
Euromonitor data shows that in the Asia-Pacific region, spending on ‘super premium’ cosmetic products grew from US$5,718mn in 2008 to $7,986mn in 2013, whilst Latin American spending increased from US$350 to US$661 in the same time period.
The Middle East and North Africa have also expanded by around a third since 2008.
The nouveau riche...
The luxury market in general grew to become a US$317bn industry in 2013, with its value expected to increase by more than a third over the next five years.
An interesting fact from the study is that Nigeria- where most of the population lives on less than US$2 per day- is now the world’s fastest growing market for champagne, reflecting the growing wealth of a minority of its population.
New luxury goods database
Euromonitor is currently launching a new set of luxury goods data within their Passport market research database.
This move is part of the company’s plan to expand its global research network, which now covers 32 markets and 128 product categories.
The database will cover a variety of products including super premium beauty care, designer apparel, luxury jewelry and fine wines and spirits, and will include analysis of market trends.