Green Future: Natural Cosmetics Market in Thailandin Thailand
by Zachary Ferrara, Senior Consultant, Kline & Company
A presentation at:
October 29, 2013
www.KlineGroup.com
© 2013 Kline & Company
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Natural Personal Care: Global Market Brief
Natural Personal Care: Global Market Brief is an analysis of the global market for natural personal care products, focusing on key trends, developments, challenges business opportunities and naturalchallenges, business opportunities, and natural ratings. The research addresses such issues as:
What is the definition of "natural"? How big is the market for truly natural products?How big is the market for truly natural products? Who are the market leaders? Where are the opportunities for personal care
marketers?
Features: ingredient analysis and natural ratings
NEW! Plus, two optional in-depth companion reports, with comprehensive details and deep insights on the
t l l k t i Chi d Jnatural personal care market in China and Japan.
© 2013 Kline & Company 3
Please meet the presenterPlease meet the presenter
Zachary Ferrara, Senior Consultant at Kline’s China office
With over three years of focus on diverse consumerWith over three years of focus on diverse consumer markets across China. Fluent in both written and spoken Mandarin, he has most recently overseen market research projects for professional skin care and natural personal care products, among other p p gsegments.
© 2013 Kline & Company 4
We define “natural” as all brands that are positioned as natural, and then further segment the market into truly natural vs natural-inspiredfurther segment the market into truly natural vs. natural inspired
NATURAL PERSONAL CARE
Truly natural brands/products Natural-inspired brands/products
Skin care products Hair care products
Excludes: Back-bar products
Makeup Fragrances Oral care products Other toiletries
Prescription products
All l fi t d t th f t ’ l l (f t / t hi t ) l th i
© 2013 Kline & Company 5
All sales figures reported at the manufacturers’ level (factory/net shipments) unless otherwise noted
Asia accounts for over 35% of the global natural and organic personal care market
Sales of Natural Personal Care Products by Region, 2013
personal care market
United States
Rest of world
Asia
Europe Brazil
© 2013 Kline & Company 6© 2013 Kline & Company
Global Sales: USD 29.5 billion
(2013 manufacturers’ level)
In 2013, sales of natural cosmetics in Asia are estimated to reach over USD 10 billionUSD 10 billion
Growth of the Natural and Organic Cosmetics Market in the Asia, 2012 to 2013
USD Billion mfr11
15%
USD Billion mfr
10
15%
9
82012 2013
© 2013 Kline & Company 7
Growth: 15%
Many factors have influenced the segment in the last five years
Increased disposableIncreased
disposabledisposable incomes
disposable incomes
IncreasedIncreasedIncreased health
concerns
Increased health
concernsIncreased
urbanizationIncreased
urbanization
Consumers Consumers New channelsNew channels become more well-informedbecome more well-informed
New channels of distributionNew channels of distribution
© 2013 Kline & Company 8
Kline’s proprietary natural ratings
Kline assesses “naturally positioned” cosmetic and toiletry brands in the global market by analyzing the ingredients of an assortment ofingredients of an assortment of products from each brand. Each brand is rated on a scale of 1
to 10, with 1 being highly synthetic d 10 b i l t l t land 10 being completely natural or
organic.
Kline has segmented the global market g gbased on two categories: Brands with 1 to 4 ratings are
defined as natural-inspired.Truly natural brands include brands Truly natural brands include brands rated 5 to 10. These are formulated with a high proportion of ingredients that are considered natural/organic.
© 2013 Kline & Company 9
Definition of “Natural”
Kline assesses “naturally positioned” cosmetic and toiletry brands in the global market by analyzing the ingredients of an assortment of products from each brand. Each brand is rated on a scale of 1 to 10Each brand is rated on a scale of 1 to 10,
with 1 being highly synthetic and 10 being completely natural or organic.
© 2013 Kline & Company 10
In Asia, natural-inspired products account for 79% of the total market share of natural personal care products
Japan
Truly
China
Truly
share of natural personal care products
Trulynatural, 42%
Natural inspired, 58%
Trulynatural, 3%
Natural inspired, 97%
Asia
Trulyt l 21%natural, 21%
Natural Inspired, 79%
© 2013 Kline & Company 11
Certifying associations and organizations worldwide are working hard to regulate the naturals marketregulate the naturals market
In Asia, a harmonized standard does not exist.
Some of the brands are certified by certification bodies, such as BDIH and ECOCERT
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In 2013, the market for natural personal care pproducts in Japan experiences solid sales
growth in relatively flat economic conditions
Sales by ProductLeading Companies
1. L’Occitane2. Saishunkan3 N i
Hair care
Sales by Product
3. Noevir4. Lush5. The Body Shop
Other Toiletries
SkiMake-up
Fragrances
Oral Care
Skin care
© 2013 Kline & Company 13
China is leading the way with the highest
Growth
g y gincrease in 2013
almost 24%!
Sales by ProductLeading Companies
1. Chando2. Inoherb
Hair care
Sales by Product
3. Herborist4. Peichoin5. Longrich
Other Toiletries
Make-upFragrances
Oral Care
Skin care
© 2013 Kline & Company 14
Trends in Product Categories
In terms of value, skin care is the leading product category in the natural personal care market in Asia in 2013.
Fragrances
Oral careOral care
Makeup
Hair care
Other Toiletries
Skin care
© 2013 Kline & Company 15© 2013 Kline & Company
Asia natural cometics market, 2013 - est.
Hair care is the best performing product category in 2013
Hair care is estimated to increase by over 18%.y
Oral care is one of the least dynamic product categories b t till h lid lbut still shows solids sales growth at almost 9%.
© 2013 Kline & Company 16© 2013 Kline & Company
Market trends in Asia
Consumers switching from
naturally inspired to truly natural products
Consumers starting Local brands to purchase more
naturally positioned hair care products
beginning to market their products as
“natural”
Traditional Chinese Medicine (TCM) based products
continue to dominate the market
Foreign branded natural products
continue to experience high
growth
© 2013 Kline & Company 17© 2013 Kline & Company
Channels of distribution
Pharmacies
Specialty stores
Department stores
Pharmacies
Direct sales
Mass outlets
Specialty stores
All other
General stores
0% 5% 10% 15% 20% 25% 30%
% BreakdownT t l USD 10 4 Billi
© 2013 Kline & Company 18© 2013 Kline & Company
Total: USD 10.4 Billion
Trends in the distribution channels
Mass outlets, specialty stores, and department t ti t b
Direct sales via e-commerce websites are becoming increasinglystores continue to be
the major channels of distribution.
becoming increasingly important sales channel.
.
Health stores are still a negligible distribution of
Core users of natural d t ill ti t negligible distribution of
natural personal care products.
products will continue to buy their personal care products from trusted outlets.
© 2013 Kline & Company 19© 2013 Kline & Company
Trends in distribution channels (Continued)
Many brands who aim to A few brands in theMany brands who aim to develop higher brand value continue to sell through Department stores such as Pacific, W d d S ib
A few brands in the luxury naturals market continue to rely heavily on distribution though specialty retail stores,
Wanda, and Seibu.p y ,
boutiques, and spas.
Local and smaller brands tend to distribute more heavily through mass market channel in stores such as Walmart andsuch as Walmart and Carrefour, among others.
© 2013 Kline & Company 20© 2013 Kline & Company
Product Trends
What’s hot in natural personal care?
Natural brands changing productNatural brands changing product formulations to become more truly natural
Increasing demand for hair care products
Whitening skin care and anti-aging most popular skin care products
Makeup with natural ingredients
© 2013 Kline & Company 21© 2013 Kline & Company
The Asian market for natural personal care products is expected to show moderate growth with a CAGR almost 13% through 2018show moderate growth, with a CAGR almost 13% through 2018
USD Billion mfrUSD Billion mfr.
16
18
20
10
12
14
16
6
8
10
0
2
4
2013 2014 2015 2016 2017 2018
© 2013 Kline & Company 22
2013 2014 2015 2016 2017 2018
Increasing consumers’ interest in natural personal care will continue through the forecast period
Outlook and Opportunities
continue through the forecast period
St i th i i k t i A i ill ti tStrong economic growth in emerging markets in Asia will continue to propel natural personal care product sales
Consumers will continue more educated the difference between truly nat ral and nat ral inspired opting for the formernatural and natural inspired, opting for the former
TCM products will continue to dominate the market in China but foreign branded natural products will continue to gain market share
Mass –positioned natural brand will continue to increase their market presence in the mass merchandising channel
Anti-aging and whitening skin care products will continue to generate the highest demand in the natural personal care space in Asia
© 2013 Kline & Company 23
Related research
NATURAL PERSONAL CARE INGREDIENTS:Multi-Regional Market Analysis and OpportunitiesFocuses on natural personal care ingredients and investigates the supply and procurement practices operating within this developing market. This program is specifically designed to assist suppliers and distributors of personal care ingredients, addressing
h tisuch questions as:
What is the size of the natural personal care ingredients market by product category? What are the pricing differences for natural and What are the pricing differences for natural and
synthetic ingredients? Who are the leading natural ingredient suppliers and
what products they offer? What are the current unmet needs for manufacturers of
natural finished products? What is the outlook for natural finished products?
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Th k !Thank you!
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sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.
Anamaria BulmagaAccount Executive
Zachary FerraraSenior Consultant
Phone: +86-21-6012-6519 [email protected]
Nikola MaticNikola MaticIndustry Manager, Chemicals & [email protected]
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