Global Beauty and Personal Care Euro Monitor 2011

The year in review and winning strategies for the future

1

GLOBAL BEAUTY AND PERSONAL CARE: THE YEAR IN REVIEW AND WINNING STRATEGIES FOR THE FUTUREIRINA BARBALOVA 29-31 MARCH 2011, IN-COSMETICS, MILAN

Euromonitor International


2

Beauty beyond the crisisIndustry dynamics New positioning and value perceptions The beauty brand as an experience The Outlook


The year in review and winning strategies for the futureBEAUTY BEYOND THE CRISIS

MOVING OUT OF THE RECESSIONReal GDP: % growth over previous period, annualised10

3

% growth

5

0-5 -10 2008 2009 2010 2011 Q1 2006 Q4 Q1 2007 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q2 Q3 World Advanced economies Developing economies

Retailing Growth10

% value growth

8 6 4 2 0 -2 Retailing 2005 2006 2007 2008 2009 2010 Euromonitor International

Grocery Retailers

Non-Grocery Retailers

Non-store Retailing

BPC Non-store sales


WESTERN EUROPE CONSUMER EXPENDITURE SLOWEST TO RECOVER1510 % growth (US$)

4

50

-5

2006-07

2007-08

2008-09

2009-10

-10

-15Health Goods and Medical Services Alcoholic Beverages and Tobacco Clothing and Footwear Personal Care Food and Non-Alcoholic Beverages



MORE HURDLES TO BE OVERCOME

5

Number of countries with an unemployment rate above 10% in 2007

14

Number of countries with an unemployment rate above 10% in 2010

25


Source: Euromonitor International from national statistics Data refer to 80 major economies


THE CONSUMER IN 2011 AND BEYOND

6

Nuanced luxury

Valueseeking

The postrecession consumerExperiencefocused Staying ahead and well Euromonitor International

Digital and connected


7



The year in review and winning strategies for the futureINDUSTRY DYNAMICS

GLOBAL INDUSTRY RECOVERS FROM THE SLUMP400,000 350,000 300,000 US$ million 250,000 200,000 3 150,000 100,000 50,000 0 2005 Total BPC Euromonitor International

88 7 6 5 4

2 1 0 -1 2006 2007 2008 2009 2010 % Mass growth

% Total growth

% Prem growth

% Value growth


2010 COUNTRY PERFORMANCE 2010 Country performance

9



PREMIUM COSMETICS ON THE REBOUND

10

9% 1%

1%2%

12%

11%1%



PREMIUM MARKET SHARE STILL LOW IN LATIN AMERICA

11


Mass Cosmetics Premium Cosmetics


MASS COSMETICS TO DRIVE FUTURE GROWTH100 90 80

12

76%

72%

% value (US$)

70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Euromonitor International

28%

24%

Global Premium Cosmetics

Global Mass Cosmetics


TOP CATEGORY BY REGION

13



DISCRETIONARY CATEGORIES PICK UP2010 US$mn 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 08-09 % growth 09-10% growth 9 8 7 5 4 3 2 1 0 % value growth 6

14

US$ million



15



The year in review and winning strategies for the futureNEW POSITIONING AND VALUE PERCEPTIONS

PRIVATE LABEL PICKS UP MARGINALLYPrivate label share 14Germany

16

12

% value share

10 8 6 4 2 0 2006 2007France United Kingdom

Spain

Global PL growth by category

Colour Cosmetics (+10%) Mens grooming (+10%) Skin Care (+8.5%) Oral Care (+5.6%) Hair Care (+4.4%) Bath & Shower (+0.5%)

2008

2009USA

2010

Euromonitor International World

Germany Spain


PRIVATE LABEL KEEPS UP THE PACE IN INNOVATIONTapping into budget and high end linesFocus on product efficacy and ingredients Increasingly green savvy Diversifying existing lines

17



INNOVATION IN BRANDS STILL A PRIME FOCUSScientifically-advanced innovation New concepts and professional status Time-saving vs long-lasting beauty

18

Building on successful brands



NEW POSITIONING IN SKIN CARE

19

Category cross- over Euromonitor International

New consumer targets

Holistic skin care

Increased polarisation


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The year in review and winning strategies for the futureTHE BEAUTY BRAND AS AN EXPERIENCE

INTERNET CONTINUES TO RESHAPE THE WORLDMore than 40% of the worlds population will be on the Internet in 2020 % of world population 50 40 % of worlds Internet users 30 20 10 0 Half of all Internet users will be in Asia Asia 100% 90% Rest of world

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80% 70%60% 50% 40% 30% 20% 10% 0%

2000

2010

2020

711 millionChinese Internet users in 2020 Euromonitor International

281 millionUS Internet users in 2020

2000

2010

2020


INCREASING IMPORTANCE IN BEAUTY RETAILINGGlobal Beauty Channel Breakdown 80 70 60 % value share12.4 14 15.3 16.1

22

12.9 9.7 13.4

12.8 9.5 13.4

5010.6

40 30 20 10 0 2005 2006 2007 Drugstores Super/Hypermarkets 2008 2009 201026 27 26.9 13.1


Non-Store Retailing Beauty Specialists

Department Stores


VARIED PENETRATION ACROSS KEY MARKETSBeauty Internet Retailing Top Five Markets 9 8 % share of total retail sales 7 6

23

54 3 2 1 0 S.Korea France USA UK Japan



NEW WAYS OF ENGAGING WITH BEAUTY CONSUMERS

24

Social Media

Mobile Technology Euromonitor International

New In-store Experience


25

500 million 30 billion

Facebook users Pieces of content per month

700 billion130 62% 50%

Minutes of log-in time per month Average friends per user Of users between the age of 18-34 Users of Facebook are female Registered tweets per day

55 million



ONLINE PRESENCE AND SOCIAL MEDIA NOT TO BE IGNORED 26Key players increasing online presence Opportunities for smaller brands Social commerce still limited

Blogging/vlogging offer new experience

1,614,613 people like this



THE POWER OF THE SMARTPHONE APPKey success factors: Personalised Added value Interactive experience Real-time updates

27



WHERE NEXT FOR VIRTUAL CONNECTIVITY?

28



IN-STORE BEAUTY EXPERIENCE VITAL FOR THE INDUSTRYBeauty services challenged by at-home beauty Creating value is key

29

Retailers enriching the in-store experienceFastest Growing Beauty Sectors 2009-10 (value) Nail Polish Mens skin care Mass fragrances Sun protection Anti-agers Colourants Eye liner/pencil Blusher/bronzer Euromonitor International

(+17%) (+12%) (+9%) (8.5%) (7.6%) (+7%) (+7%) (+7%)


RE-CREATING THE SPA EXPERIENCEInnovative retail concepts Mobile beauty becomes prominent Health and wellness factor to drive interest in spas New consumer targetsKey Spa Tourism Markets, absolute growth 2010-15 (million) USA Japan China France Israel India Austria Euromonitor International Vietnam US$ 1,660 US$ 1,350 US$ 1,030 US$ 856 US$ 362 US$ 363 US$ 266 US$ 221

30


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The year in review and winning strategies for the futureTHE OUTLOOK

GROWTH TO CATCH UP WITH PRE-RECESSION LEVELS

32



CONSUMER NEEDS BECOMING MORE DIVERSE

33

Value

Efficacy

Personal touch Euromonitor International

Experience


BEAUTY INTERNET SALES TO BECOME MORE COMPETITIVE 34Beauty Internet Sales 2010-15 16,000 14,000 12,000 US$ million 10,000 8,000 6,000 40 35 30 25 20 15

4,0002,000 0

105 0


2010

2015

2010-15 CAGR


GLOBAL GROWTH TO BE DRIVEN BY MASS BEAUTY

35

Mass Fragrances Mass Colour Cosmetics Mass Skin Care Premium Hair Care Mass Hair Care Premium Skin Care

Premium FragrancesPremium Colour Cosmetics Euromonitor International

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

% value growth (real terms)


MORE OPPORTUNITIES TO BE HAD IN PREMIUM SKIN CARE12,000 20

36

18 10,000US$ million (nominal) 8,000 6,000 4,000 2,000 0 Euromonitor International

16

1412 10 8 6 4 2 0 -2 % value growth

2010USA

2011Japan

2012

2013

2014

2015Japan growth

China

China growth

USA growth


2X80%BILLION

37

Chinas premium cosmetics market will double by 2015, to reach $7billion

of Latin Americas industry value will be accounted for by mass products in 2015

$83 Euromonitor International

Latin America industry value in 2015, third largest region globally


38

THANK YOU FOR LISTENINGIrina Barbalova, Head of Beauty and Personal Care Research [email protected]

Q&A? Euromonitor International

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Global Beauty and Personal Care Euro Monitor 2011

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