Data projection: global market trends

17 July 2018



Using stats from GlobalData, Cosmetics Packaging Insight takes an in-depth look at changing market trends in relation to countries and brands, and assets where value will be found going forward. In future editions, we will be taking a closer look at the three biggest markets – China, Brazil and the UK – to learn more about their key drivers.


Currently, across the four key areas – ingredients, claims, labels and packaging – there are important statuses to consider. With ingredients, there is increasing demand for high-performance cosmetics that not only nourish, but address specific issues, such as hair loss, dull skin or dark spots. This has led to the emergence of products with active ingredients, vitamins and minerals. Distaste for artificial ingredients has also prompted growth in the use of natural ingredients.

Functional claims, such as UV defence and anti-ageing, are being used to make cosmetics and toiletries appealing to consumers who seek quick and effective results. Producers are also capitalising on free-from claims to build an ethically and socially conscious brand image for consumers who look for personal-care products that share their ideals. In labelling, as consumers become more savvy and aware of the numerous complex ingredients used in cosmetics and toiletries, they are increasingly reading product labels. As many as 42% of consumers pay close attention to the ingredients used in the beauty or grooming products they buy, according to recent surveys. Therefore, it becomes important for brands to provide ingredient lists – as well as allergen information – on labels.

With busy consumer lifestyles and rising usage on the go, convenient, effective and single-use pack formats have gained popularity in the personal-care industry. Manufacturers of cosmetics and toiletries are focusing on innovations such as spray-on and roll-on.

In the future, ingredients brands will increasingly incorporate superfoods, such as probiotics and products deemed to be naturally nourishing to the skin and hair. Additionally, in order to gain clean label positioning, the influence of regional beauty regimen will drive the use of ingredients such as snail essence, yogurt, argon oil, jojoba, black pine and wild rose. Future product claims will follow the clean label trend and a continued interest in organic products.

Functional claims, such as ‘pollution protection’ and ‘sweat-defence’, will see a rise, given consumers desire for efficient personal-care solutions. Ethical claims, such as ‘sustainably sourced’ and ‘vegan’, will remain in vogue, as brands try to increase their appeal across a diverse user segment. With the growing desire for simple and clean labelling, the demand for products with clear on-pack communication will gain momentum. For instance, using simple language or recognisable ingredients along with scientific names will increase product appeal and build trust through transparency.

Finally, manufacturers will continue to innovate with new formats, designs and value-added packaging features for cosmetics and toiletries, enhancing user experience. Additionally, the consumer desire to reduce household waste from packaging will spur manufacturers to focus on sustainable packaging, such as recycled materials and paperboard, as well as biodegradable plastics.

An increasing number of companies in the cosmetics and toiletries industry are hopping on the ‘green’ bandwagon, packaging their products in recycled or recyclable materials.

Grand central stats

In 2017, the global cosmetics and toiletries industry was valued at $412 billion, led by Asia-Pacific and the Americas, which accounted for value shares of 37.6 and 32.4%, respectively. An improving global economy, driven by strong economic growth in the emerging markets and the subsequent rise in disposable income levels, is the major growth driver. Skincare was the largest sector, with a value share of 28.2% in 2017, followed by haircare and make-up, which accounted for value shares of 16.9 and 11.5%, respectively.

Growth drivers across the globe

  • High participation of women in the global labour force – currently 49.5% – will continue to support growth in the industry, as women become more appearance-conscious.
  • Rising consumer confidence across major global markets, coupled with the high-spending habits of millennials, who specifically spend to improve their appearances, drive sales for cosmetics and toiletries.
  • Strong growth in the air travel industry, with international travel rising by 6.7%, and the subsequent rise in travel retail remained a major driver for luxury brands, such as L’Oréal and Estée Lauder.

Latest developments

  • An increasing number of cosmetics and personal-care companies are hopping onto the ‘green’ bandwagon, packaging their products with recycled or recyclable materials. For instance, P&G developed a recyclable bottle for its Head & Shoulders line, and Dior launched Hydra Life in lightweight glass packaging.
  • Rising consumer desire for a premium experience is driving manufacturers to use expensive and luxurious ingredients, such as gold, caviar and diamonds in their cosmetic products.

Future inhibitors

  • With governments focusing on reducing the environmental impact of cosmetics, manufacturers could be required to alter their product formulations. For instance, the Swedish Government plans to introduce legislations to reduce the use of substances such as triclosan and triclocarban in cosmetics, as they are harmful to the environment.
  • As consumers seek more information about the products they use, companies must focus more on ingredient traceability, which is challenging by virtue of the globalisation of supply chains.

Demand for transparency in ingredient labelling

Consumers increasingly demand ‘traceability’ of ingredients and an emphasis on corporate social responsibility when it comes to chemical ingredients being used in personal-care products, owing to concerns over their safety. With retail giants, including Walmart and Target, announcing new chemical policies that require suppliers to list ingredients on the product labels as well as on their websites, manufacturers of cosmetics and toiletries will be under pressure to ensure the use of natural ingredients in order to stay relevant.

Challenges of ‘natural’ formulations

As consumers grow conscious of the consequences of their choices, they increasingly pursue cosmetics with organic labels – often perceived to be safer for consumers and better for the planet. However, natural oils and esters do not deliver the same level of performance that consumers have come to expect from beauty products made with petrochemicals. Therefore, identifying natural ingredients that guarantee safety, efficacy and a long shelf life on par with synthetic ingredients continues to be a challenge for ‘natural’ formulations of cosmetics and toiletries.

Consumer desire to look ‘good from within’

As consumers begin to grasp the significance of diet in order to look their best, there is a growing demand for ‘ingestible beauty’, which poses a threat to cosmetics and toiletries as consumers seek to reduce dependence on them. In addition, mounting evidence of a strong link between a healthy gut and skin condition is driving interest in consumption of probiotic-rich foods, such as yogurt, miso and sauerkraut, deemed to revitalise the skin. This desire to look good from within could influence the way consumers use cosmetics and toiletries.

Mounting pressure

With organisations such as Cruelty Free International challenging the cosmetics industry to go cruelty free by 2021 and urging regulators to set a deadline to phase out animal testing of cosmetics worldwide, the industry is under pressure to find alternative testing methods. Furthermore, the European Court of Justice has ruled that cosmetics tested on animals outside the EU cannot be sold within the EU. This ruling puts further pressure on manufacturers to create cruelty-free products, irrespective of the intended market.

Prioritising sustainability

As consumers turn eco-conscious, given the rising awareness of the ecological damage caused by packaging waste, they increasingly demand recyclable and reusable packaging. Coupled with the rise of mandatory regulations on making resource conservation and climate protection a priority, manufacturers are under pressure to invest in ‘green’ packaging materials. With consumers not willing to pay more for ecofriendly products, manufacturers are faced with tighter profit margins owing to rising production costs from using eco-friendly materials.

How have the countries in this report been selected and scored?

GlobalData has selected the ten countries identified in this report from a pool of the top 50 economies globally. Using GlobalData’s unique ranking system, the top ten opportunities for the industry were identified.

GlobalData has created an aggregated scoring system to rank rewards and risks, and identify the top opportunity markets. Rewards are quantified by current industry value and forecast growth. Risk quantifies the potential for market disruption and uncertainty across a range of topics, including political issues, corruption, price inflation and urbanisation. The aim of this is to fully consider the attractiveness of the industry and rank it accordingly.

As the aim of this initial and ongoing report is to identify the high-potential countries, the ranking system assigns weighting factors of 70 and 30% to reward and risk analysis, respectively. The reward and risk factors are assigned further weight based on their importance. The aforementioned GlobalData opportunity score is ranked low to high, with higher scores indicating greater reward or less risk.



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