April 27, 2024
Retail & Consumer
Small beauty brands lead change in cosmetics market
[THE INVESTOR] Small but customized cosmetics brands are gaining competitiveness against bigger multinational brands, changing trends in the global cosmetics market, a report said on Jan. 13.
According to a report by the LG Economic Research Institute, small cosmetics brands with unique concepts and customized solutions for particular segments of customers are gaining popularity globally as they spread across online platforms.
“Digitalization and customization are major factors that are leading the cosmetics market to change,” said Ko Eun-ji, a researcher at the think tank. “While small, new brands are gaining a competitive edge, existing global brands are losing ground.”
The new trend is noticeable particularly on social media, where individuals share beauty tips via videos, introducing fresh and unique products made by local brands.
According to data from market research firm Euromonitor, market shares of the top 10 global beauty brands shrank from 40 percent in 2010 to 32 percent in 2015. In contrast, the market share of local brands is expanding. For example, in China, the market share of multinational skin care brands fell from about 38 percent in 2010 to 36 percent in 2015, but local brands’ share doubled from 9.1 percent to 18.6 percent in the same period.
There are about 1,000 beauty-related startups across the world, according to Crunch Base, a global startup database. As of 2015, about $389 million had been invested in the beauty startups.
“The reason for small brands’ success is that they offer simple but needed value for customers, as they act swiftly to changing customer needs,” Ko said. “Big brands need to be swift as well, while approaching consumers in a simpler and clearer manner.”
In response to the change, traditional global cosmetic brands like L’Oreal and Unilever are aggressively seeking mergers and acquisitions to maintain their competitiveness, the researcher said.
L’Oreal took over IT Cosmetics, a newly founded innovative beauty solution provider based in New York last July. Unilever acquired Dollar Shave Club, an affordable brand for grooming products in the same month.
By Song Su-hyun/The Korea Herald (song@heraldcorp.com)
According to a report by the LG Economic Research Institute, small cosmetics brands with unique concepts and customized solutions for particular segments of customers are gaining popularity globally as they spread across online platforms.
“Digitalization and customization are major factors that are leading the cosmetics market to change,” said Ko Eun-ji, a researcher at the think tank. “While small, new brands are gaining a competitive edge, existing global brands are losing ground.”
The new trend is noticeable particularly on social media, where individuals share beauty tips via videos, introducing fresh and unique products made by local brands.
According to data from market research firm Euromonitor, market shares of the top 10 global beauty brands shrank from 40 percent in 2010 to 32 percent in 2015. In contrast, the market share of local brands is expanding. For example, in China, the market share of multinational skin care brands fell from about 38 percent in 2010 to 36 percent in 2015, but local brands’ share doubled from 9.1 percent to 18.6 percent in the same period.
There are about 1,000 beauty-related startups across the world, according to Crunch Base, a global startup database. As of 2015, about $389 million had been invested in the beauty startups.
“The reason for small brands’ success is that they offer simple but needed value for customers, as they act swiftly to changing customer needs,” Ko said. “Big brands need to be swift as well, while approaching consumers in a simpler and clearer manner.”
In response to the change, traditional global cosmetic brands like L’Oreal and Unilever are aggressively seeking mergers and acquisitions to maintain their competitiveness, the researcher said.
L’Oreal took over IT Cosmetics, a newly founded innovative beauty solution provider based in New York last July. Unilever acquired Dollar Shave Club, an affordable brand for grooming products in the same month.
By Song Su-hyun/The Korea Herald (song@heraldcorp.com)
