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A Study of the European Cosmetics Industry

A Study of the European Cosmetics Industry

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Sections

  • Introduction and Structure of the Study
  • I.1 - Market Sizes
  • I.2 - Per Capita Cosmetics Consumption
  • I.3 - Market Segments
  • I.4 - Main Product Trends
  • Market Size and Main Product Trends - EU158
  • Market Size and Main Product Trends – EU 1210
  • I.5 - Country Summaries
  • Market Size and Main Product Trends – Europe
  • Market Size and Main Product Trends – United States89
  • Market Size and Main Product Trends – Japan96
  • Market Size and Main Product Trends – China99
  • I.6 - Market Size Forecast
  • Methodology
  • Results
  • I.7 - Structure of Industry and Production
  • Production Value Comparison
  • Comparison to the Overall Manufacturing Industry
  • Employment and Structure of Companies
  • Purchase of Intermediate Goods and Services
  • Unit Labour Costs
  • Labour Productivity
  • Number of Small and Medium-Sized Enterprises
  • II. Nature of Competition
  • II.1 - Key Global Cosmetics Industry Players
  • Implications for Corporate Strategy
  • II.2 - Barriers to Entry
  • Government Regulations
  • Impact of EU Regulation on Trade
  • Animal Testing
  • Research and Development
  • Patents
  • Trade Barriers
  • Market Structure and Penetration
  • Customer Loyalty and Advertising
  • Distribution Channels
  • Investment Costs
  • Economies of Scale
  • Cultural and Language Barriers
  • III. Sources of Competition – Case Studies
  • III.1 - Medical Devices and the Pharmaceutical Industry
  • Skin Rejuvenation
  • Botox
  • III.2 - SME Case Studies
  • The Body Shop
  • Natural Cosmetics
  • Direct Selling Case Study
  • IV. Key Policy Issues – R&D and External Trade
  • IV.1 - Research and Development
  • Recent Innovations in Skin Care
  • Recent Innovations in Hair Care
  • IV.2 - Intellectual Property / Patents
  • IV.3 - Counterfeit Goods
  • IV.4 - External Trade
  • Revealed Comparative Advantage (RCA) Analysis
  • RCA Analysis: Cosmetics Product Comparative Positioning
  • Cosmetics Exports Overview
  • Import/Export Statistics
  • VI. Appendix

A Study of the European Cosmetics Industry

Final Report

Prepared for: European Commission, Directorate General for Enterprise and Industry Prepared by: Global Insight, Inc.

October 2007

Contact Information

Emilio Rossi Managing Director Business Planning Solutions, Europe Global Insight, (Italy) srl. Via S. Maria Segreta 6 20123 Milan +3902 8648 130 emilio.rossi@globalinsight.com Antonia Prlic Principal 1 Adelaide Street East Suite 2505, P.O. Box 198 Toronto, Ontario, M5C 2V9 Canada +1 416 682-7312 antonia.prlic@globalinsight.com Robert Hoffman Senior Consultant 1 Adelaide Street East Suite 2505, P.O. Box 198 Toronto, Ontario, M5C 2V9 Canada +1 416 682-7311 robert.hoffman@globalinsight.com

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Table of Contents
INTRODUCTION AND STRUCTURE OF THE STUDY........................................... 1 I. BROAD MARKET STUDY - MACRO/MICROECONOMIC CHARACTERISTICS...................................................................................................... 2 SUMMARY ........................................................................................................................ 2 I.1 - MARKET SIZES ......................................................................................................... 3 I.2 - PER CAPITA COSMETICS CONSUMPTION ................................................................... 5 I.3 - MARKET SEGMENTS ................................................................................................. 7 I.4 - MAIN PRODUCT TRENDS ........................................................................................ 14 Market Size and Main Product Trends - EU15 ........................................................ 14 Market Size and Main Product Trends – EU 12............................................................ 18 I.5 - COUNTRY SUMMARIES ........................................................................................... 21 Market Size and Main Product Trends – Europe........................................................... 21 Market Size and Main Product Trends – United States................................................. 47 Market Size and Main Product Trends – Japan ............................................................. 51 Market Size and Main Product Trends – China............................................................. 53 I.6 - MARKET SIZE FORECAST ........................................................................................ 54 Methodology .................................................................................................................. 54 Results............................................................................................................................ 55 I.7 - STRUCTURE OF INDUSTRY AND PRODUCTION ......................................................... 58 Production Value Comparison....................................................................................... 58 Comparison to the Overall Manufacturing Industry...................................................... 60 Employment and Structure of Companies ..................................................................... 61 Purchase of Intermediate Goods and Services............................................................... 62 Unit Labour Costs .......................................................................................................... 65 Labour Productivity ....................................................................................................... 65 Number of Small and Medium-Sized Enterprises ......................................................... 69 II. NATURE OF COMPETITION......................................................................... 71

II.1 - KEY GLOBAL COSMETICS INDUSTRY PLAYERS ..................................................... 71 IMPLICATIONS FOR CORPORATE STRATEGY ................................................................... 76

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................................................................................................................................... 92 III................... 84 Trade Barriers ............................. 82 Animal Testing..................................................................................................COUNTERFEIT GOODS .................................................................................................................................................................................................................. 84 Market Structure and Penetration ........................ 79 Government Regulations ....................................................................................................................................EXTERNAL TRADE ..... 92 Skin Rejuvenation......................BARRIERS TO ENTRY .......................................... 82 REACH .. 103 IV..................................................................II........................................ 91 III..................RESEARCH AND DEVELOPMENT .................................................................................................................... 95 Natural Cosmetics........INTELLECTUAL PROPERTY / PATENTS ................................................................... 86 Distribution Channels .................................................. 87 Investment Costs........ 90 Economies of Scale.................2 ................ 92 Botox.................... 109 Revealed Comparative Advantage (RCA) Analysis........................................................................................... 83 Patents .................MEDICAL DEVICES AND THE PHARMACEUTICAL INDUSTRY........... 91 Cultural and Language Barriers................ 85 Customer Loyalty and Advertising..................................................................... 96 DIRECT SELLING CASE STUDY ............................................................................................................... SOURCES OF COMPETITION – CASE STUDIES ........................ 109 Cosmetics Exports Overview.....................................................................................SME CASE STUDIES....................... 100 Recent Innovations in Skin Care ..................................................................................... 98 IV.............. 110 4 ......................................................... 94 III............. 101 Recent Innovations in Hair Care................................................................................................... 82 Research and Development.......................................................................................................................1 ....1 .................................................................. 79 Impact of EU Regulation on Trade.................. KEY POLICY ISSUES – R&D AND EXTERNAL TRADE.. 109 RCA Analysis: Cosmetics Product Comparative Positioning ............................................................................................................................................2 .........................................................2 ....................................................................................................................................................................................................................................................................... 107 IV............................................4 ................................. 95 The Body Shop ...................................................................................... 101 IV.............................................................3 ............................ 100 IV.........

.......... 126 V............................. 157 APPENDIX.. VI............... 159 5 .......................................................................................................................... CONCLUSIONS AND POLICY RECOMMENDATIONS ..................................IMPORT/EXPORT STATISTICS........

options. Section II delves into the nature of competition in the industry. productivity and industry purchases of intermediate goods. The role of SMEs in the cosmetics industry is examined through various case studies. trade barriers. based on the analysis in the previous chapters. U. we apply the well-known economic concept of comparative advantage to international trade data at the product level.. including unit labour costs. Japan. The structure and competitiveness of the cosmetics industry is considered here. economies of scale and others. and perfumes and fragrances. The largest players in the global industry are profiled.Final Report . In addition. This section will also examine both macro and microeconomic trends and aspects of the cosmetics market in each country. Section III investigates sources of competition specifically alternative approaches to skin care presented by the medical devices and pharmaceuticals industries. including R&D activity conducted by firms manufacturing cosmetics. and five-. Because product innovation can increase export success. decorative cosmetics. more generally. ♦ ♦ ♦ ♦ 1 . The main policy issues. and recommendations are identified and presented with regard to preserving and enhancing innovation in the European cosmetics industry and. its ability to compete in the world market. market structure. and twenty-year market forecasts are presented for each country. ten-. Section V proposes strategic recommendations to the European Commission on policy options for the sector. Competitiveness is analysed by looking at trends in key indicators.S. The objective here is to highlight the contributions of SMEs to the process of innovation. This is followed by an evaluation of potential barriers to entry including regulatory environment. and the number of patents filed on cosmetic products in each country.September 2007 Introduction and Structure of the Study ♦ Section I of this report is a broad market study of the cosmetics industry in the EU. and provides an overview and sizing of the cosmetics industry in the countries under consideration. Section IV examines different aspects of innovative activity in the cosmetics industry. assessing the following major product segments: toiletries. distribution channels. each country's trade balance in cosmetics products is presented and trends in that balance are examined. hair care. Per capita spending on cosmetics in each country is examined. and China. skin care.

Per Capita Spending The data on per capita cosmetics spending by country reveal that the average among the EU27 countries is €128 per year. and decorative cosmetics have roughly equal shares. Italy (€8. followed by Spain at €169 and France at €166. and decorative cosmetics cover the remaining market share. Market Segments The broad market segments considered in this study include: toiletries. Anti-aging creams and anti-cellulite skin care products are in high demand among an aging population in the developed countries. and hair care.7 billion.Macro/Microeconomic Characteristics Summary This chapter provides an overview of the broad cosmetics industry (also referred to as the cosmetics and toiletries (C&T) industry) in the EU. and €8.. there was strong growth in the high per capita consumption countries like Denmark.S. In most countries. and €24 in China. valued at €11.Final Report . fragrance perfumes. Using a correction for purchasing power parity1.4 billion).2 billion in the U. followed by France (€10. There is also a widespread and growing 1 A measure of the long-run equilibrium which determines the exchange rate that equalizes consumers' buying power on a given basket of goods and services across the countries considered. Broad Market Study . while hair care. and toiletries each occupy a market share of roughly 25%. skin care. toiletries dominate the cosmetics market with a 32% share.8 billion). as well as some common across the board. and the U. In contrast. France and Germany. decorative cosmetics. Germany has the largest cosmetics market. per capita cosmetics spending was €174 in Japan. The total EU27 cosmetics market was valued at €63. there was sluggish per capita consumption growth in two of the large European markets. and Spain (€7. Buying Patterns and Shifting Trends The study found unique trends in buying patterns in particular countries. the U. hair care. Skin care has a decidedly more dominant market share in both Japan (40%) and China (39%).September 2007 I. and Norway.. respectively. Over the period 2000-06. while fragrance perfumes account for 15%. skin care.S. €23. skin care. there are growing concerns about skin cancer and exposure to harmful rays that has led to the growing use of sun care products. Among the EU countries.2 billion in China.4 billion). and somewhat better performance in Italy and the United Kingdom. and fragrance perfumes are somewhat less important.S. Spain. compared to €38.5 billion in 2006. Denmark and Sweden have the highest consumption of cosmetic products at €171. 2 .K. China. Spending per capita is low in Greece and Portugal at just €121 and €104. Among the EU countries. Japan.7 billion in Japan. Sweden.S. In the U. (€10 billion). €127 in the U.

3 . criteria. We caution that the data represented in this report should be interpreted as illustrative only. because of differing definitions.S. there is a growing trend towards so-called "masstige".K. such as self-tanning lotions and creams. the EU27 countries consumed €63 billion worth of cosmetics. – making up approximately 70% of the total market at retail sales prices. and company reports. and methodologies for collecting and reporting data. or premium.. Data Sources The data sources for this project include national and official statistics. growth. with the five major EU countries – France.Final Report . Spain.Market Sizes Europe Table 1 represents the size of the cosmetics market in Europe and the share of that market in each country. This is especially notable in the skin care segment. partly because current per capita spending on cosmetics is starting at a very low base. are growing in popularity. and Euromonitor is the main source for Eastern European countries. Italy. as well as the U. and potential in the individual countries and the overall marketplace. and the U. but we remain confident that it will provide a useful overall picture of competitiveness. The study also found that technologically advanced products. Norway and Switzerland).September 2007 diversity of cosmetics products for men – especially men's fragrances – and a growing demand for natural / organic products in most countries.2 In the higher-income countries. The declining birth rate in many countries has led to a drop-off in demand for baby care products.S. The Japanese market is expected to grow strongly over the next five years (8% compounded annually). although it covers 21% of the 2 COLIPA – The European Cosmetic Toiletry and Perfumery Association. I. Germany.1 . Growth Forecasts Global Insight's Global Consumer Markets product. The cosmetics market in the new EU members will grow at a faster pace (8.8%). and China. industry associations. China is seen as the fastestgrowing market. Brussels – also referred to later in the study. European Cosmetic. The U. is the slowest-growing market for cosmetics (annual growth below 3%). Considerable care must be exercised when comparing what appear to be identical concepts across these data sources. Toiletry & Perfumery Market Overview: 2005. which rigorously models and forecasts consumer spending activity based on a consistent set of drivers for all countries. was used to forecast the cosmetics market in this study. COLIPA is the main source for market data among the Western European countries (EU15. It is interesting to note that the cosmetics market of the 12 new members of the European Union (EU12) represents only about 9% of the EU27 total.6% compounded annually) than the EU15 countries (3. Japan. with significant growth potential. with more moderate growth expected after 2011. market intelligence firms. brands sold at lower prices. In 2006.

7% Latvia 93 0.993 15..2 billion.4% Estonia 85 0.3% Spain 7.3% Finland 758 1.S. the U. while Japan's was €23. Table 1. respectively.344 2.8% Slovenia 162 0.2 billion.0% Germany 11.S.7% and 3. Japan.7% Denmark Czech Republic 840 1.9%.5% Hungary 630 1.1% Austria 1.291 2.586 90.8% Bulgaria 172 0. they increased by 2. respectively.3% Poland 2.889 9.1% Sweden 1. Millions of € Share of Share of Country Market size Country Market size Total Total 928 1.8%.0% Switzerland 1568 Portugal 1.475 Romania 655 1.552 2.1% Greece 1.3% Belgium/ Luxembourg 1.713 18. In local currency (LC) terms.S.442 11.4% Ireland 567 0.0% France 10.Final Report .7% Slovakia 423 0. the U.793 13.5% EU15 57. COLIPA Statistics Working Group U. Millions of € 2006 Country Market Sizes and their Shares of the Total. In euro terms.1% Malta 59 0. over the same period. in 2006. According to Euromonitor.September 2007 population – which indicates that most likely the new member states should be viewed as the most promising markets. the Chinese cosmetics market and the EU12 countries have been the most dynamic.105 1. Meanwhile. and Japan combined. the EU15 market has grown on average by about 3%. growing at a compound annual growth rate of 4.9% Cyprus 179 0. During this time.7% Italy 8.7 billion and China's €8.7% Lithuania 177 0.7% Norway 1. cosmetics market was €38. and China Europe's market size is almost as large as the U.9% United Kingdom 9. although this is mostly due to a depreciation of their currencies vis-à-vis the euro.2006 Country Market Sizes and their Shares of the Total. 4 .720 2.2% EU27 63. Retail Sales Prices. and Japan have decreased on average by about 4.416 3.5%. respectively. Retail Sales Prices.022 Source: Euromonitor.3% EU12 5.S. over the 2001-06 period.3% Netherlands 2.437 3.440 16.3% and 1.6% and 5. over the 2000-2006 period.

2 . 43% Japan. 1% EU15. Denmark moves from first place in the EU15 to nineteenth. dollar purchasing power parity (PPP) exchange rates.Final Report . In order to obtain the latter. reflecting a lower price level and higher purchasing power than their euro-denominated per capita spending would suggest. and Spanish consumers. The EU15 average spending per capita in 2006 was €150. 2006.Per Capita Cosmetics Consumption This section analyses the per capita consumption patterns of the countries under review.9. as the Danish krona is overvalued relative to the euro. per capita consumption in local currency units (LCU) was multiplied by the ratio of the spot to the PPP exchange rate (both in LCU per USD). Japan C&T Market Sizes. China.0.2. 8. Norway falls into thirteenth place overall. Total market €136. 23. Norway and Switzerland have exceptionally high per capita spending. 4% China.Europe. due to its elevated price level and overvalued currency. Country rankings do not change significantly when compared in terms of purchasing power parity. Table 2 depicts per capita spending on cosmetics in the EU27 countries. 17% US. over the 2000-06 period.6.7. with a few exceptions: Greece and Italy move up. Retail Sales Price. presented in euro values as well as in euros at U. 5. Swedish. 38. 1. the biggest spenders are Danish. per capita consumption growth was sluggish in two of the large European markets. COLIPA Statistics Working Group I.S.S. France and Germany. 57.2. 6% Switzerland. In euro terms.. and somewhat more dynamic in 5 . Among the EU15 countries.6. U. 1. The Netherlands on the other hand.September 2007 Figure 1 .2 billion EU12. 28% Source: Euromonitor. with the lowest per capita spending in Portugal. moves down in ranking due to its higher price levels. 1% Norway. but in purchasing power terms.

September 2007 Italy and the U.1% Hungary 63 8.6% EU12 57 6.Per Capita Consumption by Country –Europe C&T e x penditure CAGR Country pe r ca pita (€).4% Slovenia 81 6.2% Source: COLIPA Statistics Working Group. Malta is second at €144.7% Slovakia 78 6.1% Romania 30 9.3% Czech Republic 82 11. with €82 and €81.5%.4% Lithuania 52 8.Final Report . At the very bottom of the list are the two newest members of the EU. Table 2 . Romania and Bulgaria.7% Netherlands 149 2.5% Malta 144 2.4% Italy 149 2. Sweden..3% United Kingdom 165 2.5% Belgium/Luxembourg 164 3.9% Latvia 40 3.9% Poland 63 4.1% Switzerland 211 0.7% Bulgaria 22 7. the rankings remain relatively unchanged.1% Germany 142 1. By far the largest per capita cosmetics spender is Cyprus3.K.7% Spain 169 4. which both grew on average at 2.9% Finland 144 5. Spain.8% EU15 150 1.2% Sweden 171 4. 2006 2000-2006 Norway 219 5. respectively. reflecting a lower price level in these countries. and Norway.7% Portugal 104 2.7% Estonia 63 6.9% Greece 121 4.3% France 166 1. 3 Cyprus and Malta values are modelled and should thus be analysed with caution 6 . with the Czech Republic and Slovakia following at a distance.7% Cyprus 212 -1. In purchasing power. there is greater divergence in per capita spending terms.2% Denmark 171 4. 2006 131 233 144 119 139 153 138 137 139 129 116 133 187 120 121 99 124 118 145 131 162 108 130 96 99 83 47 62 98 132 124 ranking by PPP e x penditure 13 1 6 19 7 4 9 10 8 15 21 11 2 18 17 23 16 20 5 12 3 22 14 25 24 26 28 27 In the new member states of the European Union.9% EU27 128 2.5% Austria 156 2.0% Ireland 133 2. at €212. There was strong growth in high per capita consumption countries like Denmark. and show that the new member states have higher purchasing power than their euro-value consumption levels would suggest. Euromonitor C&T e x pe nditure pe r ca pita (€) a t US$ PPP.

Figure 2 depicts the importance of each product in the overall cosmetics market in Europe. although in purchasing power terms this increases fourfold as a reflection of its heavily undervalued currency. and toiletries. China has the lowest level of cosmetics consumption per capita. Japan. both in euro values and at purchasing power exchange rates. decorative cosmetics. as does their performance.Per Capita Consumption by Country. hair care.0% 186 -4. 2006 2000-2006 6 4. skin care.S.5% 127 -3.3 . COLIPA Statistics Working Group Among the markets analysed. Toiletries. U. Japan has the highest per capita expenditure on cosmetics and toiletries. with the only difference being that toiletries have a relatively higher importance at the expense of hair products. 4 See Appendix for the components of the five categories 7 . I.September 2007 Table 3 . while fragrance perfumes are 15% and decorative cosmetics are 12%. 4 The importance of these categories in the consumption baskets of the markets under review differs..Market Segments The following section analyses five distinct categories in the cosmetics industry: fragrances and perfumes. and skin care products each represent about 25% of the overall market in Europe. 2006 24 174 127 132 98 124 Source: Euromonitor. The EU12 consumes a similar mix of cosmetics.Final Report .8% 150 1.2% C&T ex pe nditure pe r ca pita (€) a t US$ PPP.8% 128 2. China Country China Ja pa n US EU15 EU12 EU27 C&T e x penditure CAGR pe r ca pita (€).9% 57 6. hair care. As the data come from two different sources – COLIPA for the Western European countries and Euromonitor for the rest – small differences may exist in the components included in the categories.

28% Decorative Cosmetics. Western Europe.3% Lithuania 7.3% Estonia 5. Table 4 . 12% Fragrances.5%.5% 4.12. 0. 15% Toiletries. 15% Decorative Cosmetics.Final Report .C&T Market Shares by Product Category. Retail Sales Price. however.3% Latvia 2.2% Malta 3.2% Czech Republic 11.9% 4.9.3%.6% 4. Euromonitor Where the two markets differ is in terms of their growth patterns.1% 0. at an annual average rate of 11.62.1% 8. 7.7 billion. 2006. 24% Skin Care.69.90. 23% Hair Care. 16.1.5% Slovenia 6. followed by Romania at 9%. Total market = €62.6% Poland 4. EU12. Billion €.4% Cyprus 0.7. 14.7% 5. This removes the effect of currency movements from the calculation and is a more accurate reflection of the performance of individual markets in retail sales terms.56. Over the 2000-06 period.September 2007 Figure 2 .0% 19. and Hungary at 8.7% Hungary 8. While the developed countries of Europe experienced moderate growth in private 5 Values for Cyprus and Malta are modelled 8 . 12% Toiletries. and Hungary at 8.9 billion Fragrances Perfumes. 1. 1. The EU12 outpaced Western Europe's cosmetics and toiletries market growth by almost 4% in euro terms. This ranking changes. the Czech Republic grew the fastest. 26% Source: COLIPA Statistics Working Group.8% Slovakia 6.4% 6. 1.1%. Total market = €5.EU12 C&T Market Growth5 CAGR 2000-2006 CAGR 2000-2006 Country Euro term s LC te rm s Bulgaria 6. 9. Romania grew on average by almost 20%.5% Source: Euromonitor Differences in growth patterns can be explained by developments in the two regions.5% 6.7.5% 7.0% Romania 9. 26% Hair Care.9% 9.3.5% 6.5%. With this in mind. when growth in local currency is considered. 2006. 14. 19% Skin Care. followed by Slovenia at 9. 0.

48% 1.89 6.0% 11.4% 1.8% 6.4% 0.3% 3.5% 2.61% C&T as a % of total consumption 2001 2002 4. as the economic environment has become more favourable.87 5.5% 1.67 4.4% 0.97% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 55.5% 0.1% 3.16 57. over the 2000-2006 period.9% 8.9% 0.1% 3.08 3. This development is in part due to increased use of sun care products.4% 1.2% 3.2% -0.9% 13.2% Total population Y/Y growth rate 1.93% Source: COLIPA Statistics Working Group.Final Report . as the European population ages and more effective formulations come to market.2% -0.2% -0. the more dynamic EU12 have grown much faster due to rising incomes.September 2007 consumption and per capita disposable income leading to sluggish growth in cosmetics consumption. Skin care led both markets in terms of growth. Anti-aging creams also take a leading role.59 Y/Y growth rate 4.1% 1.2% 3.65 60.6% 1.4% 0.9% 4.3% 0. most notably in the EU15.6% 5.0% -1.51 4.9% 0.57% 1.1% 0.42 52.6% 3.9% 0. registering the fastest growth since 2001.2% 1.4% 0.52 57.75 10.0% 1.7% 8.7% 6.2% -0. growth in the EU15 has picked up strongly in 2006.2% 1.3% 6.3% 0. boosting their overall consumption.52% 2003 2004 2005 2006 CAGR 4.4% 13. United Nations The next two figures represent the performance of the product categories in EU15 and the EU12.2% 13.7% 4.4% -1.4% 4.97% 0. Global Insight.3% 1.45% 1.7% 0. 9 . It is interesting to note that the income effect has more than balanced the demographic effect in these countries. Indeed.53% 1.8% 1. including cosmetics products.1% Private Consumption 0.97% 0.2% 11. as people become more aware of the dangers of sun exposure.2% 1.96% 0.38% Source: Euromonitor.5% 4.4% 1.9% -0.7% 2.4% 6.2% 3. Table 6 EU12 Total C&T market UNIT 2000 billions of € 4.7% 9.2% -0.54 5.9% -2.3% Population 65+ Y/Y growth rate Private Consumption 1.93% 0. Global Insight.5% 1.4% Total population Y/Y growth rate 1.3% 0.74 54.6% 4.6% Per capita C&T consum ption Y/Y growth rate Y/Y growth rate 0.4% 2.4% 1. the slight reduction in the population level is the only drag on the cosmetics and toiletries market in the EU12 region.9% 5. Table 5 EU15 Total C&T market UNIT 2000 2001 2002 billions of € 50. United Nations Compound Average Growth Rates (CAGR) are calculated over the periods that data is shown as available in the table.96% 0.8% -0.4% -1. However.07 Y/Y growth rate Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0.6% Population 65+ Y/Y growth rate 4.4% 1.5% 1.0% 16.

The composition of the U.1% 3% 4.September 2007 Figure 3 .1% 2% 1. allowing them to spend more on premium products. cosmetics market is fairly similar to Europe's. Skin care products have been the strongest.7% 7. consumers moved away from luxury products. whereas in the more dynamic economies of Central and Eastern Europe. This also explains the stronger performance of the decorative cosmetics segment in the new member states.7% 3. but were close behind the skin care segment in the EU12.2% 9.Growth of the EU12 Cosmetics and Toiletries Product Categories Nominal Compound Annual Growth Rate 2000-2006 12% 8. Americans spend a slightly lower proportion of C&T expenses on skin care products and fragrances and more on decorative cosmetics than Europeans. expanding by 8.4% 6% 4.3% over the review period.7%.1% 6. as many of the 10 .4% 2.Growth of EU15's Cosmetics and Toiletries Product Categories Nominal Compound Annual Growth Rate 2000-2006 6% 5.3% 9% 0% Fragrances Perfum es Decorative Cosm etics Skin Care Hair Care Toiletries Total Source: Euromonitor Fragrances experienced the slowest growth in the EU15.S. The C&T market grew by an average 2.0% 0% Fragrances Perfum es Decorative Cosm etics Skin Care Hair Care Toiletries Total Source: COLIPA Statistics Working Group Figure 4 .8% 2. consumers have seen their income grow strongly. This can be explained by economic factors: as the EU15 countries lagged in economic growth in recent years. Toiletries and hair care were the slowest segments in both regions.6% 4% 2.Final Report .

85. reflecting the importance the Japanese assign to their skin. fragrances make up just 2% of the market. In Japan. Fragrances decreased slightly. and the Japanese and Chinese on the other. This segment also experienced the fastest growth in both markets.Growth of the U. 10. 6.9% 2.9% 1.nsf/en/gr126802e.ca/epic/site/imr-ri.S. United States. In Japan. 12% Toiletries. Billion €.90. Figure 5 .ic.S. 4. skin lightening.C&T Market Shares by Product Category. Retail Sales Price.gc. Total market = €38.75. 22% Skin Care. while skin care products are over 40% of the total market.September 2007 same trends observed in Europe were also seen in the U.45.3% 4% 3.1% 1.6 while in China sun 6 http://strategis. it was driven by anti-aging. 27% Decorative Cosm etics. Cosmetics and Toiletries Product Categories Nominal Compound Annual Growth Rate 2000-2006 6% 4. indicating their relatively low popularity.2 billion Fragrances. 18% Hair Care.Final Report . 8.html 11 .22.3% -2% Fragrances Perfum es Decorative Cosm etics Skin Care Hair Care Toiletries Total Source: Euromonitor More differences exist in the cosmetics baskets consumed by Europeans and Americans on the one hand. 21% Source: Euromonitor Figure 6 . as a drop in market value during the economic downturn in 2001-03 has not yet reversed. 2006. and men's skin care creams. 7.3% 2% 0% -0.

September 2007 care products were the strongest.Final Report . 3. 19% Skin Care. Total market = €23.50.65. 2006. Retail Sales Price. hair care and toiletries remained roughly stagnant. despite their still very small market share compared to other countries. Billion €. Figure 7 .7 billion Toiletries. 0.gc.nsf/en/gr118704e. 4.8% 0.4% 0% 0. 44% Source: Euromonitor Figure 8 . 15% Fragrances. 10. 2% Decorative Cosm etics.9% 0.ca/epic/site/imr-ri. Fragrances decreased over the review period.Growth of the Japanese Cosmetics and Toiletries Product Categories 6% Nominal Compound Annual Growth Rate 2000-2006 3.40.4% -1.74. 4.44.8% 3% 1.ic.2% Fragrances Perfum es -3% Decorative Cosm etics Skin Care Hair Care Toiletries Total Source: Euromonitor 7 http://strategis. Japan.C&T Market Shares by Product Category. 20% Hair Care.7 The Japanese skin care segment has been the only one to experience significant growth among the five cosmetics categories. while decorative cosmetics.html 12 .

roughly the same growth rate registered in the local currency. 3.5% 5% 11. Fragrances followed closely.6% 15% 12. 10% Skin Care.86. Retail Sales Price.September 2007 Figure 9 . 39% Hair Care. Billion €.79. Skin care has once again been the strongest.15.9% in USD terms. 0.9% 19.23.3% 0% Fragrances Perfum es Decorative Cosm etics Skin Care Hair Care Toiletries Total Source: Euromonitor 13 . Total market = €8.2 billion Fragrances.19.Growth of the Chinese Cosmetics and Toiletries Product Categories Nominal Compound Annual Growth Rate 2000-2006 20% 16. 22% Source: Euromonitor The compound annual growth rate of the Chinese cosmetics market has been 11. 1.6% 6. China. 0. 2006.Final Report . 2% Toiletries. 27% Decorative Cosm etics. 2.3% 10% 8. growing by almost 20% every year since 2001.C&T Market Shares by Product Category. as the Renminbi is pegged to the USD. Figure 10 . as growing numbers of affluent Chinese spent more money on luxury products and this segment's penetration is still very low.

hair care.pdf 14 . Toiletry products grew by 6% in 2004. spending on cosmetics has varied by product type.Main Product Trends Market Size and Main Product Trends . for example. Overall. At the same time.EU158 Preferences and trends in the cosmetics industry vary across European countries.Final Report . second only to the skin care segment. compared to the EU average.4 . the major cosmetic categories – skin care. toiletries. fragrances. The French. while Spain and Portugal spent lower-than-average shares on decorative cosmetics.7%. 9 8 http://www. which grew 6. toiletries.com/files/in-cosmetics05_Euromonitor_%20Mens_Grooming_Market. have provided a major source of new industry growth. From country to country. and decorative cosmetics – achieved different results in 2006. while Germans and the British spent the most on toiletries. Skin care. primarily purchased skin care products. Toiletry & Perfumery Market 2005" publication of COLIPA. The Nordic countries – Finland.in-cosmetics. New market trends. Norway. and Sweden – spent a much lower share of their consumption basket on fragrances. specifically toiletry and skin care products targeted towards a burgeoning male consumer marketplace.September 2007 I. skin care was the fastest-growing and only product segment that showed growth in every country. and combined to garner nearly 75% of consumer spending in 2006. and hair care products remain the most popular.9 Figure 11 – EU15 by Product Category 18 16 Retail Sales Price (Billion €) 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 Fragrances Perfumes Decorative Cosmetics Skin Care Hair Care Toiletries 2005 2006 Source: COLIPA Statistics Working Group Analysis of the EU15 segments performance is based on COLIPA data and the "European Cosmetic.

Traditional skin products along with new premium skin products.4% Total 100% 3. Decorative Cosmetics Decorative cosmetics rebounded after a decreased in value terms in 2005.8% 0. Segmentation such as the emergence of ethnic brands in France is proving successful. and generated positive results that are expected to continue..September 2007 Table 7 EU15 Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 15% 2. Hair Care Of the three largest cosmetic product segments. foolproof application systems are the latest trends in this category. and low brand loyalty which led to a decline in this category in 2005. Sales of these products. Another emerging trend is the popularity of two-step products such as mascara used after a nourishing primer – consumers looking 15 .4% Hair Care 24% 2. Product saturation. sales of toiletry products have also been boosted by an expanding men's grooming business. nourishing. Anti-aging products lead the dynamism in this market segment. such as the proliferation of ethnic-specific brands. and consumers are opting for more sophisticated. Like skin care products.4% 0. Steady growth in consumer demand for sun care products is also boosting overall skin care sales in Europe.4% Decorative Cosmetics 12% 2. and sun-protective attributes and quick. such as hair colourants.1% 0. led the way in growth in this segment. Toiletries In an already saturated marketplace. which offer consumers alternatives to high salon prices as well as anti-aging and sun protection treatment shampoos. have had more success than their more generic counterparts. due to successful new product developments. increased availability of discount products. elbows. and skin brighteners captured 25% of overall consumer cosmetics spending in 2006.7% 0.3% Skin Care 26% 5. and necks.Final Report . Anti-aging. New skin care lines now include products designed to heal non-traditional body parts such as knees. higher quality products. where the U.6% 1.0% Source: COLIPA Statistics Working Group *Contribution to growth is the number of percentage points contributed by a category to total growth Skin Care The skin care market leads the way in the cosmetics industry. the focus of toiletry manufacturers has been towards premium products highlighted by new formulations with natural ingredients. night-time formulations to repair skin.0% 3. which are focused towards a specific type of consumer or with a specific aim. such as softening skin or reducing irritation. such as firming and anti-aging lotions and creams.5% Toiletries 23% 1. Finland and Denmark reached double digit growth this past year. hair care had the least success in 2006.K. Advanced do-it-yourself products. is starting to be offset by more value added products.

such as anti-aging creams that provide sun protection.September 2007 for best results are spending more time and money for their make-up.Final Report . Unit prices have stayed elevated despite wider availability through mass distribution channels and the internet. Fragrances As a luxury item. Segmentation is used to lure men and young adults into trading up from mass scents. remain popular for their convenience and cost-effectiveness. yet multi-use products. due to a number of successful premium and celebrity branded launches. 16 . fragrances are benefiting from the region's upturn in economic growth. Effectiveness is the most important differentiating factor in this segment. The dominant trend is a growing popularity of celebrity and fashion label fragrances and the renewed popularity of "old favourite" brands and artisanal fragrances.

Sweden and Switzerland. Table 8 shows that sun care products have the highest share of the total skin care segment in the U.6% France 5.6% Denm ark 8. Table 8 Skin care Sun care CAGR 00-06 Aus tria 5. which can be attributed to lower awareness as well as income levels. as consumers across the world are becoming increasingly aware of the damage caused by exposure to the sun's rays.9% 7.3% 13.0% Germ any 3.1% Norway 9.2% 10% 6% 6% 9% 8% 13% 15% 18% 7% 5% 9% 15% USA* China* Japan** Czech Republic Es tonia Hungary Bulgaria Lithuania Latvia Cyprus Malta Poland Rom ania Slovenia Slovakia *U. Germany.3% 13% 5.1% 8.4% 4.6% 8.4% -1. Spain and Portugal and a surprisingly low share in France. It is also very high in Denmark.9% 10.7% UK 8.3% 8. sun care products are considered popular among consumers of all ages. however.Skin Care Segment The sun care segment has been a strong component of the skin care market over the past years.3% 15.2% 5.8% 2% 8.5% Ireland 5.5% 8.4% 5.5% 0.8% 10.0% 7.3% 19. In general cross-country comparisons are difficult to explain at a broad market level.7% Sweden 10.3% 5% 3.4% 6. The new members of the European Union have lower adoption rates than their western counterparts.6% 28. since that time consumers in various countries have differed markedly in the rates of adoption of sun care products.6% 6.0% Italy 4.1% Belgium /Luxem bourg 7.4% 3.9% 15. changes in weather patterns from year to year as well as skin characteristics are just some of the factors that vary significantly from country to country.K.3% 3.4% 22. Awareness of these damaging effects began some time ago.1% 2.3% 6.6% 4.4% Spain 9.Final Report .1% 8. It is also surprising that Japanese consumers seem to spend only 2% of their total skin care consumption on sun care.0% 11.2% 6.0% 8.0% 7. as with many Asian consumers.7% 6.9% 12. and China values are calculated based on USD market sizes ** Japan values are calculated based on Yen market sizes Source: Euromonitor 17 . as other significant factors also influence the degree of sun care consumption as well as the markets' performance from year to year.4% 11. Ireland.4% Switzerland 1.0% -0.2% 6.S.0% Sun Care as a % of Total Skin Care 12% 12% 17% 11% 9% 9% 13% 17% 13% 12% 17% 18% 8% 21% 13% 6% Sun Care as Skin care Sun care a % of Total CAGR 00-06 Skin Care 4.2% 10.8% Portugal 9. The climate. These relatively low shares may be due to the growing popularity of other segments of the skin care market such as anti-aging creams that are gaining market share.8% Netherlands 4.6% 7.1% 8.8% Finland 9.2% 0.2% Greece 9.9% 6.1% 11.September 2007 Box 1 .

2 2000 2001 2002 2003 2004 2005 2006 Source: Euromonitor The shares of the five market segments are very similar in the EU12 and in EU15. Growth in the five segments is broad based – consumers spent more on necessities such as toiletries. with hair care taking up a slightly smaller share and toiletries a larger one.3% over the review period. 2000 to 2006. thus currency fluctuations may play an important role in explaining market movements. 10 Data on market segments are not available 18 . two important caveats have to be taken into account.8 Sales at Retail Prices (Million €) 1.0 0. When analysing trends in the EU12. growing 9. fragrances and decorative cosmetics have grown much more rapidly than in EU15 reflecting the increasing ability of new member states to spend more on luxury items. however. It is interesting to note that people in the new member states spend around 1.Final Report .5% of their total consumption on cosmetics compared to around 1% in Western Europe. Skin care has also been the most dynamic.6 0. The first is that all of the EU12 operated in their local currencies in the period under review. but particularly on such luxury items as fragrances and decorative cosmetics. widening the gap between the nominal growth rates in the two regions. Figure 12 – EU12 Market by Product Category 1.September 2007 Market Size and Main Product Trends – EU 1210 Robust growth in the EU12 countries in the first half of this decade and solid increases in disposable income have raised people's standard of living boosting their consumption levels and allowed them to spend more on cosmetics. but that this gap is narrowing as they become more affluent. The second is that inflation rates are generally higher in the new member states compared to the EU15.4 Fragrances Perfumes Decorative Cosmetics Skin Care Hair Care Toiletries 1.

September 2007 Table 9 Fragrances Decorative Skin Care Hair Care Toiletries EU12 Perfumes Cosmetics 15% 12% 26% 19% 28% Share of Total 8.2% Contribution to Growth Source: Euromonitor Total 100% 6.1% 4.8% 1.3% 4.4% 19 .2% CAGR 2000-2006 1.8% 2.1% 9.4% 6.4% 0.7% 7.3% 0.Final Report .

In Germany. Global Insight The fitting of a simple trend line suggests that on average a 1% increase in per capita disposable income will lead to a 0. as can be observed in Figure 13*. Cosmetics demand is less income elastic in these countries (a smaller correlation coefficient). Ireland. In the Nordic countries. Cyprus. Malta. Hungary. 2000 to 2006 8% Growth in per capita cosmetics consumption 6% Sw eden Belgium Austria UK 2% Japan 0% -1% -2% 0% Germany Sw itzerland 1% 2% France Norw ay Finland Spain Denmark 4% Netherlands Italy Portugal U. This shift is visible in two ways. despite fairly stable income growth. consumers shift demand from basic necessities to more sophisticated goods and high-end services. The relationship is quite evident in developed countries where personal disposable income data is available. per capita cosmetics consumption has increased even as disposable income fell over the review period.Income Growth and Cosmetics Consumption Personal disposable income growth is the main driver of per capita cosmetics consumption. Differences between countries are. Cosmetic products are perceived more as a luxury in these countries. but is not comparable.Final Report . secondly. per capita cosmetics spending outpaced income growth. Poland and Slovakia. Czech Republic. France and Italy growth in per capita cosmetics consumption has been sluggish. Consumption patterns have diversified over the last decade. Lithuania.S. Greece. The OECD publishes a measure of gross national disposable income. 3% 4% 5% 6% Growth in per capita personal disposable income Source: COLIPA Statistics Working Group. Poland. segments with a higher concentration of luxury products such as skin care and fragrances have performed better than necessities such as toiletries. * No comparable measure of personal disposable income is available for the remaining countries: Bulgaria. Figure 13 – Growth in Per Capita Cosmetics Consumption. Slovenia. not trivial. Greece. Romania.7% increase in per capita cosmetics consumption. Estonia.September 2007 Box 2 . however. Ireland. thus they could not be included in the analysis. In developing countries as income distribution changes. particularly in the new member states. In Japan. suggesting that cosmetics demand is income elastic. Slovakia. for the countries presented plus the Czech Republic. In China (not represented in the chart) per capita cosmetics consumption grew at the same rate as per capita disposable income over the period. Latvia. 20 . decreasing the share that consumers spend on cosmetics out of their consumption budgets.

and innovations bring new products to consumers.96% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 1.4% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. Growth rates of 7-9% during the same period were seen in Romania. Global Insight.21 1.4% 3. Direct sales of cosmetics are also extremely popular.2% 0.08 1.96% 0.9% 3.9% 2.6% 2.0% 1.19 1.2% Total population Y/Y growth rate 1.0% 2. Euromonitor.94% 0. people believe that they are receiving quality products for their money.5%).1% 0. Research and Markets 12 CAGR are calculated over the periods that data is shown as available in the table.12 1. while local producers find it hard to compete with the product availability and marketing and advertising resources of their larger counterparts.94% 0.4% 3.2% Per capita disposable income Y/Y growth rate Y/Y growth rate 3.2% 0.2% Private Consumption 0.7% 1.0% 4. Greater visibility and cosmopolitan effects of the more developed markets have further increased the demand for hygiene products and raised individual consciousness of appearance.3% 0.0% 3.5% Population 65+ 1.Final Report .2% 3. 21 . Reflecting general European trends.5 . skin care product sales exhibited strong growth. I. thanks to new added-value products and a rising interest in men's grooming products. Over the period from 2000 to 2006 the industry grew most rapidly in the Czech Republic (11.2% 1. while the Czech Republic and Hungary are a distant second and third. These patterns are projected to continue into the future as long as purchasing power continues to rise.9% 3. The Infoshop.7% 2.7% 3. Bharat Book Bureau.94% 0.1% 1.8% 2.1% 2.8% 3.7% 1. and observed market trends. Hungary and Lithuania.0% 2. United Nations As shown in Table 11 below.3% 0.94% Source: COLIPA Statistics Working Group.2% 0. Large international companies hold nearly the entire market share of this industry within the EU12 countries. Despite these positive trends.29 3.93% 0. Table 1012 Austria Total C&T market UNIT 2000 2001 2002 billions of € 1.0% 1. economic factors contributing to market developments. hair care products and toiletries have the highest market share 11 COLIPA. domestic cosmetic manufacturers have suffered.9% 2. allowing customers to have close interactions with sales representatives who can offer specific product advice.9% 0.5% 1.Country Summaries This section provides details on each country in the areas under review.25 1.8% 3.6% 1.0% 2.16 Y/Y growth rate 3.7% 3.2% 3.September 2007 Poland has the largest cosmetics market.5% 3. Included in this analysis is the performance of the five cosmetic segments.7% 0. mass availability of products in supermarkets and drug stores has spurred growth.4% in 2006 after a slow 2004. In the majority of countries.0% 2.3% 1. Market Size and Main Product Trends – Europe Austria11 A pick-up in per capita disposable income levels in Austria in 2003-06 boosted cosmetics and toiletries growth to 3% in 2005 and 3. These factors have combined to create a thriving industry.

and toiletries in Europe.2% 0. after three strong years and remained slow ever since.0% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.3% 5. along with fragrances had the lowest growth rates.4% 1.3% 0.3% 3. Market researchers have found that Austrian consumers prefer innovative products from companies with a strong brand image.3% 0.0% 0.7% 0.5% Decorative Cosmetics 12% 3.0% Per capita disposable income Y/Y growth rate Y/Y growth rate 3. while toiletries consumption is below the European average. below.4% 3. hair care.1% Population 65+ 3.7% -0.0% Source: COLIPA Statistics Working Group Belgium/ Luxembourg14 Together. Israel Commercial Office.3% Decorative Cosmetics 16% 3.3% 3.70 1. United Nations Table 13.2% Total 100% 3.7% Toiletries 17% 1. http://www.1% Hair Care 25% 1. Global Insight.3% 4.asp?report_id=367316 COLIPA. in Table 12.01% 1.researchandmarkets.2% 0.13 Table 11 Austria Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 11% 2.6% 0. Euromonitor. with consumption of cosmetics close to the European average. Other major trends in Austria included increased demand for natural and organic cosmetics and toiletries.3% 1.September 2007 in Austria.02% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 1.5% Toiletries 26% 2.3% 0.6% 3.48 1.8% 6.05% 1.7% Total 100% 3.0% 3.15 Table 13 Belgium/Luxembourg Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 19% 2.3% 2.65 1.0% 3.8% Private Consumption 0. Table 12 Belgium/Luxembourg Total C&T market UNIT 2000 2001 2002 billions of € 1.3% Source: COLIPA Statistics Working Group 13 14 http://www.72 3.3% Skin Care 24% 7. cosmetics.1% 3.0% 0.1% 0.3% 3.8% 0.7% Hair Care 29% 2. at 29% of the cosmetics market.euromonitor.1% 1. However.1% 3.3% 0.00% 0. while all other market segments grew by just 2-3%.2% 1. In turn.57 Y/Y growth rate 4.8% 0.1% 4.5% 0. Belgium and Luxembourg form the seventh-largest market for perfumes.2% 0.66 1.com/Cosmetics_and_toiletries_in_Belgium 22 . being far outpaced by overall consumption.7% 3.1% 2.6% Skin Care 22% 5. the Belgian cosmetics and toiletries sector and per capita spending decelerated sharply in 2004. shows how hair care products dominate the Belgian market.3% 0.0% 3.8% 5.7% 1.4% 0. despite a pick-up in economic growth in 2004-05 and steady 3% growth rates in per capita disposable income.1% 5. skin care products have seen a higher rate of growth.42 1.9% 4.5% 0.1% 0.97% Source: COLIPA Statistics Working Group.0% 4.8% 0.3% 1. due to concerns about the harmful effects of chemicals contained in personal care products.com/reportinfo.3% Total population Y/Y growth rate 1.Final Report . as can be seen below.2% 5. As in other European countries.3% 1.98% 0.9% 3.99% 1. Industry Canada 15 Colipa. due to the maturity of certain sectors.5% 5.

aspx 23 .3% 0. Fragrances and skin care products have seen the fastest growth rate.84% 0. Table 14 Denmark Total C&T market UNIT 2000 2001 2002 billions of € 701 737 813 Y/Y growth rate 5.4% 0. as illustrated in Table 15.5% 0.6% 6.4% 0.5% 4.9% 2. Denmark16 An improving national economy and government tax cuts have spurred growth in disposable income in Denmark.8% 5.0% 0.5% 3.5% 3.pdf.1% Private Consumption 0.com/Cosmetics_and_toiletries_in_Denmark. bath and shower products with the qualities of skin care products.3% 0.3% 0.4% Skin Care 21% 8.2% 1.86% 0.September 2007 Among the important trends.0% 0.3% 1.8% Source: COLIPA Statistics Working Group Danish consumers are very open to new products making the country a good test market for new products.8% 7.1% 0.17 Over the review period.0% 8.0% Toiletries 20% 0.5% 0. Finally.gov.8% 3.86% 0.euromonitor. Euromonitor expects that the Belgian cosmetics market has the potential to grow significantly in the future as some of the smaller subsegments currently have low penetration rates by EU country standards. such formerly womenfocused products as bronzing powder.4% 1. Table 15 Denmark Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 17% 13.9% 9.4% Total population Y/Y growth rate 0. Among the younger males.8% 4. United Nations The Danish market is dominated by hair care products.95% 0.88% 0.8% 1.4% Per capita disposable income Y/Y growth rate Y/Y growth rate 2.3% 0. Austrade http://www. anti-wrinkle creams. The sale of premium cosmetic products has benefited and there is increasing availability of upper-mass or "masstige" products.2% 3. Sun care products have grown rapidly in importance as concern about skin cancer is growing. They consume less toiletries and skin care products than the average European.3% 0.94% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 838 788 859 928 4.1% 0.8% 9.5% 4.4% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. the men's segment has experienced very rapid growth in recent years and is the most attractive in Belgium's market.Final Report .4% 0.0% 4.austrade. when an unexplained decrease in cosmetics consumption took place.1% 8.1% 6. and skin care products offering sun protection – are increasingly popular.0% Total 100% 4.1% 3.1% -5.18 Multifunctional products – for example.3% Population 65+ 4.2% 10.2% 0.8% 3.au/ArticleDocuments/1418/Denmark-Cosmetics-Seminar.9% -6.6% 4. 16 17 COLIPA. cosmetics and toiletries growth outpaced consumption growth in all years except 2004. and toning gels have increased in popularity.88% Source: COLIPA Statistics Working Group.7% Hair Care 30% 3. Global Insight.6% 2.8% 2. at 30% of cosmetics sales.3% 3.3% Decorative Cosmetics 12% 3. Euromonitor. Skin care products for men are the fastest growing segment.5% 4. COLIPA 18 http://www.

3% 0.4% 5. Finnish consumers prefer to buy local products and this has helped the country's smaller domestic manufacturers to compete with large international players.6% 0.2% 4.5% 4.6% 1.2% 0. While the cosmetics and toiletries market slowed somewhat in 2004 it rebounded in 2005-06.7% 1. solidly in line with growth in per capita disposable income.4% 1.html 24 .3% 0.5% 1.86% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 656 651 697 758 5.2% 0.8% 5.3% 0.1% 0. growing by a compound annual rate of 5.7% 1. major trends observed in Denmark include increasing demand for male grooming products.3% 1.7% Total 100% 5.0% 6. Finnish lifestyle advertisements positively influenced cosmetics sales especially for hair and skin care products.83% 0. like other Europeans.87% 0.3% Total population Y/Y growth rate 1.com/study/eo33308-cosmetics-finland.7% 8. Earlier in the decade an economic slowdown resulted in increased demand for cheaper products however the premium products sector remains solid now. 19 COLIPA.6% 1.9% Private Consumption 0. a pattern similar to other countries in our study. Finland19 The Finnish cosmetics and toiletries market was strong over the six year period.20 Table 16 Finland Total C&T market UNIT 2000 2001 2002 billions of € 552 592 618 Y/Y growth rate 7.4% 5.5% 6.7% 0.3% 5.8% 0.1% 8.7% Per capita disposable income Y/Y growth rate Y/Y growth rate 5.85% 0. show increased interest in natural ingredients and formulas.3% Toiletries 20% 3.9% Skin Care 26% 9.4% 1. The Finnish Cosmetic. this is the lowest share in Europe. as can be seen in Table 16.0% 0.4% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.4% 5. Global Insight.7% -1.6% 4. Bharat Book Bureau.6% 4. Toiletry and Detergent Association 20 http://www.5% Population 65+ 5.86% 0.4% 4.1% 4. They also contributed to a change in men's attitude towards cosmetic products and an increase in sales for male grooming products. The Infoshop.3% 1.86% 0. Table 17 Finland Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 5% 6.September 2007 As in other European countries.2% 3.4%. natural ingredients as well as technologically advanced and multifunctional cosmetics.3% Decorative Cosmetics 15% 5.Final Report . Notably fragrances are not very popular.7% 4.9% 5.1% -0.5% 4.89% Source: COLIPA Statistics Working Group. and they are buying more perfume-free products primarily because of the fear of allergic reactions from sensitive skins. at just 5% of total cosmetics sales.4% 6. United Nations Hair care and skin care products dominate the cosmetics market in Finland at 34% and 26% of sales respectively (see Table 17).7% 4.3% 0. Euromonitor. Growth in skin care products has contributed the most to the overall expansion of the cosmetics market.the-infoshop.4% Source: COLIPA Statistics Working Group Finns.5% 4.8% 7.5% Hair Care 34% 3.4% 2.

driven by attitude changes and new product launches.44 2. Global Insight.3% Private Consumption 1.16% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 10.2% 0.0% 1.4% 0. France22 France saw less growth in cosmetics than would be expected given its economic performance.0% Decorative Cosmetics 11% 1.4% 2.03% of total consumption) than they did in 2000 (1.9% 2.com/Cosmetics_and_toiletries_in_France 25 .1% 5.4% Source: COLIPA Statistics Working Group As in other EU markets. natural/organic products have been a strong segment in the market.5% 2.2% Skin Care 31% 5.5% 3. Euromonitor.4% 4.24 France's aging population is an important market driver for nourishing and anti-aging products.2% -1.0% Per capita disposable income Y/Y growth rate Y/Y growth rate 4. Euromonitor expects niche sectors.2% Total 100% 2.September 2007 Sales of men's grooming products were strong in 2005. United Nations Table 19 shows that skin care products have the largest share of the cosmetics market in France.5% Toiletries 18% 1.3% 3.3% 0.8% 0.14% 1.06 9.11 10.6% 0.14% 1.4% 1.1% 3.2% 1.03% Source: COLIPA Statistics Working Group.0% 0.9% Population 65+ 4.Final Report . They are hoping to shift consumer preference to "upper-mass" products.euromonitor.5% 5.13% 1.13%).52 10. while per capita disposable income continued to grow at steady rates.2% 1. but seems to have rebounded strongly in 2006 growing at almost 4%. Men's grooming products have also performed very well and are expected to be the most dynamic segment going forward.6% 0. The cosmetics market contracted in 2004 and again in 2005.08% 1. Cosmetic Design Europe.03% 1.4% 2. Reuters 23 COLIPA.21 Younger consumers are showing an increased preference for colour cosmetics and hair colourants. This challenging environment has caused cosmetics firms to push into the premium segment in order to squeeze higher value out of sales.3% 3.7% 2.com/Cosmetics_and_toiletries_in_Finland COLIPA.0% 0.2% 0.4% 0. A driver that is important to the French market is an ethnic segment that has created considerable growth potential for products like specialist make-up and other cosmetic 21 22 http://www. while the fragrances segment has stagnated since 2000 and now represents only 16% of the overall market in France. The market for decorative cosmetics and toiletries was slow. Table 19 France Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 17% 0.4% 0.1% 3.9% 3.4% 0.27 10.4% Total population Y/Y growth rate 1.4% 0.euromonitor.9% 4.9% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.1% 3.7% 0.6% Hair Care 23% 2.4% 0. and have by far grown the fastest during the review period.6% -0. The French spent less on cosmetics and toiletries in 2006 (1.05 Y/Y growth rate 5. Toiletry & Perfumery Market 2005" 24 http://www.2% -1.4% 0.9% 3. "European Cosmetic.4% 0.3% 3. such as men's products and depilatories to show the most potential going forward.23 Table 18 France Total C&T market UNIT 2000 2001 2002 billions of € 9.9% 1. Austrade.05 10.6% 3.4% -2.9% 0.

23 11. and are not brand loyal.6% 0. Depressed disposable incomes were still affecting demand for high-end products such as luxury personal care and decorative cosmetics while ales volumes for essentials such as toiletries however benefited during this period.September 2007 products designed for darker skins. The market for sun care products is reaching saturation and consumers appear to have little brand loyalty.7% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. Germans generally want to look attractive and well groomed.1% Total population Y/Y growth rate 2. Beauty-on-line.27 The cosmetics and toiletries market grew less than overall consumption levels and disposable incomes.4% 3. and are more interested in their overall well-being.8% 0.4% 0.85% 0.0% 2. 28 http://www.0% 1. Cosmetic Business 27 Private label products or services are typically those manufactured or provided by one company for offer under another company's brand.1% 3.1% 0.86% 0.0% 0. Global Insight.13 11. small. more so than other Europeans.0% 0.0% Population 65+ 3.3% 1.5% 1.71 1.asp?eid=96 26 25 26 . reports that more than one-third of German women are price-sensitive when purchasing cosmetics (around 12% of women surveyed categorically buy the cheapest product).23 11.3% 1.88% 0.7% 2.8% 1.7% 0.1% 0.8% 1.1% 2. outpacing overall consumption growth for the first time in six years. In addition they buy spontaneously.0% -0.5% 3.1% 3.25 Germany26 During 2005 Germany's economic recovery was still in its early stages and consumers were cost-conscious and somewhat uncertain about the future of the economy.and medium-size enterprises (SMEs) have improved quality while making 28 important investments to lower production costs.5% 3.88% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 11.0% 0.Final Report .87% Source: COLIPA Statistics Working Group.6% 2.09 Y/Y growth rate 1.com/ebn/newsletter. Euromonitor. national or international brands.8% 1.0% 2.8% Per capita disposable income Y/Y growth rate Y/Y growth rate 3.1% 0.0% 0. A survey by a well-known German women's magazine.6% 2. Private label goods and services are available in a wide range of industries and are often positioned as lower cost alternatives to regional.9% 1.3% 0.28 11.7% -0.researchandmarkets.8% 1.1% 0.0% 1.7% 0. Product innovation has also contributed to the strong performance of skin and sun care products which has been bolstered by the increased awareness of the dangers of sun exposure.com/reports/c33213 COLIPA.1% 0.3% 2. http://www.88% 0.0% 1.03 11. Table 20 Germany Total C&T market UNIT 2000 2001 2002 billions of € 11.91% 0. 2006 data shows that the cosmetics market has rebounded strongly. The domestic market is large and German consumers are used to high quality cosmetics.4% Private Consumption 0. United Nations According to a 2004 study by the Mintel Group.beauty-on-line.

6% 1.8% 6.32 Table 23 Greece Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 11% 8.com/Cosmetics_and_toiletries_in_Germany COLIPA. Greece30 The Greek cosmetics market decelerated sharply in recent years after experiencing double-digit growth earlier in the decade. and skin care products command the bulk of the market.3% 5.9% 7. Cosmetics Design Europe 31 Disposable income data for Greece is not available. are the dominant segments. Global Insight.5% 4.euromonitor. cosmetics' share has however declined measurably.80% Source: COLIPA Statistics Working Group.9% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. 32 http://www.0% -0. The cosmetics market has been supported by very solid growth in private consumption.5% 0. and sun care products have expanded according to Euromonitor. In addition.0% 1.5% Source: COLIPA Statistics Working Group 29 30 http://www.7% 1.3% Decorative Cosmetics 10% -2.0% 1. such as colour cosmetics.7% 2.4% 7.23 1.9% Decorative Cosmetics 11% 1.84% 0.1% 4.88% 0.2% Skin Care 25% 3. Decorative cosmetics have been notably stagnant over the last few years in Greece.2% 0. depilatories.92% 0. Euromonitor.Final Report . which is one of the lowest in Europe. Bharat Book.5% 5.com/Cosmetics_and_toiletries_in_Greece 27 .4% 7.9% 12. toiletries.7% Hair Care 33% 4.97% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 1.29 As is evident in Table 21. hair care. busier lifestyles and an increasing number of women entering the workforce has led to more demand for practical. The Infoshop.31 1.1% Skin Care 29% 9.2% 2.0% 1. and have seen the fastest growth.2% 0.2% 0.0% 3.3% 2.3% 3.1% 0.2% 0.91% 0. Table 22 Greece Total C&T market UNIT 2000 2001 2002 billions of € 0.3% 2.31 Hair care and skin care.2% 0.7% Total 100% 5.4% 0.4% 0.3% Toiletries 16% 4.98 1.boosting the demand for nourishing.89% 0.1% Toiletries 29% 0.0% Source: COLIPA Statistics Working Group The decline in Germany's birth rate.9% Hair Care 24% 0.euromonitor.Bureau.4% 2.7% 7. and skin care products.3% 0. antiaging.2% 0. The general population has been aging – more so than in other European countries .3% 0.7% 2.34 5.4% 2.23 Y/Y growth rate 11.1% Total 100% 1.3% 0. Products seen as necessities.2% 0. but only skin care showed any real measurable growth over the period. has led to a dramatic drop in demand for baby care products.5% Private Consumption 0.2% 4.3% Total population Y/Y growth rate 2. United Nations A key trend in the Greek market is a shift from more expensive fragrances to deodorants. time-saving products for which Germans are willing to spend more money.4% 0.7% 0.6% 12.28 1.09 1.1% 2.September 2007 Table 21 Germany Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 13% 2.4% 0. as shown in Table 22.2% Population 65+ Y/Y growth rate 7.5% 6.

Ireland34 Ireland's buoyant economic environment lifted the expansion of the cosmetics and toiletries to very rapid rates earlier in the decade.1% Hair Care 20% 3.8% 1.82% 0. Global Insight.3% 7. men's skin care remains a niche segment with little growth potential. and sun care. 37 http://www.84% in 2000 to 0.5% 1.79% 0.7% 1. products – particularly for skin care.1% Skin Care 20% 5.the-infoshop.cosmeticsdesign-europe. New product developments has led to continued market segmentation and growth in more mature sectors such as skin care and bath and shower products.82% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 514 521 546 567 5.g.com/Cosmetics_and_toiletries_in_Ireland 36 Disposable income data is not available for Ireland.asp?n=73960-mintel-l-oreal-foundation-lipstick-age-defying 28 . The Irish cosmetics market is driven by innovation and advertising. upper mass.36 They have spent more on colour cosmetic products and in particular celebrity-endorsed products. United Nations Ireland's economic boom has increased the number of women in the labour force and given them more spending power. Mintel International group.1% 8. Table 24 Ireland Total C&T market UNIT 2000 2001 2002 billions of € 424 456 500 Y/Y growth rate 7. or premium.3% 6.5% 1.3% 4.Final Report .7% 1.0% 1.4% 1. Stiff competition in the market alongside innovative 33 34 http://www.0% Source: COLIPA Statistics Working Group Men’s grooming products were a driving force in Ireland's cosmetics and toiletries market in 2005.2% Total 100% 5.8% 1.8% 9.9% 1.com/news/ng. Irish Sea Fisheries Board 35 http://www.euromonitor.8% 6.70% Source: COLIPA Statistics Working Group.4% 9. Euromonitor.8% Decorative Cosmetics 15% 7.3% Private Consumption 0.0% 5.4% 1.33 Advances in technology in new skin nourishers and anti-aging products are providing a lift to the demand for facial care products along with a preference among aging Greek women to keep their faces looking younger.8% 3..1% 0. Cosmetics share of overall consumption has trended steadily downwards from 0.September 2007 Nonetheless it appears that consumers are still ready to spend more on quality and valueadded products – e.html COLIPA. More recently Irish consumers have become thriftier.9% 9.76% 0.70% in 2006.0% 2.3% 1.5% 0.3% 2.8% Toiletries 29% 4.9% 5. foundation. The growth has been skewed towards higher-quality products.74% 0.1% Population 65+ Y/Y growth rate 9.6% 1.5% 7. Unlike in other European countries.com/study/eo30350-toiletries.4% 1.5% -0. hair care.8% 1.6% 1.0% 1.7% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 1. as Greek men have shown minimal interest in these products.3% 5.4% 1.37 Table 25 Ireland Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 15% 5. Cosmetics Design Europe.4% 2. looking for the highest quality cosmetics at the best prices35.9% 1.9% 0. and lipsticks.84% 0.8% Total population Y/Y growth rate 0.0% 1.5% 1.

1% 0.1% 1.3% 3.96 8.1% 2.1% 0. Global Insight.2% Per capita disposable income Y/Y growth rate Y/Y growth rate 3.0% 0.5% 4.8% 0.9% -0.8% Source: COLIPA Statistics Working Group 38 COLIPA.28 8.2% 2.6% 2. These two categories are by far the sales leaders.3% and 3. scents.7% 0.1% 3. while decorative cosmetics. Table 27 Italy Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 12% 0.7% 3.4% compounded annually.1% Decorative Cosmetics 13% 1. Nonetheless growth in the cosmetics market has tracked below the path of per capita disposable income and has been quite volatile over the period we examined.1% 0.4% 3.06% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 8. Euromonitor. Research and Markets 29 .4% 1. colour cosmetics and fragrances to be luxury items and sales in these segments have lagged to varying degrees. Industry Canada.44 7. These upper mass products offer features previously exclusive to premium brands but at a lower price. particularly in the skin care segment. opting for unique and distinctive technological attributes.9% 2. Italian consumers consider skin care products.8% 3.01% Source: COLIPA Statistics Working Group. They show preference towards innovative.8% 3. Italian consumers are driven by 'emotional' factors when making purchase decisions.2% Hair Care 22% 3.79 2.61 8.2% Skin Care 27% 4. Italy38 Ongoing difficult conditions in the Italian economy led to modest performance of the Italian cosmetics and toiletries market.08% 1.Final Report .5% 0.0% Private Consumption 1. and toiletries continue to hold the bulk of total sales (69%).7% Toiletries 25% 2.0% 1.8% 2.9% 3.2% 3.0% 4. which serve as a substitute to cosmetic surgery.7% Total 100% 2. This has increased the demand for mass products at the expense of premium products and a high rate of promotional activities. skin care.4% 0. particularly for toiletries. United Nations Skin care and toiletries are the leading segments in the Italian market.1% 0.7% 7.5% 1. respectively – as shown in Table 27.September 2007 promotional offers and market entry of private label brands has caused unit prices in the industry to go down.3% 1. Cosmetic Business.4% 0.07% 1.4% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.06% 1.8% 2.01 Y/Y growth rate 7.3% 1. in terms of growth rates.1% 2. The economic climate and Italians’ preference for quality products have mostly benefited upper mass products. at 4. Table 26 Italy Total C&T market UNIT 2000 2001 2002 billions of € 7.1% 0.9% -1.2% 4. hair care and fragrances have been more sluggish.1% 0. colours and packaging.3% 4. hair care. and fragrances led the way in growth rates over the 2000 to 2006 period – as seen in Table 25 – while skin care.1% 2.05% 1.9% 2.1% 3.7% 3.03% 1.69 8. Decorative cosmetics. formulation-based cosmetics.1% Population 65+ 7.9% 1.1% Total population Y/Y growth rate 2.6% 1.

4% 2.3% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. As in other European markets.01% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 2.4% 0. further innovation.43 2.5% 1.3% 1.36 2.7% 3.6% 0.5% 4.4% 1.Final Report . right behind decorative cosmetics (see Table 29).9% 1. Industry Canada.0% Source: COLIPA Statistics Working Group The men's segment has been one of the most dynamic in the Netherlands in recent years.3% 1. Euromonitor expects positive growth driven by increases in unit prices. United Nations Consumer preferences in the Netherlands are turning to products with health benefits and other innovative products that meet specific needs. There is increasing use of firming/anti-cellulite products in order to cover the signs of aging.1% 0. Global Insight.1% 1. The Netherlands39 Growth in the cosmetics market turned negative in 2004 and 2005 after robust gains earlier in the decade in the Netherlands but regained strength in 2006 (see Table 28). Euromonitor.7% 5.0% 2. hair care and skin care products dominate the cosmetics market in the Netherlands.04 2.00% 0.4% 0.9% Decorative Cosmetics 12% 4.5% 0. vitamins and aroma therapeutic properties.0% 2.0% 3.44 3.8% 3.6% Total 100% 3.5% 0.5% 3.24 2. 39 40 COLIPA. And men in Italy are focusing more on their well being. where new products have increased awareness and boosted demand.00% Source: COLIPA Statistics Working Group.39 2.2% 1.5% 1.2% Toiletries 27% 2.4% -1.1% Population 65+ 8.5% Skin Care 23% 4. Table 29 Netherlands Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 16% 5.3% 0.40 Going forward. The Infoshop.2% 2. and growing offers of more segmented products.2% 2.03% 1.0% 3.7% -1. http://www.9% Private Consumption 1.4% 8.00% 1.4% 3.5% Total population Y/Y growth rate 1.5% 0.0% Hair Care 23% 0.0% 0. Discounted and budget cosmetic products have become more attractive.2% 1. skin care products are showing the fastest growth.36 Y/Y growth rate 9.8% 3.1% 2.1% 1.97% 1.9% 4.4% 0.5% 0.7% 0.5% Per capita disposable income Y/Y growth rate Y/Y growth rate 11. a trend amplified by price discounts and volume offers in supermarkets and drugstores.5% -1.September 2007 Other important trends include a growing awareness about health issues that has stimulated demand for cosmetics containing natural ingredients.com/Cosmetics_and_toiletries_in_the_Netherlands 30 .4% 1. particularly in skin care.02% 1. Product selection criteria for Dutch consumers have convenience of use and a premium / glamorous appeal near the top of the list.8% -1.4% 0.2% 1. thus giving an impetus to men's grooming product segment.euromonitor. Table 28 Netherlands Total C&T market UNIT 2000 2001 2002 billions of € 2. Toiletries.

4% Per capita disposable income Y/Y growth rate Y/Y growth rate 4.2% Decorative Cosmetics 6% 1.4% 1. has spurred growth in Spain’s cosmetics and toiletries sector to 6.1% Total 100% 3.September 2007 Portugal41 Growth in the cosmetics market slowed recently following some very significant gains earlier in the decade. the increased awareness of the benefits of cosmetics use has encouraged consumers in Portugal to spend more for products with specific functions.3% Hair Care 30% 4. Spain's higher than average population growth has also contributed to this growth.7% 4.cosmeticsdesign-europe.3% 2.02 Y/Y growth rate 7.7% 1. Euromonitor. The Infoshop.5% 0.04 1.91 0.3% Toiletries 22% -0.4% Private Consumption 1.3% 0.9% 5.5% 0.18% 1.9% 4.5% 1. Cosmetics Design-Europe.5% 0.1% Skin Care 25% 9. as shown in Table 31.6% 4.3% 1.6% 3. There has also been heightened interest in hair removers and lighteners. Beauty Online.9% 1.10 1. such as the recently invigorated market for depilatories and hair bleaches.5% 0.9% 0.3% Source: COLIPA Statistics Working Group Consumers have become more quality conscious towards cosmetics and toiletries and they are willing to spend extra for products that cater to their specific needs.4% 3.asp?id=53318-portuguese-cosmetics-and 43 COLIPA. The Infoshop http://www.8% 0.09 1.1% 2.10% Source: COLIPA Statistics Working Group. United Nations Hair care products have the largest share (30%) of the cosmetics market in Portugal.97 1.6% 3.0% 4.2% 3. Industry Canada.3% 0. Cosmetics share of total consumption remains high relative to European averages.Switzerland.8% 1. Table 30 Portugal Total C&T market UNIT 2000 2001 2002 billions of € 0.6% 1.5% 0.5% -0.18% 1. While many of the key cosmetics segments have reached maturity. Market Watch 42 41 31 . All market segments expanded rapidly over that period (see Table 32).8% Population 65+ 5. Strong expansion of the skin care market has been in part a result of government.0% 2.14% 1.4% 3.3% compounded annual growth over the 2000 to 2006 period.0% 4.10 3. Spain43 Strong economic performance.19% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 1.2% -0.3% 1.7% 3.42 Table 31 Portugal Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 17% 0.4% 2.1% 4. Austrade.2% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. with higher employment and income levels.5% Total population Y/Y growth rate 1.5% 0.6% 4. as have some important sociological shifts.5% 0.and manufacturer-driven campaigns about the harmful effects of sun exposure. Global Insight. Euromonitor. The demand for luxury items like fragrances and toiletries has grown slowly.8% 1.Final Report . COLIPA.3% 4.3% 3. Business Network.16% 1.com/news/ng.9% 0. They prefer to buy international brands due to availability and quality and they prefer to buy from large distribution outlets such as supermarkets and hypermarkets.3% 1.6% 2.19% 1.3% 1.

34% Source: COLIPA Statistics Working Group.3% 7.8% Private Consumption 1.44 6.9% 4.79 7.5% 6.42% 1.8% 3.9%).0% 0. sun protection. This is likely a reflection of their increased focus on health and wellness which is the dominant feature of the local cosmetics market.8% 4.0% 4.6% 5.44 Spaniards spend much less on decorative cosmetics than other Europeans.7% 1.0% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.7% 0.56 5.0% 1.1% 0.euromonitor. Grooming is no longer seen as an effeminate pursuit and this has spurred growth in the men's cosmetics segment.3% Source: COLIPA Statistics Working Group The most evident trends are the emerging niches of natural skin care.41% 1. Euromonitor.2% Toiletries 20% 6.6% growth in disposable income per capita.2% 1. Table 33 Spain Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 23% 5.aspx 46 COLIPA. and 45 cosmeceuticals such as anti-aging.2% 1. and anti-cellulite creams.38% 1.6% 5. Swedes spent a higher share of their consumption baskets on cosmetics in 2006 than they did in 2000 (1.4% 6.gov. enabling women to purchase more upper-mass market and premium products.6% 6.5% 8.5% 6.1% 5.5% Per capita disposable income Y/Y growth rate Y/Y growth rate 6.11 7. these four categories all fall within the range of 20%-26% of total sales).7% 7.1% over the review period.4% Hair Care 23% 5.2% Total population Y/Y growth rate 1.17 5.7% 0. United Nations Among the sociological shifts is the increase of women in the labour force. 44 45 http://www.9% 4.7% 1.3% 4.0% 2. GCI 32 .com/Cosmetics_and_toiletries_in_Spain http://www. Find Articles. Per capita consumption is higher than the European average despite their somewhat lower average incomes. As in other countries.7% 1.8% 1.Final Report .5% 4.5% 4.September 2007 Table 32 Spain Total C&T market UNIT 2000 2001 2002 billions of € 5. 0.6% 7.07% vs.45% 1. and body and hair products. compared to 3.3% 6. Industry Canada. This means delayed child-bearing and increased disposable income.9% 1. Global Insight.7% 5.2% Decorative Cosmetics 8% 4.9% Population 65+ 5.2% 2.7% 6. The men's cosmetics market is quite small – about 10 percent of the total market however men are becoming increasingly conscious of their looks and appearance. increasing awareness of the harmful effects of sun exposure is driving the skin care market.3% 4. and the remainder of their cosmetics consumption is almost equally divided among the other four categories (as Table 33 shows.42% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 6. Subsegments of these are aroma-therapy products and natural oils.2% 1.3% 0.40% 1.austrade.0% 0.38 6.92 Y/Y growth rate 7. Sweden46 Swedish consumption of cosmetics has outpaced economic fundamentals: the average annual growth rate is 5.2% Total 100% 6.0% 1.3% 1.3% 1.7% 5.au/Cosmetics-and-toiletries-to-Spain/default.4% Skin Care 26% 9. Cosmetics share of overall consumption is also higher in Spain compared to the other EU countries.0% 5.9% 0.

and Euromonitor reports that sun care was the most dynamic niche segment in 2005.1% 1.2% 0.1% Source: COLIPA Statistics Working Group Euromonitor expects depilatories and sun care to continue being the sector's bestperforming segments.8% 4.4% 0.47 Other important trends include a decline in sales of men's fragrances that is likely due to the declining metrosexual trend over the past few years. Markets for nail products and eye make-up products have declined with changing fashion trends as consumers are moving more towards the natural look.euromonitor. albeit somewhat more modest. due to aggressive discounting by major retailers. cosmetics market has grown moderately over the review period.5% 0.4% 0.9% 0. Toiletry & Perfumery Market 2005" 33 .Final Report . Bharat Book Bureau.8% Toiletries 24% 0.6% 5.07% 1.1% 8.0% 4.6% 5.2% 2.6% 4.1% Decorative Cosmetics 20% 8.7% Skin Care 21% 8.55 5.1% 7. but growth rebounded strongly in 2006.49 47 48 http://www.95% 1.1% 0. Cosmetic Design.3% 0.1% -4.7% 2.92% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 1.9% 7.1% Total 100% 5.1% -0. Research and Markets.1% 1.5% 3. Its movements closely follow growth in per capita disposable income.1% 2. United Nations A growing concern about skin cancer fed sales of sun care products.7% 0.53 1.K.16 Y/Y growth rate -5.0% 3.1% 0. and for product development and the aging population to be key drivers of growth.15 1. 2004 was a significantly slower year than 2005. together with depilatories.4% 0.com/Cosmetics_And_Toiletries_in_Sweden COLIPA. Euromonitor.89% 0. "European Cosmetic.3% 0.9% 1.10% 1.4% 3.September 2007 Table 34 Sweden Total C&T market UNIT 2000 2001 2002 billions of € 1. Table 35 Sweden Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 10% 11.0% Population 65+ 8.8% 1.4% 0.4% Total population Y/Y growth rate -0.6% 1.46 1.0% 3.1% 4.3% 0.2% 4.6% 4. The Infoshop. Global Insight.09 1.6% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. which is still an underdeveloped market.3% 16.1% 1.89% 0.2% 0.6% Per capita disposable income Y/Y growth rate Y/Y growth rate -6.6% 1. United Kingdom48 The U.3% 0.26 1.3% Private Consumption 0.4% 1.1% 5.8% Hair Care 24% 3.07% Source: COLIPA Statistics Working Group. Industry Canada 49 COLIPA.3% 15.

47 8. Cosmetics Design 34 .28 9. Global Insight. New lipsticks and glosses for younger looking lips are entering the market.3% 8.3% Total population Y/Y growth rate 0.3% 0.4% -4.1% 3. The U.2% 5.3% 0.3% 1.3% 0.08 Y/Y growth rate 3. United Nations An elite.82% 0. is strongly influenced by advertising. these gains were offset by major declines in the toiletries and hair care segments.8% 2.3% 0.56 9.K.2% Private Consumption 0.8% 1.2% Per capita disposable income Y/Y growth rate Y/Y growth rate 3.K.50 Foundation has become the single largest product category as mature women try to cover up aging lines. However.8% 3.2% 4. while skin care products and decorative cosmetics have shown the most growth (see Table 37). aromatherapies and fruit extracts.5% 0.5% -0.4% 2. British women are 51 the biggest consumers of decorative cosmetics in Europe.2% 8.3% 0.3% 4.83% 0.0% 2.0% 7.83% 0.2% Skin Care 21% 6.2% Decorative Cosmetics 18% 6.8% 8.6% 0.K. The cosmetics market in the U. premium market is emerging in the U.8% Source: COLIPA Statistics Working Group Toiletries dominate the U.K.83% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 8. New product launches.6% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.K.1% 4.9% 0. driven by young female professionals and their male metrosexual counterparts.cosmeticsdesign-europe.99 2. with little growth potential and a plethora of budget and private label products.6% 0.com/news/ng. Table 37 United Kingdom Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 13% 1.3% 0. Fragrances and skin care products have performed well in recent years due to new product developments in the "premium" and "masstige" segments.0% 7.80% 0.3% 1.1% 2.1% -1.4% Population 65+ 4.Final Report .8% 0.3% 0. Bulgaria52 The cosmetics and toiletries market is thriving in Bulgaria.1% 4. The Infoshop.5% -5.4% 2. is leading the way in the EU in terms of the rising popularity of products containing natural ingredients like herbs and plant extracts. and increasingly by the older demographic.com/news/ng.2% Total 100% 2.79 9.3% 0.. cosmetics market.September 2007 Table 36 United Kingdom Total C&T market UNIT 2000 2001 2002 billions of € 8.asp?n=60389-global-organic-cosmetic http://www. greater brand availability. registering more than 6% growth over the review period largely due to increased consumer purchasing power. Hair care is a mature market in the U.5% 0.82% Source: COLIPA Statistics Working Group.3% Hair Care 22% 0.asp?n=71809-europe-cosmetic-perfume 52 Euromonitor. renewed marketing campaigns.3% 0.5% 0. and growing Westernisation has led to dramatically changing attitudes and demand for more premium 50 51 http://www.25 9. media and celebrity endorsements have a significant impact.1% Toiletries 26% 0.cosmeticsdesign.3% -7.8% 2.8% -5.7% 7.5% 0.6% 0..83% 0.

5% 6.6% -0.3% 7.5% 7.6% 4. backed by significant promotions to increase sales. Euromonitor.7% -0.2% 0.05% 2006 172 2. Growth of the cosmetics market has generally benefited foreign brands. the Cypriot cosmetics market remained flat. Growing popularity in men's cosmetic lines should help sustain this positive trend.54 Cyprus Despite robust economic growth during the 2000-06 period.7% -0. 2006 experienced a slow down in the cosmetics market even as overall consumption growth remained solid.4% 0.3% 1.5% Direct sales.9% -0.7% Source: Euromonitor.10% 2005 167 7. Global Insight.9% Private Consumption 1.5% 5.3% 12.9% 1.9% Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0.17% C&T as a % of total consumption 2003 145 7.5% Contribution to Growth Source: Euromonitor Total 100% 6. especially of skin care products. while domestic companies struggle to maintain market share.2% 9.9% -0.euromonitor. May 2006.7% 1.7% Total population Y/Y growth rate 0.3% 11.53 Table 38 Bulgaria Total C&T market UNIT 2000 2001 2002 millions of € 118 128 135 Y/Y growth rate 8.5% 14.Final Report .3% 0.7% -0.5% 0.3% 1.com/Cosmetics_and_toiletries_in_Bulgaria#exec. available at http://www.26% 1. At the same time.7% -0. as a sharp decline in 2002 was just reversed by a modest but steady performance thereafter.1% -0.4% 12.7% -0.6% -0.2% 11.2% 1.8% 1. consumers continue to seek a balance between price and value.15% 2004 155 7. 35 .September 2007 and specialized cosmetics. Cosmetics and Toiletries in Bulgaria: Executive Summary.7% -0.4% 7.1% 5. 55 Disposable income data is not available for Cyprus. Fairly solid population growth relative to other European countries has not helped in boosting the weak performance of the cosmetics sector.2% 13.4% CAGR 2000-2006 0. dominated this market in 2005. Growth was quite dramatic in the case of skin care and decorative cosmetics.6% 10. Table 39 Fragrances Decorative Skin Care Hair Care Toiletries Bulgaria Perfumes Cosmetics 11% 12% 24% 19% 34% Share of Total 6.7% -0.4% 9.2% 3. United Nations Hair care has grown very slowly (see Table 39) throughout the study period however all other categories have seen continuous growth. retailers are putting a greater array of cosmetics on their shelves.5% 6.0% Population 65+ Y/Y growth rate 12.9% 3.55 53 54 Disposable income data is not available for Bulgaria. Despite new trends towards greater sophistication.5% 8.22% 1.95% CAGR 6.

2% 11. Bharat Book Bureau. but unlike in other countries skin care has experienced no overall growth.3% 0. United Nations Total 100% 0. in line with private consumption growth.modelled Perfumes Cosmetics 15% 10% 29% 18% 27% Share of Total 1.6% Source: Euromonitor.0% -0.57 In contrast to the general trend in the new member states.3% 1.5% 12.59% 1.2% 1.3% 1.7% 7.1% 5.59% 1.8% 0.5% 11.1% -0. 36 .8% 1.2% 0.5% 16. modelled statistics.2% -0.56% 1.4% 11.4% 4.0% 0.1% Czech Republic56 The cosmetics market in the Czech Republic has been the strongest in the EU12 in euro terms increasing by a compound annual growth rate of 11.2% 2.5% 2003 2004 166 169 3.1% 0. Table 42 Czech Republic Total C&T market UNIT 2000 millions of € 438 Y/Y growth rate Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0.1% 1.8% 1.1% CAGR 2000-2006 0.5% 1.1% -8.4% 2.6% 8.1% 1.5% 0.2% -0.0% 0.3% 2. United Nations Cypriots have very similar consumption patterns in terms of cosmetics compared to their European counterparts.1% -0. while fragrances have been the strongest.1% 1.1% 0.3% 2.5% Population 65+ Y/Y growth rate Private Consumption 1.0% 0. The Infoshop Disposable income data is not available for Czech Republic.7% 11. Global Insight.3% 0.1% 0.2% 1.2% 1.0% 1.1% -9. Czechs spent a larger share of their budgets on cosmetics in 2005 than they did in 2000. Table 41 Fragrances Decorative Skin Care Hair Care Toiletries Cyprus .1% 2.52% 2003 2004 2005 2006 643 693 775 840 4.5% 1.3% 14.1% Total population Y/Y growth rate 0.4% 2005 175 3.9% 1.4% 2.4% -0. United Nations All product categories have kept pace with the buoyant overall growth.1% -0. with skin care and toiletries having grown the fastest and have contributed the most to overall market growth.0% Contribution to Growth Source: Euromonitor.4% -0.54% CAGR 11.2% -1.6% 11.6% 9.2% 2.1% -0.0% -0. Global Insight.2% -2.6% 2. a trend that can only be attributed to increased interest in looking and feeling good.5% 11.September 2007 Table 40 Cyprus Total C&T market Per capita C&T consumption Total population Population 65+ UNIT millions of € Y/Y growth rate Y/Y growth rate Y/Y growth rate Y/Y growth rate 2000 178 2001 2002 176 161 -1.5% 2.6% 3.1% 0.1% 0.4% 1.5% over the review period.43% 2002 614 21.38% C&T as a % of total consumption 2001 506 15.7% 7.1% 2.4% Source: Euromonitor.Final Report .3% 21. 56 57 Euromonitor.9% 8.1% 0.5% 2006 CAGR 179 0.

35% 1.43% 1.9% 13.9% 14.6% 12.3% 3. United Nations New product launches helped make the skin care market very dynamic. have become the most significant factor in purchase decisions.9% 3.55% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 66 68 75 85 5.9% 13.4% Contribution to Growth Source: Euromonitor Total 100% 11. Developments in the cosmetics market are a reflection of strong GDP and consumption growth.8% 0.7% 2. The market saw double-digit growth during 2005 and 2006. Cosmetics Business 60 Disposable income data is not available for Estonia.85% 1.5% Population 65+ Y/Y growth rate 13.0% 3. 37 .5% -0. Natural ingredient-based cosmetics.2% Private Consumption 1.60 Cosmetics share of overall consumption fell noticeably over the period decreasing the share Estonians spend on cosmetics out of their total consumption.2% Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0. Czech consumers who were previously seen as traditional and conservative broke away from this reputation.8% 5.7% 10.5% 4.7% -0. as their consumption of cosmetic products is significantly higher than that of the rest of the population. 58 Euromonitor.5% 1.4% 12.0% 6.1% -0. The younger generation. Global Insight. July 2006.5% -0.8% 1.1% 10.5% 1.1% 7. more aware of global trends and fashions.3% 0.0% CAGR 2000-2006 1. Cosmetics and Toiletries in the Czech Republic: Executive Summary.euromonitor.1% 19.58 Estonia59 Estonia's purchases of cosmetic and toiletry products grew by a compounded 5.0% 11.9% 8. and wider distribution and availability popularised these new products. 59 Euromonitor. Manufacturers continue to target young women with children.September 2007 Table 43 Fragrances Decorative Skin Care Hair Care Toiletries Czech Republic Perfumes Cosmetics 13% 14% 25% 23% 26% Share of Total 9.7% -0.36% 1.8% 9. more effective marketing strategies. Direct sales of cosmetics and toiletries have seen significant growth and are especially popular among female consumers.71% 1.8% 5.5% 1. has helped spur spending in this industry as positive product experience and brand image.5% 11. rather than price.5% Increased product specialisation and sophistication played an important role in the dramatic growth of the cosmetic market from 2000-06. anti-age formulations.4% -0. and skin-firming treatments garnered great interest.4% 14. Increased advertising.4% -0.1% 3. It experienced on average a 6.Final Report .5% 4. Table 44 Estonia Total C&T market UNIT 2000 2001 2002 millions of € 61 64 66 Y/Y growth rate 5.9% rate of growth over the study period.4% 1.2% 1.6% Total population Y/Y growth rate 0.7% over the 2000 to 2006 period (see Table 44). Local brands were particularly successful at using advertising to boost sales. outpacing all of the other categories (see Table 45).2% 1.7% -0.com/Cosmetics_and_toiletries_in_the_Czech_Republic#exec.8% -0.9% 9.27% Source: Euromonitor. available at http://www.

6% growth rate. bath products and shower cream are expected to be the main growth drivers. United Nations Skin care.8% 8.6% 14.0% 1.9% 6. Availability of cosmetics and toiletries in supermarkets also grew. Hungary62 Sales of cosmetics and toiletries in Hungary grew by 8.1% -3.43% 2002 517 14.2% 0.35% 1. September 2006. hair care and toiletries together make up 80% of the market as the two smaller segments make up lower shares than the European averages.5% -0. All categories experienced comparable growth rates.2% -0.Final Report .3% 0.4% 21. possibly reflecting Hungarians' inclination to spend less on luxury cosmetics and more on necessities. making it easier to build public interest in these goods.35% 1. Global Insight.7% 5.euromonitor.7% 0.6% 9.4% 1.2% 0.4% 1.7% 7.3% 10.7% Consumers increasingly purchased products through direct sales and the internet.0% 8.3% -0.0% 8. Table 45 Fragrances Decorative Skin Care Hair Care Toiletries Estonia Perfumes Cosmetics 12% 11% 37% 20% 20% Share of Total 3. experiencing double digit growth at the beginning of the period and decelerating sharply to negative growth in 2006 (see Table 46).35% 2003 2004 2005 559 608 650 8.46% C&T as a % of total consumption 2001 451 14.6% 1. 61 Euromonitor. available at http://www.5% 1.4% 0.0% 8.5% Population 65+ Y/Y growth rate Private Consumption 1.3% 0. it is expected that all categories of cosmetics will continue their healthy growth.4% 16. although skin care was the strongest.3% -0.9% -0.9% 7. Cosmetics Design. Bharat Book Bureau Disposable income data is not available for Hungary. Industry Canada. 62 63 38 .1% -2.4% 0.1% 14.5% 2.9% 4.5% 4.29% Source: Euromonitor.5% 8.2% Total population Y/Y growth rate 0.1% over the 2000 to 2006 period.3% 8.com/Cosmetics_and_toiletries_in_Estonia#exec.6% 8.September 2007 With a respectable 6.3% Contribution to Growth Source: Euromonitor Total 100% 5.6% CAGR 2000-2006 0.4% -0. This last development is in part due to a depreciation of the currency.63 Table 46 Hungary Total C&T market UNIT 2000 millions of € 395 Y/Y growth rate Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0.3% -0.8% 6.4% -0. Euromonitor.61 Based on the patterns measured from 2000-06. although growth has also decelerated in local currency terms reflecting a less favourable economic environment in 2006 which also led to flat consumption levels after years of impressive performance. Cosmetics and Toiletries in Estonia: Executive Summary.3% 1.5% 0.32% 2006 CAGR 630 8.

1% 6. Toiletries.5% -1.9% 0. and depilatories.3% 2.51% 1. but per capita consumption of cosmetics remains one of the lowest in the EU12 region.6% CAGR 2000-2006 0.0% 1. The sharp decline in the share of consumption spent on cosmetics by Latvian consumers is in part due to by the increased standard of living.42% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 86 88 89 93 2.2% 4.6% and 5.1% -0.8% 7.6% Total population Y/Y growth rate 1.5% -0.93% Source: Euromonitor.3% 2.4% 13. Cosmetics and Toiletries in Hungary: Executive Summary.5% -0.8% 2. Domestic companies are struggling for market share.5% -0. August 2006. 39 .3% 4. Global Insight. 64 Euromonitor.64 Moderate growth is projected to continue.5% -0. holding only 10% of the total against the foreign producers' control of 90% of sales.1% Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0.7% 1.7% -0.1% 8. after a flat 2004-05.28% 1. the highest percentage sales increases are being seen in men's grooming products.euromonitor.14% 0.Final Report .4% 1.8% Population 65+ Y/Y growth rate 9.5% 4.7% -0. baby care products. which shadowed the pattern of perfumes through 2005.4% 1. colour cosmetics. while on the other hand many product segments are reaching saturation.7% 11.1% Supermarkets and pharmacies dominate the distribution of these products.6% 8. despite its very strong economic performance.7% 5. Latvia65 The Latvian cosmetics and toiletries market has experienced subdued performance compared to other new member states. Direct sales of fragrances.September 2007 Table 47 Fragrances Decorative Skin Care Hair Care Toiletries Hungary Perfumes Cosmetics 12% 9% 24% 20% 36% Share of Total 7.5% 0. Table 48 Latvia Total C&T market UNIT 2000 2001 2002 millions of € 80 83 87 Y/Y growth rate 4.8% 3.0% 4.5% 11.0%.5% -0.2% 1. have seen a sharp spike in sales from 2005-06. On the one hand. and skin care products gained popularity and registered higher overall sales.8% 1.8% 1. 65 Euromonitor 66 Disposable income data is not available for Latvia.4% 2.1% 1.5% 1. skin care and decorative cosmetics sales have been steadily climbing since at least 2001 and have shown respectable growth over the period at 4.0% Private Consumption 1. In specific subcategories.4% 28.3% 2. respectively. available at http://www.9% 10.6% 1.0% 6.45% 1.com/Cosmetics_and_toiletries_in_Hungary#exec. United Nations As shown in Table 49.7% Contribution to Growth Source: Euromonitor Total 100% 8.66 This can be explained only in small part by the negative population growth.0% 1.40% 1. both men and women become increasingly conscious of their appearance.

7% 1.3% 7.7% 1.2% 0. Table 50 Lithuania Total C&T market UNIT 2000 2001 2002 millions of € 115 127 138 Y/Y growth rate 10.4% 4.com/Cosmetics_and_toiletries_in_Latvia#exec.5% -0. 40 .4% 12. Global Insight. Overall sales.45% 1. International direct sales companies are projected to capture 20% of the market within the next five years.3% 0.6% 8.7% 3.euromonitor.8% CAGR 2000-2006 0.4% 8.1% 1. as they are throughout Eastern Europe. Cosmetics and Toiletries in Latvia: Executive Summary. July 2006.1% 0.36% 1.6% -0.3% 3.3% 9.9% 7.5% 9.5% Domestic Latvian producers hold only about 5% of the cosmetic and toiletry market.44% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 143 148 158 177 7.4% 11.6% Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0.44% 1.69 Once again total consumption outpaced growth in this market.5% 2.7% Population 65+ Y/Y growth rate 9. challenging traditional retail outlets to come up with innovative marketing concepts before they can capture a significant portion of the Latvian market.September 2007 Table 49 Fragrances Decorative Skin Care Hair Care Toiletries Latvia Perfumes Cosmetics 14% 16% 24% 24% 22% Share of Total 1.26% 1.2% 0.7% 2.4% 1.4% 67 Euromonitor.4% 1.5% 1. 68 Euromonitor 69 Disposable income data is not available for Lithuania.2% Contribution to Growth Source: Euromonitor Total 100% 2. hair care has been the strongest. Table 51 Fragrances Decorative Skin Care Hair Care Toiletries Lithuania Perfumes Cosmetics 21% 13% 23% 23% 20% Share of Total 6.4% 11.Final Report .4% 3. are dominated by imported products.6% 7.18% 1.9% -0. All segments have grown at health rates over the review period.4% -0.0% 16.1% 6.4% 5.6% 1.4% 6. making it difficult for them to gain much more of a foothold in the foreseeable future.3% -0.4% Contribution to Growth Source: Euromonitor Total 100% 7.7% 1.0% 1.8% 1.4% Private Consumption 1.67 Lithuania68 The cosmetics and toiletries market in Lithuania has been very strong over the 2000-06 period.2% 1.4% 7. sharply decreasing the share Lithuanians spend on cosmetics out of their budgets.1% 8.3% 1. United Nations Lithuanians spend a larger share of their cosmetics basket on fragrances and hair care than their European counterparts and less on toiletries and skin care.7% 1. which increased by 7% in 2005 and 12% in 2006.8% 11.3% 7. but unlike other parts of Europe.9% 14.9% CAGR 2000-2006 1.4% 17.3% -0.4% 9.4% Total population Y/Y growth rate 1.4% -0.13% Source: Euromonitor. underpinned by strong economic growth. available at http://www.0% 4.

available at http://www. the strongest area for local manufacturers was in bath and skin care products. quality and brand names could become more important factors.September 2007 Lithuanian consumers base cosmetic and toiletry purchasing decisions almost exclusively on price.6% Poland72 Poland's growing economy.8% 6. with all other segments registering lacklustre growth.1% 0.1% 3. buoyed by sales of fragrances.modelled Perfumes Cosmetics 12% 15% 21% 19% 32% Share of Total 2.7% Contribution to Growth Source: Euromonitor.1% 2.6% 2.6% 3.5% 2. 72 73 70 Euromonitor.71 Table 52 Malta Total C&T market Per capita C&T consumption Total population Population 65+ UNIT millions of € Y/Y growth rate Y/Y growth rate Y/Y growth rate Y/Y growth rate 2000 48 2001 46 -3.4% 0. bath and shower. July 2006.euromonitor.1% 5. Direct selling. Global Insight. GCI Disposable income data is not available for Poland.9% 2.5% 2.3% 2006 CAGR 59 3. As interest rises in health and hygiene. United Nations Total 100% 3.6% 3. both new companies and new products are expected to enter the Polish market over the coming years. Cosmetics in Russia.3% 2004 55 3.3% 0.6% 2. Nearly half of all Lithuanian cosmetic purchases are made in major supermarket chains.2% 0.3% 2002 49 6.5% 0. which is gaining in popularity and. As increases in disposable income continue.6% 2. 41 . Table 53 Fragrances Decorative Skin Care Hair Care Toiletries Malta .5% -4.5% 0. accounted for 13% of total sales in 2005. While the market as a whole is dominated by foreign importers.Final Report . 71 Disposable income data is not available for Malta. Cosmetics and Toiletries in Lithuania: Executive Summary.3% 2005 56 2. modelled statistics. and men's grooming products. Industry Canada.2% 0.6% 4.3% 2003 53 8.73 Growth in sales of both mass and premium products is expected to continue.6% 2.5% 2. Due to the industry's growth potential. marketing Euromonitor. Intercharm.5% 6.4% 2.2% 0. and increased Westernisation have created market growth and new demand in the cosmetics and toiletry industry.5% 0.8% 8.9% 0.8% 1.5% 2.3% 2.2% Source: Euromonitor.2% CAGR 2000-2006 0.1% 0. changing consumer lifestyles.com/Cosmetics_and_toiletries_in_Lithuania#exec. PRWEB. United Nations Skin care and decorative cosmetics have been the drivers in the cosmetics market.70 Malta Malta's cosmetics and toiletries market has grown at a rate closer to the EU15 countries as its per capita spending and population growth are very close to the EU15 average. A pick-up in GDP growth in 2005-2006 is reflected in a stronger 2006 for the cosmetics market.5% 2.

6% 0.45% Source: Euromonitor.6% Contribution to Growth Source: Euromonitor Total 100% 4.6% 0.4% 4.3% 0.0% 0.Final Report .51% 2005 2006 CAGR 2.27 2. Table 55 Fragrances Decorative Skin Care Hair Care Toiletries Poland Perfumes Cosmetics 16% 11% 28% 19% 27% Share of Total 6.6% 1. while hair care and toiletries have lagged far behind (see Table 55). 75 Euromonitor.56% 1. available at http://www.1% -0.1% 17.50% 1.7% 0.7% -10.com/Cosmetics_and_toiletries_in_Poland#exec.6% 9. Table 54 Poland Total C&T market UNIT 2000 billions of € 1.1% 0.7% 0.13 2. 42 .2% 2. United Nations Skin care and toiletries are the largest segments in the Polish markets. However. PWC.5% -9. Global Insight. making it the second most dynamic market in the EU12 after the Czech Republic.0% 16. which has been shown to build brand loyalty.6% Population 65+ Y/Y growth rate Private Consumption 1.5% 4. Cosmetics and Toiletries in Poland: Executive Summary.1% 2.0% -0.8% 6.0% 1. domestic manufacturers have had more success in Poland.5% 16.14 1.3% 4.5% 4. the industry should achieve tremendous growth.95 14.7% 0. in line with broader consumer spending and GDP growth.6% 1. reaching 34% in 2005.59% C&T as a % of total consumption 2001 2002 2003 2004 2.5% 16. Direct selling. Sun care and skin care. making higherclass products the major driver in the Romanian cosmetic market. Ziarul Financiar 76 Disposable income data is not available for Romania.93 1. are seeing increasing strength in competition from local companies. Growing awareness of self-image and increasing purchasing power should also help spur this industry expansion.euromonitor.5% 4.1% 1. as basic hygiene products become more visible to the nearly half of the population that lives in rural areas. remains extremely popular with consumers. Fragrances and skin care have been the most dynamic reflecting the improved living standards and growing appetite for luxury products.1% -0.5% -9.9% 6.8% 6.4% 0.September 2007 campaigns targeted at specific consumer groups will attempt to capture these new consumer trends. Between 2005 and 2010. which have traditionally been dominated by international brands.55% 1. due to more reasonably priced and higher-quality products.4% 1. 74 Euromonitor.5% 2.57% 1.0% 1.4% 1. Growth has been particularly impressive over the 200406 period.0% Total population Y/Y growth rate 1. May 2006.5% In contrast to the other Eastern European markets.1% -0.1% -0.7% -0.8% 14.1% 1.3% 8.2% CAGR 2000-2006 1.74 Romania75 A very strong economic environment has boosted consumption and the cosmetics market in Romania over the review period. the overall market is projected to grow by over 60%.1% 1.76 This has brought significant improvements to living standard.85 Y/Y growth rate Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.42 4.

available at http://www.06% 2006 CAGR 655 9. increased use of promotional material and offers. and new social and fashion trends have also helped sustain growth in this sector. Hair care and toiletries have been the laggards in the industry. Table 57 Fragrances Decorative Skin Care Hair Care Toiletries Romania Perfumes Cosmetics 23% 14% 22% 13% 28% Share of Total 27.4% -0. and the lowest among the EU27 in purchasing power parity terms. such as shower products and toothpaste.5% 9.2% 0.4% 0.5% 9. Cosmetics and Toiletries in Romania: Executive Summary. 77 Euromonitor. May 2006.8% Population 65+ Y/Y growth rate 11.5% -1.6% Private Consumption 1.04% C&T as a % of total consumption 2003 384 -1. United Nations Toiletries.3% -0.8% 1. domestic companies garnered most of the fragrance sales because they could offer more affordable products to most Romanians.0% 9.79 New product development.7% 29. Industry Canada 79 Disposable income data is not available for Slovakia.6% 3.0% Though international manufacturers led the way in most cosmetics lines.1% 3. are expected to provide the largest share of future industry growth.02% 2005 567 34. Global Insight. underpinning solid and steady growth in the cosmetics market. Romanians still have a very low per capita spending on cosmetics compared to other countries.6% 19.Final Report .1% 34. while skin care and decorative cosmetics have also been strong (see Table 57).99% Source: Euromonitor.7% 1.3% 1.com/Cosmetics_and_toiletries_in_Romania#exec. 43 .1% 16.4% 2.4% Total population Y/Y growth rate 1.euromonitor.2% 23. once the runaway leader in market share at more than 50% in 2000. have fallen off steadily and dramatically to just over one quarter of the total in 2006.4% -0.4% -0.7% 15.1% 1.10% 2004 423 10.77 Slovakia78 Healthy economic performance enables Slovaks to increase their consumption levels at double digit rates over the first half of this decade.8% 0.7% -0.6% 1.1% Contribution to Growth Source: Euromonitor Total 100% 9.7% 0. Hygiene products.3% 1. Table 56 Romania Total C&T market UNIT 2000 2001 2002 millions of € 389 386 390 Y/Y growth rate -0.1% -0. allowing them to make more informed purchasing decisions.3% 1.6% -0.39% 1.9% -0.September 2007 Despite the impressive growth in this sector.6% -7.0% 15.0% 15.1% 10. Competitive advertising campaigns and product promotions have helped consumers distinguish among the leading international cosmetic suppliers.8% 1.4% -0.4% 0.6% 2.23% 1.2% 18.3% -0. Romanians spend considerably less out of their cosmetics basket on hair care products than the European average. 78 Euromonitor.7% Per capita C&T consumption Y/Y growth rate Y/Y growth rate -0. Fragrances have grown at an impressive average annual rate of 28%.1% 15.4% CAGR 2000-2006 6.

9% 6.7% 9.9% 6.1% 1. Direct selling also remained popular. Global Insight. August 2006.4% 15.15% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 348 373 399 423 6.0% 0.30% 2. Currently.8% Contribution to Growth Source: Euromonitor Total 100% 6.9% 0. like sun care and premium products performed well. available at http://www.7% 7.9% 9. placing a strain on domestic producers. allowed Slovaks to purchase cosmetics like fragrances.0% 0. and anti-aging facial care are looked at as formerly unconventional (or even unknown) sectors that will generate a large portion of any future growth.0% 7.euromonitor. Growth in disposable income.9% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0. hair care.9% 6.0% 0.9% 2.1% 5.80 Slovenia81 Slovenia's cosmetic and toiletry market has grown inline with increasing income and consumption levels and is generally believed to have reached maturity in 200382. Cosmetics and Toiletries in Slovakia: Executive Summary.7% 15.5% 7.0% 0.Final Report .September 2007 Table 58 Slovakia Total C&T market UNIT 2000 2001 2002 millions of € 283 299 319 Y/Y growth rate 5.9% 0.0% Total population Y/Y growth rate 0. August 2006.0% 6.9% Supermarkets became the leading distributor of these products in 2005. as they are generally able to offer lower prices to consumers.5% 12. while fragrances and decorative cosmetics lagged far behind at just 11% and 13% shares.70% Source: Euromonitor.0% 7.83 As a result. 80 44 . natural-based cosmetics.0% 7.8% 0. Euromonitor.7% 6.9% 6. while sales in others. remained stagnant. available at http://www. as can be seen in the steady rise of sales in all categories from 2000 to 2006 (see Table 59) Table 59 Fragrances Decorative Skin Care Hair Care Toiletries Slovakia Perfumes Cosmetics 14% 13% 31% 17% 24% Share of Total 6.0% 5.9% 0.0% 0.6% 0.7% 0. skin care. respectively. compared to more specialised shops and drug stores. hair care. and toiletries combine to cover more than 75% of the market (see Table 61).0% 6.5% 6. any significant new growth will have to come from new markets or product categories. 81 Euromonitor 82 Euromonitor. such as baby care and oral hygiene.2% 1. United Nations Certain segments. colour cosmetics.6% 10.1% 0. Cosmetics and Toiletries in Slovakia: Executive Summary.5% 2.com/Cosmetics_and_toiletries_in_Slovakia#exec.0% 7. Entrance into the EU in 2004 opened the Slovakian marketplace for international cosmetic companies who no longer face large import duties.9% 9.6% 14. especially in more urban areas. men's grooming.0% 0.3% CAGR 2000-2006 0. New product innovations.8% 0.14% 1.7% Population 65+ Y/Y growth rate 9.85% 1.22% 2. with growth in most categories slowing down (see Table 60).98% 1.1% Private Consumption 2.euromonitor.com/Cosmetics_And_Toiletries_in_Slovenia 83 Disposable income data is not available for Slovenia. and skin care products in greater quantities.7% 0.

euromonitor.8% 0.0% 0.8% 7. Euromonitor 45 .1% 8. Multi-national manufacturers have consistently extended their dominance over the local market. slowing down thereafter and bringing the compound annual growth rate of the overall sector to about 5%. They put less emphasis on fragrances than other Europeans but consume relatively more skin care products.1% Population 65+ Y/Y growth rate 10.1% 6.1% 7.0% 0.2% 5.4% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.03% Source: Euromonitor.9% 8. The cosmetics market performance tracked the growth rates registered in disposable income per capita and overall consumption.5% 6.0% 0.0% 0.0% Total population Y/Y growth rate 2. except for hair care.1% 9.06% 1.5% Contribution to Growth Source: Euromonitor Total 100% 6.5% 2.8% 5.06% 1. are driving the industry's success. the cosmetics and toiletries sector experienced double-digit growth early in the decade.7% 8.7% 1. United Nations Slovenians have a fairly high per capita consumption level compared to their EU12 counterparts and in purchasing power parity terms it is close to the EU15 average.0% 0.5% 0. 84 Euromonitor.9% 1.3% 12. All segments have grown strongly over the review period. available at http://www.7% 2. Movements in the local currency vis-à-vis the euro has contributed some volatility to the market performance measured in euros. Customers have low brand loyalty and are easily swayed by lower-priced products.6% 6.9% In Slovenia.Final Report .08% 1.7% CAGR 2000-2006 0.7% 2.3% 2.0% 1. Global Insight.9% 8.2% Private Consumption 1.8% 5. July 2006.1% 3.1% 12. Table 61 Fragrances Decorative Skin Care Hair Care Toiletries Slovenia Perfumes Cosmetics 11% 13% 29% 22% 26% Share of Total 7.2% 2.7% 1. along with effective marketing strategies for higher-end goods. and will continue to be a powerful force in the market.2% 9.3% 1.9% 5.08% 1.0% 0.7% 0.com/Cosmetics_and_toiletries_in_Slovenia#exec.09% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 143 149 157 162 6.06% 1.84 Norway85 In Norway. Cosmetics and Toiletries in Slovenia: Executive Summary. prices for products consumed on a daily basis.9% 2.0% 1.9% 6.6% 2. 85 COLIPA.3% 3.7% 9. as can be seen in Table 62.September 2007 Table 60 Slovenia Total C&T market UNIT 2000 2001 2002 millions of € 108 117 132 Y/Y growth rate 8.

0% 5.1% 5.6% 0.2% 6.5% 0.6% -3.5% 1.com/Cosmetics_and_toiletries_in_Switzerland 46 .com/Cosmetics_and_toiletries_in_Norway COLIPA.95% 0.5% -2.1% Toiletries 26% 5. and skin care.5% 0.3% 0.0% 12.9% 5.4% 6.5% 0. Norwegians prefer to use healthy products that are free of alcohol and perfume. In addition to slow economic growth.6% -0. hair care.0% 0.4% 38. Switzerland87 Poor per capita income growth in recent years has led to very slow growth in the Swiss cosmetics and toiletries market.3% 1. Euromonitor 88 http://www.September 2007 Table 62 Norway Total C&T market UNIT 2000 2001 2002 2003 2004 2005 2006 CAGR billions of € 704 782 880 852 877 929 1022 6.4% 11.89% 0. as the market matures and growth potential declines. as well as deodorants.5% Private Consumption 0. It is interesting to note that Norwegians.3% 4. Table 63 Norway Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 6% 5.6% Per capita disposable income Y/Y growth rate Y/Y growth rate 5.7% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.4% Source: COLIPA Statistics Working Group Euromonitor has noted that the growing domestic economy has contributed to Norwegians' spending on products that suited their skin type. personality.2% -0.Final Report .0% 10.1% 2.2% 1.88 86 87 http://www.euromonitor.2% 2.91% 0.3% 17.euromonitor.94% 0.2% Population 65+ 3.9% 10.1% -0.7% 0.8% Hair Care 25% 4.9% 2. All segments in the cosmetics market contributed to growth over the period skin care contributed the most. United Nations Table 63 shows that Norwegians spend almost equal amounts on toiletries.0% 6.6% 0.1% 0.86 When it comes to baby care and sun care products. Even the increases in 2001-02 are due only to a temporary depreciation of the Swiss franc against the euro. and individuality.1% -0.94% 0.92% 0.1% 4.4% Total 100% 6. Global Insight. This has hindered the growth in fragrances.1% Skin Care 28% 10.94% C&T as a % of total consumption Source: COLIPA Statistics Working Group. spend the smallest shares of their consumption baskets on fragrances.3% Decorative Cosmetics 16% 6. and skin care according to the trade association KLF.4% Y/Y growth rate 11.5% 0.5% 1.5% 0.8% 9.6% 0.5% Total population Y/Y growth rate -0.5% 0.5% -13.2% 0. like the Finns and the Swedes.6% 9. colour cosmetics.2% 0. household penetration in this sector is slow. Norway is not a member of the EU so Norwegians enjoy tax-free shopping on all journeys abroad.

3% Skin Care 27% 1. hair care. Cpcpkg Magazine.2% 0. consumers have been resilient to high energy prices and interest rates.6% Per capita disposable income Y/Y growth rate Y/Y growth rate 5.2% 0.S.6% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.0% -0.69 Y/Y growth rate 5.8% 1.Final Report .49 1. Added value.8% 4. The price competition between private labels and branded mass retailers is an ongoing challenge for the industry.0% 0.6% 1.1% 0.S.5%.1% 0.9% 4.3% 0.3% Total population Y/Y growth rate 1. and sun care has been strongest. dollar terms over the 2000-06 period.8% -0.6% 1. However.8% 2.87% Source: COLIPA Statistics Working Group.6% Private Consumption 0. economy has grown strongly in the last few years.4% Decorative Cosmetics 10% -2.9% -4.3% 1.7% 0.3% 0. depilatories. as consumers began preferring specifically formulated products.3% 1.3% 0.89% 0.8% 0.2% -0.September 2007 Table 64 Switzerland Total C&T market UNIT 2000 2001 2002 billions of € 1.2% 0. including cosmetics and toiletries.4% 1. the cosmetics market has grown by 2. The Swiss spend almost equal amounts on skin care.4% 0.1% Total 100% 0.2% 0.93% 0.7% 6.8% 1. wellness. as can be seen in the "Share of Total" in Table 65. and convenience are the main selling points being addressed by manufacturers.95% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 1.3% Population 65+ 5.8% 20. U.5% 0. consumers’ expenditure of 5.6% 0.93% 0.58 1. Retailnet. and continued to spend at a healthy rate on consumer goods.94% 0.4% Hair Care 22% 1.6% -3. Market Size and Main Product Trends – United States89 As the U. IEHN Cosmetic Report.4% 0. and toiletries.2% 0.2% 0. Global Insight. Cosmetics Design.57 0.3% Toiletries 23% 0.65 1.8% Source: COLIPA Statistics Working Group According to Euromonitor demand for baby care. and new launches are often supported by strong marketing activities and sales promotions.8% 2.S. so cheaper private labels are doing well. Table 65 Switzerland Share of Total CAGR 2000-2006 Contribution to Growth Fragrances Perfumes 18% 2.94% 0.6% 0.3% in U.8% 0. The table indicates how sales in all segments have remained relatively flat over the 2000-05 period. less than the average growth in U.1% 1.9% -15.8% 0. The Infoshop.2% 0. 89 Euromonitor. Nourishers/anti-agers and firming/anti-cellulite body care both experienced healthy growth at the expense of general-purpose body care and facial moisturisers.2% 1.8% -3. Carefair.1% -4. United Nations Brand loyalty is low.63 1. GCI 47 .58 1.S.6% -2. Find Articles.

0% Total population Y/Y growth rate 0.S.3% 2.9% 0.59% 0.0% 1. United Nations In general.0% 5.Final Report .S.8% 0. – the market leader in terms of innovative product introductions91 – fuelled by strong consumer interest in pesticide.62% 0.0% 3. Total C&T market UNIT 2000 2001 2002 billions of USD 41.62% 0.5% 5.66 46. and microdermabrasion to fight off the aesthetic effects of aging.com/magazine/06_11_color_cosmetics_packaging.0% 1.54% 0.3% 1.0% 3.3% 0.1% 1.0% 1.0% 1.8% 2.September 2007 Table 66 U.5% 6.3% 2.0% 2.0% 0.5% 0.61% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 45.asp?n=60389-global-organic-cosmetic 92 http://www.92 The market for sun care products has also been 90 91 http://www. expecting higher quality products. and patronize dermatological offices for procedures such as Botox injections. consumers have become much more sophisticated buyers.6% 1.8% 6.com/news/ng.8% Per capita disposable income Y/Y growth rate Y/Y growth rate 4.52% Source: Euromonitor.84 47.com/Cosmetics_and_Toiletries_in_the_US 48 .3% -0. Global Insight.87 43.77 Y/Y growth rate 4.56% 0.3% 0.8% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 1.7% 1.S.6% 6. Market by Product Category 14000 12000 10000 8000 6000 4000 2000 0 2000 2001 2002 2003 2004 2005 2006 Sales at Retail Prices (Million USD) Fragrances Perfumes Decorative Cosmetics Skin Care Hair Care Toiletries Source: Euromonitor Skin care sales have been comparatively strong over the study period – and especially recently – driven by the baby boomers' high disposable incomes and their desire to look younger.3% 3.6% 2. enhanced package aesthetics.0% 0.2% Private Consumption 0.9% 1. Both women and men buy anti-aging creams.3% 1.8% 4.cpcpkg.3% 1.and hormone-free products.9% 1.4% 1.php http://www.9% 1.7% 4. chemical peels.9% 0.euromonitor.8% Population 65+ 3. better product performance.4% 2.9% 4. The organic and natural personal care segment is growing very quickly in the U.53 44.08 45. and / or improved product functionality90 at an affordable cost.94 2.cosmeticsdesign. Figure 14 – U.

9% 0. consumers are looking for improved features such as mascara that curls lashes.6% 0.3% 3.gcimagazine. Perfumes Cosmetics 12% 18% 21% 22% 27% Share of Total -0.asp?id=58809-us-hair-care 95 http://iehn.pdf 49 .com/news/ng.5% Contribution to Growth Source: Euromonitor Total 100% 2.95 Euromonitor expects moderate growth over the coming period.Final Report .93 Table 67 Fragrances Decorative Skin Care Hair Care Toiletries U.org/filesalt/IEHNCosmeticsReportFin.S.9% CAGR 2000-2006 0. quick dry nail polish and smudge-proof lipstick.94 While in the decorative cosmetics segment. depilatories.html http://www. 93 94 http://www. and oral hygiene. with the fastest-growing segments being hair care.3% 1.9% 1.3% The market for hair care is saturated and highly competitive.0% 0. and demand additional features such as water resistance and self-tanning.3% 2.4% 0.September 2007 strong as consumers become more aware of the dangers of sun exposure.1% 4.cosmeticsdesign.com/news/webexclusives/5692776. Innovative products targeted to ethnic minorities and men are giving a boost to this segment.

6 5.S.U.S. Figure 15 – U.3 2.1 1.0 2. individuals within the Hispanic community are also benefiting from a faster pace of disposable income growth. with tailored advertising campaigns (language-specific) and new product developments.0 2. Consumer Landscape The U.5 2007-12 2.9 3.Changes in the U.September 2007 Box 3 .S.4 5. Global Insight 3.5 2012-17 2.9 2.S.S. In particular. Popula tion Population Disposable Income (2000$) Average Household Income (2000$) Source: U.0 2. the Hispanic community's consumer "buying power" is becoming more prevalent and is being noticed by both retailers and consumer product manufacturers alike. Hispanic consumer spending on personal care products and services1 is advancing at a rate faster than the non-Hispanic population. Hispanic Population Share of Consumer Spending on Personal Care Products & Service Percentage Share of Consumer Spending on Personal Care Products % 16% 14% 12% 10% 8% 6% 4% 2% 0% 2002 2007 2012 2017 Source: U.0 1.9 3. population and is expected to near the 20% mark by 2020. Not only is the Hispanic population outpacing total population growth.S.S.9 5. Hispanic population currently accounts for 15% of the total U.7 1.6 0. Hispanic Population Indicators Ave ra ge Annual Grow th Rate s (%) 2002-07 Hispa nic Popula tion Population Disposable Income (2000$) Average Household Income (2000$) Ove ra ll U. Global Insight Table 68 . As a result.1 50 .Final Report .1 0. Census Bureau. Census Bureau. Retailers and personal care product manufacturers are incorporating strategies that specifically target this market.S.

4% -0. consumer needs and tastes are influenced by seasonal and quickly shifting trends and fashions. looking for new and innovative products and features from their favourite brands. Global Insight.9% 2.15% 1.beauty-on-line.369 3.10% 1.2% 3.277 3.7% 2.1% 0.8% 2.0% 1.2% 0.asp?eid=123 51 . In the improved economy.251 3.100 3.8% 0.2% Total population Y/Y growth rate 3.0% Population 65+ -3.8% 2.8% 0.Final Report .3% 3.6% 0. the Japanese are highly brand conscious.167 Y/Y growth rate 1.5% 0.467 1.98 Table 69 Japan Total C&T market UNIT 2000 2001 2002 billions of Yen 3. It is one of the world's most rapidly aging countries. In addition. and about one-quarter of its population is expected to be over the age of 65 by 2010.9% Per capita C&T consumption Y/Y growth rate Y/Y growth rate 0.6% 0.8% 2.9% 0.2% 0.September 2007 Market Size and Main Product Trends – Japan96 The Japanese market has continued to grow at a healthy rate in 2005. Beauty-on-line.9% 1. The Infoshop. which has had a calming effect on the price competition from previous years.2% 1. Pacific Islands Centre http://www.8% 1.5% -0. Industry Canada.18% 1.7% 0. Austrade. mainly driven by the skin care and decorative cosmetics segments.1% 0.8% 0.8% 2. 96 97 Euromonitor.10% 1.97 The market has recently accelerated in 2005-2006 after a few slow years.4% Private Consumption 1.1% 0.com/Cosmetics_and_toiletries_in_Japan 98 http://www.9% -1.2% 2.4% Per capita disposable income Y/Y growth rate Y/Y growth rate 0.5% 0.1% 0.7% 2. United Nations In general. making some sales insensitive to economic downturns. making it important for manufacturers to introduce new products very quickly.6% -0.7% 2.3% 1. particularly in hair dyes and premium skin care products.1% -0. The latter is the fastestgrowing and most competitive segment of the market. This is having a significant impact on the cosmetics market.2% 0. Aging is one of the most important concerns of the Japanese population.12% C&T as a % of total consumption 2003 2004 2005 2006 CAGR 3. the Japanese regard certain cosmetics and toiletries as essential.7% 0.20% Source: Euromonitor.com/ebn/newsletter.9% 2.9% 2.euromonitor.132 3.15% 1. However. consumers have begun moving up-market.

Japanese consumers who do use fragrances prefer light over heavy perfumes. more fashionable and trend-conscious consumers leading the way.8% 0. respectively. so it is important to offer products designed for and geared to the local market.September 2007 Figure 16 – Japan's Market by Product Category 1600 Sales at Reatil Prices (Billion Yen) 1200 800 Fragrances Perfumes Decorative Cosmetics Skin Care Hair Care Toiletries 400 0 2000 2001 2002 2003 2004 2005 2006 Source: Euromonitor Table 70 Fragrances Decorative Skin Care Hair Care Toiletries Japan Perfumes Cosmetics 2% 20% 45% 19% 15% Share of Total -1. consumers are looking for improved features such as mascara that curls lashes. skin care products make up nearly half of the Japanese market. Euromonitor expects strong growth.7% 0.1% Contribution to Growth Source: Euromonitor Total 100% 1. with skin care. Price competition will subside further and premium products 52 . As shown in Table 70.2% 0.1% 1.4% 3. and hair care continuing to lead the way.0% 0. with hair care and decorative cosmetics following far behind at 19% and 20% shares.Final Report .4% 0. Skin-lightening and anti-aging products are popular among consumers of all ages. with younger. light-texture products that provide UV protection being the preferred choices. consider their skin very different from Europeans.8% CAGR 2000-2006 0.9% Japanese women.9% 1. but are increasingly being seen as stress relievers. Because of the long tradition of low use of fragrances. and smudge-proof lipstick. quick dry nail polish. with non-greasy.1% 0. to the point where it is estimated that the men's cosmetics market has tripled over the 1990s. like most Asian women. Men's skin awareness is dramatically increasing. Fragrances are used much less in Japan than in Western countries. In the decorative cosmetics category. colour cosmetics.

5% 11.8% 3. Keeping the body in good health is a deeply rooted tradition in Chinese culture. consumers have little experience with cosmetics products. 99 Euromonitor.2% 0.2% 11.89 2002 6.7% 3. Market Size and Main Product Trends – China99 The Chinese cosmetics market is very dynamic. Table 71 China Total C&T market UNIT billions of € Y/Y growth rate Per capita C&T consumption Y/Y growth rate Y/Y growth rate Total population Y/Y growth rate Population 65+ Y/Y growth rate Private Consumption C&T as a % of total consumption 2000 2001 5. skin care products account for the lion's share of the market and have seen the fastest growth – an average of almost 20% over the 2001-06 period. and anti-agers are the best-performing sub-segments. nourishers.2% 9.1% 1. China National Commercial Information Centre. the Chinese prefer skin care products that provide lighter complexion and UV protection – while fragrances remain a very small share (2%) of the total market.1% 0.9% 13.2% 0.Final Report .04% 2004 8.33 11.00 12.6% 12.9% 6.2% 12. Like other Asian countries.6% 2. Cosmetics Design.3% 1. Global Insight. especially among the emerging middle class and its increased disposable income. China Daily.06 13. As the market is still in its relative infancy.3% 2.6% 2. reflective of the tremendous GDP growth China has experienced over the past few decades. Facial moisturisers.8% 8.beauty-on-line.02% 2003 7.99% Source: Euromonitor.3% 0.9% 13.0% 7.9% 9.04% 2006 CAGR 10.6% 0. making brand loyalty a very difficult objective for new entrants. and consumers are returning to an interest in traditional medicinal herbs and plants.101 In addition.7% 10.9% 11. Hong Kong Trade Development Council 100 Disposable income data is not available for China.14 10. Innovation and more effective distribution strategies will play key role in increasing sales.5% 0.September 2007 will gain market share.05% 0.5% 0. 101 http://www.6% 2.4% 9.3% 9. consumers are increasingly aware of health and safety issues.6% 0.com/ebn/newsletter.3% 1.100 The overall market has grown by a cumulative annual growth rate of 11. Beauty-on-line.47 9.7% 2.04% 2005 9.8% 1.9%.asp?eid=124 53 . following a number of product withdrawals that have left no brand safe from a loss of public confidence. United Nations As illustrated in Table 71.6% 2.1% 1.

5% CAGR 2001-2006 0.September 2007 Figure 17 – China's Market by Product Category 4500 Sales at Reatil Prices (Million USD) 4000 3500 3000 2500 2000 1500 1000 500 0 2001 2002 2003 2004 2005 2006 Fragrances Perfumes Decorative Cosmetics Skin Care Hair Care Toiletries Source: Euromonitor Table 72 Fragrances Decorative Skin Care Hair Care Toiletries China Perfumes Cosmetics 2% 10% 38% 22% 27% Share of Total 16.3% 8. albeit from a very low base.9% 11.asp?eid=124 54 . This product provides internationally comparable estimates and forecasts of consumer spending.8% Contribution to Growth Source: Euromonitor Total 100% 11. It is based on data from the International Monetary Fund. according to Euromonitor. 102 http://www.6% 12.com/ebn/newsletter.Final Report . low-end of the market – and as these areas become more affluent they start trading up to more expensive brands and specialised products. population growth and income distribution to influence spending patterns. I.9% Men's cosmetics sales surged 76% in 2004.4% 1. As more people move to urban areas.3% 19.6% 6. income distribution and other measures of consumer market characteristics.9% 1. there is growth potential in the essential. Consumer spending for each country is modelled using pooled data and estimated as a function of disposable income and allows for other determinants such as household wealth.102 The Chinese market has room to grow on all levels. and thus show a good deal of growth potential.6 . World Bank and the United Nations.3% 7.beauty-on-line.Market Size Forecast Methodology The cosmetics market forecast is based on Global Insight's Global Consumer Markets product.4% 1.

45 2.87 1.51 1.48 0.33 0.98 1.06 2.87 1.54 0.42 18.33 1.55 3. thus growth rates incorporate expected currency fluctuations in the countries which have not yet adopted the euro.75 0.84 0.80 1.34 2.51 3.52 11.84 0.10 9.30 0.9% 2.5% 4.0% 2.7% 4. Billions of € 2011 2016 2021 1.46 12.56 1.4% Source: Global Insight based on Global Consumer Markets The cosmetics market in the newer members of the EU is expected to continue growing at a faster pace than the EU15 over the forecast period.4% 4.18 1.7% 6.49 0.22 0.3% 4.26 2.4% 4. Growth in this sub-category is used as a proxy to forecast spending on cosmetics and toiletries. a reflection of their more rapid economic development and improving income distribution.09 0.36 2.73 0.76 0.26 0.56 14.54 12.34 0.02 2.42 0.99 0.37 4.23 0. During the second half of the 55 .7% 3. and in local currency units for China.0% 7.12 2.9% 5.45 4. The Global Consumer Markets forecast horizon is to 2020 and is extended to 2026 for the purposes of this project.S.17 1.50 2.43 16.18 0.62 Market Size.2% 5.26 0.81 1. Japan and China.95 2.40 2.26 0.19 1.44 1.9% 3.8% 9.59 1.84 17.4% 10.57 8.0% 3.67 0.5% 5.08 0.39 9.50 0.09 3. Results Table 73 shows our forecast of the cosmetics market in 5 year intervals for the countries of the European Union plus Norway and Switzerland.42 0.92 1.94 0.97 2.9% 6.1% 2.12 10.39 4.0% 4.7% 4.94 2.9% 10.08 0.33 3.18 0.75 10.9% 6.1% 7.67 13.3% 5.90 2.53 CAGR 2006-2016 2016-2026 4.0% 3.8% 6.94 3.14 15.49 11.41 0.11 17.23 0.76 0.9% 4.Market Size Forecast – Europe Country Austria Belgium/Lux.64 7. Table 74 provides an overview of the EU market along side the market projections for the U.17 0.24 1.7% 11.September 2007 To forecast cosmetics market size in the various countries we focused on a sub-category within the Global Consumer Markets structure called personal care expenditures.0% 8.34 0.06 2.20 2026 3.9% 4.9% 4.16 7.7% 3.67 14.2% 4.2% 9.43 1. Table 73 .39 1.98 0.49 0.29 1.80 1.3% 5.9% 3.8% 4.0% 5.16 20..71 0.09 3.96 1.33 0.5% 6.5% 4.06 21.19 1.6% 4.65 2.59 9. Market size is forecasted in euro terms for all European countries.41 2.10 0. Population projections are provided by the United Nations.31 0.90 5.54 18.63 0.04 2.Final Report . Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom Norway Switzerland 2006 1.51 1.06 13.45 1.65 0.2% 4.50 0.9% 3.41 3.42 1.19 1.17 11.2% 14.09 0.43 1.6% 4.3% 13.29 0.8% 5.6% 4. Japan and the United States.93 0.13 1.48 0.17 0.5% 4.4% 3.15 5.18 0.72 1.99 2.7% 5.91 22.31 1.18 4.80 1.6% 5.3% 3.0% 5.79 0.40 3.59 15.

Final Report - September 2007

projection period growth slows however to more moderate rates in line with the general economy. The three Baltic countries as well as Romania and Slovakia are expected to be growth leaders, experiencing double digit average growth rates over the next 10 years, before decelerating. Per capita spending in the new member states will also grow faster than in the EU15, helping to narrow the gap that currently exists between spending levels. The average consumer in the EU12 currently spends only about two-fifths of what their EU15 counterpart spends on cosmetics, we expect that this gap will narrow to about four-fifths by 2026. Table 74 - Market Size Forecast – Overview
Country China * Ja pa n** U.S. EU12 EU15 EU27 2006 10.3 3.5 47.9 5.2 50.9 65.5 Ma rke t Size , Billions of LC 2011 2016 2021 20.8 38.7 67.0 3.9 4.7 5.7 62.9 78.4 94.9 8.5 12.2 15.9 61.3 73.4 88.1 81.8 100.5 122.4 2026 108.8 6.7 114.5 21.1 111.5 156.2 CAGR 2006-2016 2016-2026 14.1% 10.9% 3.1% 3.6% 5.0% 3.9% 8.8% 5.6% 3.7% 4.3% 4.4% 4.5%

*Chinese market size is given in USD **Japanese market size is in trillions of yen Source: Global Insight based on Global Consumer Markets

The Chinese market is seen as the fastest growing of the countries examined, both in overall market growth and per capita spending levels. The rapid expansion of China's economy and its middle class will provide a strong underpinning to consumer spending. Spending on cosmetics is expected to maintain double digit growth rates over the whole forecast horizon. The market's growth potential is large given the currently low per capita spending levels. In 2006, the average Chinese consumer spent only USD8 on cosmetics that is expected to grow to about USD108 in 2026, although this will still be well below expected European averages. The U.S. cosmetics market is expected to grow at rates comparable to the EU over the next 20 years, although the U.S. will be stronger over the first half of the projection. The EU stays strong overall as some of the slow down in the new member states will be outweighed by a pick-up in the EU15 countries. Growth in Japan's cosmetics market will be weighed down by projected declines in its population and very low inflation rates.103

103 In euro terms growth in the U.S. cosmetics market will be weaker as the USD is expected to depreciate over the forecast horizon, while the Japanese market will seem stronger in the first half of the projection as the yen is forecasted to appreciate and then gradually depreciate again after 2011 slowing overall growth.

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Final Report - September 2007

Figure 18 - Market Size Forecast – Per Capita Cosmetics Consumption
Country China * Ja pa n** U.S. EU12 EU15 EU27 2006 7.9 27.1 163.8 63.8 155.4 134.0 Pe r Capita Spe nding, LC 2011 2016 2021 20.8 38.7 67.0 30.1 36.6 44.9 205.1 244.7 284.7 104.6 151.4 200.9 185.1 219.8 262.2 166.3 204.1 248.6 2026 108.8 53.0 331.1 270.4 329.8 317.5 CAGR 2006-2016 2016-2026 17.1% 10.9% 3.0% 3.8% 4.1% 3.1% 9.0% 6.0% 3.5% 4.1% 4.3% 4.5%

*China per capita spending is given in USD **Japanese per capita spending is in thousands of Yen Source: Global Insight

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Final Report - September 2007

I.7 - Structure of Industry and Production
This section investigates the structure of the cosmetics industry in all countries under review. Economic concepts analysed include: production value, value added, labour productivity, number of employees, personnel costs and number of enterprises104. While the European and U.S. cosmetics industries are comparable – for instance in the size of their total production value – there are several differences in the market as well as their production structure. The European market is clearly more fragmented than the cosmetics industries in Japan and the United States. While in the latter countries, the markets are dominated by a few large companies, a high number of small companies are acting in the European market. Consequently, production on the whole in the U.S. and Japan has higher capital inputs than in the EU, making it more productive. In Europe, labour input plays a stronger role in the production process. In France, the natural home country of the industry’s high-end brand names, high-paid R&D staff are at work. The handcrafted character of many European products is expressed by a high share of micro-businesses – especially in Italy, while in the U.K., production processes are more similar to the United States. Poland, by far the most important manufacturer of cosmetics products in the new member states, is in the process of catching up, to a great extent due to outsourced production establishments that make use of significantly lower wages. This characterisation holds not only for the current industry landscape, but also for developments on the employment market. While in the EU, and to a lesser extent in Japan, the cosmetics sector has continuously created jobs, the employment figures for the U.S. indicate a pronounced job reduction in recent years, leading to impressive growth in productivity.

Production Value Comparison
When comparing the production value it can be observed that: In 2004, the European Union was the largest cosmetics manufacturer in the world, with a value in production of €35.5 billion, followed by the U.S. with €28.7 billion. Within Europe, France produces 43% of the total cosmetics industry output, which is two-and-a-half times as much as the next-biggest manufacturer, Germany. 95% of the overall production takes place in six key countries. Comparisons of production values between the U.S. and Europe can be difficult to make, due to different nomenclatures and definitions (e.g., double-counting of production value in the case of the data from the U.S. Census Bureau).

104

Data obtained from national statistical agencies: Eurostat, U.S. Census Bureau and the Japanese Ministry of Economy, Trade and Industry (METI), thus methodologies of data collection may differ.

58

the U. Census Bureau: Statistics for Industry Groups and Industries 2005.455 7. Japan EU27** 34. Source: Eurostat 2004. Estonia.333 29.7% 59 . Lithuania.314 7.000 € 0€ EU-27 (total) United States Japan* France Germany Italy United Spain Kingdom Poland Belgium Nether.954 34. Italy. and Japan dominate worldwide cosmetics production. **Information on China not made available. Czech Republic.Final Report . Japanese Ministry of Economy.000 € 15. Malta.07 in 1999 (average of period.000 € Production value 2004 in million € 30.September 2007 Figure 19 . 1999-2004 3. Spain.Overall Production Value and Growth U.610 8.S. *Japan – 2003 value. Norway.Statistics for Industry Groups and Industries 2005.4% 6.468 2004 28.K. When comparing the level of production. U.966 7. U. Trade and Industry (METI).553 34.880 32. Sweden.S. During the period from 1999-2004. Table 75 . Slovenia.546 29. Trade and Industry (METI) 2003.861 30.331 France. Japanese Ministry of Economy.S. was measured in current U. Ireland.25 (aop) in 2004. While Europe.S.465 32.693 CAGR.128 2002 35. dollars.202 32.000 € 5. the U.342 2000 29.000 € 35.000 € 25. aop) to 1. Latvia.S. 1999 23. Cyprus..000 € 20..698 33.Rest of lands EU-27 Source: Eurostat 2004. U. Census Bureau . Luxemburg.978 31.0% * Japan 1999-2003 ** Data for single years not reported from: Belgium. Germany.Production Values Compared 40.949 2001 31. dollar fell against the Euro from 1. Portugal.9% 2. Romania.061 2003 28.S.000 € 10.S. one must take into consideration that the size of production in the U. Poland 27.052 10. there are discrepancies regarding the growth rates of these industries. Bulgaria.704 3.

For EU Member States. Since more than 95% of the market is well covered by the available data.Final Report . which reports data on ‘Manufacture of perfumes and toilet preparations‘. We considered the NACE 24. published by the Economic and Industrial Policy Bureau of the Ministry of Economy. for this purpose adjusted data has to be included in the comparison. which consists of three sub-categories: "Makeup and skin care products. data on the cosmetics sector is scarce. basically published in the framework of the annual survey of manufacturers. toiletries. including sunburn prevention.6% of the total manufacturing production value. Census Bureau. which covers almost the same production range as the respective categories in Europe and Japan. Not included is the production of essential oils. The 60 .September 2007 Box 4 .52 category. the data situation can be characterised as sufficient. Furthermore. Thus. "Hair care products". Sometimes it was necessary to use the more detailed data breakdown available on a slightly more aggregated level in order to estimate – e. not every piece of information is available at 4-digit NACE or 6-digit NAICS codes. and the United Kingdom. Although the available data on the cosmetics industry do in principle allow a comparison of productivity between countries. The share of the cosmetics industry in Europe is on average about 0. albeit not an exact match. the number of companies in the European cosmetics industry (which is available on the 4-digit level) or per size group (which is only available at 3-digit-level). Analysis for Japan is based on data stemming from the Industrial statistics office.g. We considered category 1770 "Cosmetics. In total. and "Miscellaneous cosmetics. While undoubtedly useful to monitor productivity growth over time. one has to be careful when using this indicator to compare international competitiveness.. toothpaste and toilet preparations". which is so far available only at a more aggregated industry level. including perfume and eau de cologne".S. We considered the NAICS category 325620 "Toilet preparation manufacturing". Single countries with a bigger share and larger cosmetics industries are France. An exception is the production of toothpaste. the comparison of absolute values at a single point in time is flawed by a high number of inconsistencies. Because of the data collection procedures used. Poland. This class includes perfumes. oral hygiene. (METI). and virtually all make-up and beauty products. data provided by the U. production of cosmetics is virtually non-existent in some countries. for some of the New Member States. toothpaste and toilet preparations" of the revised industrial classification of the census of manufacturers. the cosmetics industry contributes only a small share to the overall industrial production. have been used. Trade and Industry.Data Availability and Comparability Issues The analysis presented in this section is based on various sources. and depilatories. Also. data have been collected from the Eurostat NewCronos database. which is included in NAICS 325611. Comparison to the Overall Manufacturing Industry In many European countries. For the United States. the categories are comparable.

shed more than 15% of its workforce. has a slightly higher share in the total manufacturing sector. Table 76 reports the development of the number of employees in the U. Most of the European cosmetics sector is located in France. In Japan. there are about 30. albeit starting from a low base. Germany. Japanese Ministry of Economy. and the EU106 since 1999.5 0.K.S.4 0.6 0.6 0. In the EU. Especially strong growth.6 Percentage 1.1 Finland Slovakia 0.8 1. compared to both the EU and Japan – while the EU and Japan have added around 7% more jobs over the 1999-2004 period.Production Value – C&T as Share of Total Manufacturing (2004) 2.5 0. Census Bureau: Statistics for Industry Groups and Industries 2005. Employment and Structure of Companies Over 142. both in relative and in absolute terms.7% in the EU15. took place mainly after 2002.S.Final Report .0 EU 27 United Kingdom Belgium United States Denmark Sweden Japan Source: Eurostat 2004. while the share of the Japanese industry is lower than in Europe. Italy.000 of these.September 2007 cosmetics industry in the U.105 Figure 20 . whereas in the U. the U. Census Bureau: Statistics for Industry Groups and Industries 2005. several groupings of the 27 EU member states are presented.3 0. with approximately 30% growth registered in 1999-2004.000 employees in the cosmetics industries. The numbers for these six countries have been presented together as the core of the European cosmetics industry.. The reduction of jobs in the U.1 0. about.1 0. 105 61 .S. Italy.3 0.S. It is a striking observation that in the EU..4 0.8 0.8 0.0 Estonia Cyprus Italy Spain Germany France 0. opposite trends can be observed for the U.1 0.5 0. 54.S. Japan. and Japan taken together. and Poland together account for more than 127. France. Spain and Poland. Trade and Industry (METI) 2003. U.2 0.S.1 0.S. the number of employees is 50% higher than in the U. Germany. employment growth has been remarkably pronounced in the new member states. Japanese Ministry of Economy. and has been more modest at 4.S. Trade and Industry (METI) 2003.0 Hungary Lithuania Netherlands 0. 106 Since data on the cosmetics sector is not available for several new member states as well as for Greece. Over time.000 people are employed in the cosmetics industry in Europe.000 employees work in this industry.0 1.1 Romania 0.1 0.1 Austria Poland 0. can be observed for Poland. Spain.S.2 1. the U. the United Kingdom. U. Data source: Eurostat 2004.

777 114.2% **Without Malta. the material costs account for only 41..433 2000 65.2% 0.614 127. suggesting that the American and Japanese industries are more efficient than Europe’s manufacturers of cosmetics and toiletry.893 27.214 127.771 28. Table 76 .214 126.S. Bulgaria.782 142. and Poland 1999 63.329 126. companies have been reducing jobs.394 15. Malta. France.S.141 13.375 116.4% 109.107 This number included the acquisition of raw materials. In the U.241 0. Czech Republic ****Growth in Japan between 1999 and 2003.072 132. Luxembourg.200 123. U.4% 1.574 119. U.906 27. which is based on data on national accounts stemming from the national statistical offices (NSI’s).Number of Employees in the C&T Industry U.. Higher figures on gross value added and lower employment figures imply a higher level of productivity in the U. a European phenomenon contrasting recent U. Germany. Trade and Industry (METI) At the same time. A first look at the data suggests that these costs for intermediate goods are higher than in the U.701 14.467 110. as well as services and goods purchased for resale. Japanese Ministry of Economy. 107 62 .725 17. that the European countries with the biggest cosmetics industries have the highest shares when it comes to the purchase of intermediate goods and services in this particular industry. Italy.122 124. Spain. Czech Republic ***Without Greece.600 29.125 1.S.047 120.S.8% 1.637 138. France. Census Bureau. 1999-2004 -2.S.953 115. Bulgaria.095 123.8% of the production value. Source: Eurostat.S.499 2002 66. the European sector has been steadily creating new jobs since 1999.September 2007 The statistics on employment and production value tell two stories. according to the U.4% of the overall production value in 2004.796 134.8% 4. In Europe. In this view. while U.013 142.125 2004 54. or in Japan. Census Bureau: Statistics for Industry Groups and Industries.199 13. Italy.Final Report .7% 118. apart from being restricted to the new member states this process is essentially not a relocation phenomenon. the purchase of intermediate goods and services accounted for about 81.S. According to Eurostat data. Purchase of Intermediate Goods and Services It is not surprising.S. Since employment grew in the European countries. Luxembourg 120. Japan EU-27*** EU-15* EU-12** Germany. this development can be regarded as a jobdriven growth process.996 143.K.848 2001 67.055 28.397 CAGR.820 2003 62.204 17.903 128. U.340 *Without Greece.K. and Japan.661 113. developments. Spain. where growth across industries as a productivity-driven process.

The reasons have been worldwide rising costs for commodities in this period.108 In Japan. while sharing similar raw commodity prices with the other countries. from 31% in the year 2002 to 43% in 2005.Purchase of Intermediate Goods and Services in Europe (2004) EU Total €28.7% in 2003.September 2007 Figure 21 . there was an increase of the share of material costs in the U. which can be partly explained by higher wages in Japan. the share of material costs. averaged 31.S.S.8 Billion Rest of EU25 4% Belgium 2% United Kingdom 10% Poland 4% Netherlands 1% Spain 5% Germany 17% Italy 12% France 45% Source: Eurostat Remarkably. according to official statistics. Census Bureau. according to official statistics. Annual Service of Manufacturers 2005 63 .Final Report . 108 U.

(64 %). The share for China is remarkably higher (87%). Romania. the striking differences stemming from the national data available are significantly reduced. of the Chinese manufacturers while sharing world market prices for raw materials. ES. and the same applies for China. The data show that in the year 2004 the share of purchases of inputs and supplies on the overall production value is basically similar in Europe (65%). especially low wages. Denmark. Romania(RO). Slovakia(SK). FR. the share of intermediate inputs is not increasing for Europe and Japan. Sweden. Figure 22 . Spain(ES). IT. Hungary(HU). Germany(DE). suffer from a lack of conformity in data collection and presentation. For the U. Slovakia Source: Global Insight.S. and Japan really? Although structural differences among the countries explain part of the statistical differences in the share of intermediate goods.2006 100% Percentage Share % 80% 60% 40% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 USA Japan China EU-17 NMS (HU PL RO SK) DE. This development is already observable in the official statistics. Finland.September 2007 Box 5 . This task has been addressed in the construction of Global Insight’s comprehensive World Industry Monitor. adjustments are necessary in order to make them comparable. By including these data into the comparison. United States. Since cross-country comparisons on the industry-level. the U. Netherlands.Share of Intermediate Goods: How big are the differences between Europe. which can be explained by strong growth of labour input in the cosmetics sector in these regions. Since official national statistics at detailed industry level are often still not tailored for meaningful international comparisons. However. they do not provide the whole picture. France(FR).Estimated Percentage Share of Purchases for Intermediate Goods (after data adjustment for world regions) 1997 .K. which is in accordance with low factor costs.. Italy(IT). and several groupings of EU countries since 1997. Austria. Ireland. Eurostat Figure 22 and Table 77 the development of the share of intermediate inputs on total C&T production value (based on the adjusted data) for the U..Final Report .) NMS: New Member States. based on official statistics. World Industry Monitor. there are substantial differences in the definitions and concepts used when collecting data on purchases of intermediate goods and services. PL. China. United Kingdom(U. Poland. and Japan (54 %). the percentage is increasing over time.S. reflecting commodity price increases. Japan. Poland(PL).S. UK Including: Belgium. Portugal. 64 .Hungary.

and United Kingdom. For the U. Figure 23 . France. Census Bureau. Japan China EU-17* NMS Germany. Austria. Denmark. Cosmetics industry workers in France. Ministry of Economy. Source: Global Insight estimates. Germany. World Industry Monitor. where lower unit labour costs exists. missing information on capital services and methodological differences in capital stock measurement. Spain. Italy. the U. Hungary. apparent labour productivity based on the U.S. U.S.Estimated Share of Purchases for Intermediate Goods in the C&T Sector O U. however. and Japan. Eurostat aggregated data.S. the use of specific price deflator concepts.September 2007 Table 77 . Italy. and about 25 percent higher than in Japan. Poland. recognize various inconsistencies caused by differing classification schemes.777 euro per person employed. poor data availability at a disaggregated industry level. the Netherlands. Spain. Slovakia.. Poland. 1997 54% 53% 84% 66% 54% 68% 1998 56% 51% 87% 65% 62% 67% 1999 56% 49% 87% 66% 61% 69% 2000 60% 54% 88% 68% 65% 70% 2001 63% 55% 88% 67% 65% 70% 2002 61% 52% 89% 65% 60% 68% 2003 67% 53% 89% 65% 60% 68% 2004 64% 53% 87% 65% 58% 68% 2005 64% 54% 88% 64% 54% 66% 2006 64% 54% 88% 63% 53% 66% 68% 67% 69% 70% 70% 68% 68% 67% 66% 66% *Including: Belgium. Portugal.S. France. U.S. Romania. Germany.Final Report . Sweden. Spain. the respective values for the EU15 countries are approximately one-fifth of this value. annual manufacturing survey shows a gross added value of 311. Unit Labour Costs The EU average unit labour cost in the cosmetics industry is at about the same level as in the U. international comparisons of labour productivity are increasingly used as an indicator of industry competitiveness. Finland. We must. France.K. Germany.Unit Labour Costs 60 51 Thousands of Euros 50 40 40 30 20 10 0 25 Av era ge Be lgi um De nm ark Ge rm an y Es to nia Sp ain Fr an ce Ita ly Cy pr us Lit hu an ia Hu ng Ne ary the rla nd s Au str ia Po lan d Ro ma nia Slo va ki a Fin l an d Sw Un ed ite en dK ing do m No rw Un ay ite dS tat es Ja pa n 44 38 46 39 33 40 36 34 43 37 29 41 30 13 8 6 9 10 4 6 Source: Eurostat. idiosyncratic data collection procedures. and Industry – Japan Labour Productivity In order to compare national industries with regard to production efficiency. 65 EU . Ireland. while at the lower end of the spectrum are workers in the new EU member states. In the case of the cosmetics industries of Europe. Italy.S.K. Belgium and Sweden are the highest paid in Europe. productivity calculations based on the available data sources show pronounced differences. Trade. U.

S and Europe.S.000 100. This long-term growth difference explains a part of the productivity gap between the U.S. a better use of ICT in non-ICT producing industries. the EU KLEMS study being one of them. The analysis of manufacturing productivity growth rates has been the heart of a variety of major research activities in the recent years. Japan EU-27 *2003 estimated for Japan Source: Eurostat.000 200. reveals that the growth difference can be traced back to a greater share of ICT industries on total manufacturing.S has outpaced European productivity growth significantly.S. 66 . and EU27 in 2004 Gross Value Added Per Person Employed (2004 euros) 300. A refined statistical analysis.September 2007 Figure 24 Comparison of Apparent Labour Productivity (GVA per person employed) for the U.S.. these findings can also only explain a part of total productivity growth. as performed in the EU KLEMS study. Trade and Industry (METI) Although all these data stem from official statistics. industry so dramatically outperforms the producers of cosmetics products in terms of efficiency. and to significant differences in the productivity growth of market services and differences in the growth of multi-factor productivity over the period since 1996. the above-mentioned basic difficulties do not allow one to draw the easy conclusion that the U.Final Report . Japanese Ministry of Economy. Census Bureau: Statistics for Industry Groups and Industries.000 U. U. Japan*. However. Most of these studies have found that since 1996 productivity growth in the U.

Japan In the EU value added as a percent of total production is comparable to the overall manufacturing sector.Value Added as a Share of Total Production Value 70 60 50 Percentage 40 30 20 10 0 EU 25 Be lgi um De nm ark Ge rm an y Es to nia Sp ain Fr an ce Ita ly Cy pr us Lit hu an ia Hu ng Ne ary the rla nd s Au str ia Po lan d Ro ma nia Slo va ki a Fin l an d Sw Un ed ite en dK ing do m No rw Un ay ite dS tat es Ja pa n Cosmetics Manufacturing Total Manufacturing Source: Eurostat. and Industry . 67 . Ministry of Economy. Trade. U. The U. Japan's cosmetics value added as a percent of total production value is almost twice as large as the total industry average.S. and Japan seem to have very productive cosmetics sectors compared to their manufacturing sectors.September 2007 Figure 25 .Final Report .S. Census Bureau.

Final Report . While slightly less pronounced.S.Measuring Productivity in the Cosmetics Industry Across Countries: Is the difference really that big? When comparing productivity. with productivity values starting from 30. based on differences of hours worked in the national manufacturing industries also reduces the productivity gap slightly.and medium-sized enterprises (SMEs)1.000 Euro per employee for small companies and 357.551 Euro per person for small companies and stretching to 89.253 Euro per person for companies with more than 500 employees. The higher the index.000 Euro per employee for companies up to 500 employees in the cosmetics market. While exact numbers on the hours worked are not generally available for the market under consideration. These observations corroborate the conclusion that the cosmetics industries in the U. and Japan deploy more capital in the production process than the European industry1. averages 8. For Japan. For the specific segments of hair care products. the difference is significantly reduced when applying Purchasing Power Parities (PPP) to the comparison. Labour productivity is closely related to capital intensity. markets are dominated by large companies.S.September 2007 Box 6 . 68 . data on the 4-digit NACE code had to be calculated by combining information on gross value added and employment of the cosmetics sector with slightly more aggregated information on the distribution of company sizes on the 3-digit level.04%). the correlation is also striking. while the Japanese and U. Generally.S. *The Hirschmann-Herfindahl index is calculated as the sum of the squared market shares of all companies in a certain industry. The obvious assumption that bigger companies are producing with a higher capital intensity and thus show a higher labour productivity is substantiated by the strong correlation observable between GVA (Gross Value Added) per person and company size as measured in employees. The European market is characterised by an extremely high number of small. an estimate of the productivity per working hour. The remaining gap can partly be explained by the differences in the national production structures.S. the cosmetics industry in all regions cannot be characterized as highly concentrated (the Hirshmann-Herfindahl* index for the cosmetics sector in the U. several important points need to be addressed and discussed: • First. • • • For Europe. the fragmentation of production is far more pronounced in Europe than in both Japan and the U. the difference is even bigger. an index below 10% is regarded as low and the market is considered to be competitive. While in general. the more activity is concentrated within a small number of firms. the productivity ranges between 60.

202 52. Italy is unique among the large market countries in that 99 percent of companies in Italy have fewer than 250 employees.777 28.Final Report . Spain. Italy had over 1000 firms with fewer than 10 employees. Census Bureau although the definition seems to be the same.620 France.K. In the U. Bulgaria. For the other countries not found in the OECD's Structural Statistics for Industry and Services database. Italy. Luxembourg. Germany.004 83.123 52.S. The industry in those countries is more consolidated with larger firms more prevalent.941 44. was obtained from the OECD's Structural Statistics for Industry and Services database. Poland 67.289 30. The market is however best characterized as several hundred small.289 47. data was obtained by searching a company database called Kompass.538 29.S.948 25.128 11.504 49.K.062 43. and the U.mainly in France and Germany.504 45.116 44. Data on SMEs for most European countries as well as the U. It is important to note that the total number of enterprises in this database is different from the ones presented from Eurostat.924 57. Relative to production value in Italy. Italy.852 21. Luxembourg **Without Malta. Germany.548 40. It is not surprising that the smaller market countries are dominated by SMEs. Spain 65. and in Japan firms tend to be more vertically integrated.681 57. The numbers obtained this way seem very low which may be due to lack of records on companies in certain countries such as China. 2004 Productivity (Euros per person) by Company Size (Number of Employees) total 1 to 9 10 to 19 20 to 49 50 t0 249 >=250 71. Czech Republic ***Without Greece.. Malta.076 14.832 17. In fact. Global Insight calculations for company breakdown EU-27*** EU-15* EU-12** France. Bulgaria.178 Number of Small and Medium-Sized Enterprises There are a significant number of major international cosmetics firms in Europe . Czech Republic Source: Eurostat data.604 *Without Greece.S.613 27. U.216 86. thus a meaningful analysis of this data set can not be done.139 81.550 46.657 70. 69 .011 47. This is also the case in the U. the large number of SMEs renders their cosmetics industry considerably more fragmented than in France.K. there were 855 firms with fewer than 10 employees in France in 2004.September 2007 Table 78 Apparent Labour Productivity (GVA per person employed) in the European C&T Industry (NACE 24. U.961 84.. It is not uncommon for these firms to have fewer than 10 employees.25) by Company Size.and medium-sized companies (SMEs) in most countries.

September 2007 Table 79 1-9 10-19 75 12 129 11 164 16 55 13 65 3 855 104 317 104 123 22 12 1 1146 206 75 15 14 3 655 43 143 22 19 4 803 131 170 12 188 21 446 59 1-9 10-19 1188 283 20-49 50-249 12 9 15 11 13 25 12 10 5 1 126 116 87 106 8 9 6 8 107 68 20 20 0 2 39 58 0 12 0 0 155 58 8 11 27 18 65 75 20-99 100-449 398 133 SMEs as a % of Total 1 99% 7 96% 2 99% 1 99% 0 100% 46 96% 37 94% 3 98% 3 90% 17 99% 5 96% 1 95% 17 98% 0 91% 0 77% 18 98% 0 100% 3 99% 33 95% SMEs as a % 250+ Total SMEs of Total 111 2002 95% 250+ Total SMEs 108 166 218 90 74 1201 614 162 27 1527 130 19 795 177 23 1147 201 254 645 Austria Belgium Czech Republic Denmark Finland France Germany Hungary Ireland Italy Netherlands Norway Poland Portugal Slovakia Spain Sweden Switzerland United Kingdom United States Source: OECD Table 80 1-10 Bulgaria Greece Latvia Lithuania Luxembourg Malta Romania Slovenia China Japan 7 6 12 4 1 1 49 10 0 1-9 79 11-20 5 17 5 4 1 2 15 1 3 10-19 81 21-50 4 21 4 3 2 0 27 3 16 20-49 124 51-100 101-250 Total SMEs 3 3 22 9 11 64 1 1 23 2 0 13 1 0 5 2 0 5 15 10 116 1 1 16 11 16 46 50-99 10-299 Total SMEs 55 59 398 Source: Kompass. Trade and Industry 70 .Final Report . Japan Ministry of Economy.

1% 7.313 4. big cosmetic corporations combine to control over half of the cosmetics market.5% C&T sales are taken from annual reports for L'Oréal Group. The most significant development in 2006 was Kao Corporation's move to become tenth largest firm in the global cosmetics and toiletries industry.September 2007 II.110 We expect that the trend towards consolidation with major companies buying up smaller niche brands will likely continue as large organizations seek to gain access to new local markets and new niche product lines.314 3. C&T sales are not available as a line item in annual reports for Proctor & Gamble.Key Global Cosmetics Industry Players Currently. Shiseido and Kao however fiscal years for reporting differ.9% 3.1% 2. The top 10 companies generally posted positive growth trends in 2006. Kao is the second Japanese company to enter into this group of industry leaders. "Kanebo Purchase Makes Kao a Force in Cosmetics". Avon. Table 81 – Market Share for Top 10 Global Cosmetics Companies 2006 Company Procter & Gamble Co* L'Oréal Group Unilever Group* Colgate-Palmolive Co* Estée Lauder Cos Inc Avon Products Inc Beiersdorf AG Johnson & Johnson Inc* Shiseido Co Ltd Kao Corp Source: market share data comes from Euromonitor111 2006 C&T Sales (€ millions) 18. was worth ¥279 billion (€1. Nature of Competition II.1 . 71 .Final Report . In this section we provide some details of the product segmentation and markets served for several of the largest cosmetic companies as provided in their annual reports. International Herald Tribune.8% 2. Sales figures for 2006 are expressed in € millions and cosmetic product sales as a percent of total sales. December 18. Beiersdorf.048 4. Estée Lauder.235 Share 12. Several of the top ten companies did not provide segment data on their cosmetic operations or included them within other product categories.com.360 15.783 5.3% 3. these companies are not detailed below.011 10.7% 10. ColgatePalmolive and Johnson & Johnson. March 29.6% 2. 2005.0% 3. along with growth compared to the previous year. The table below lists each of the top 10 companies in 2006 and their respective shares of the global cosmetics market (retail sales value).801 4. 2007.109 This acquisition completed in early 2006.264 5. Unilever. Value of cosmetics sales for these companies were calculated by Global Insight based on Euromonitor's market share data and the average implied global market of the companies that report annual C&T sales. after acquiring Kanebo Cosmetics.327 4. Cosmeticsdesign-europe. 109 110 "Japanese Cosmetics Players Creep Up on Global Rivals".1% 4.8 billion) and allowed them to enter into the specialty and prestige cosmetics market.

0% 11.Dec 31. Source: L'Oréal 2006 Annual Report. headquartered in the U. As consumers continue to demand luxury products that are more affordable. headquartered in France. which will be described in greater detail in the Case Study section of this report. the company has strengthened its 112 L'Oréal 2006 Annual Report. 72 . market after only four years from launch.2% 100.September 2007 L'Oréal.8% 3.L'Oréal Group 2006 Sales % of Total Growth from (€ millions) Sales previous year Product Portfolio Cosmetics Skin Care Hair Care Makeup Hair Colourants Perfumes Other Western Europe North America Asia Latin America Eastern Europe Other All Cosmetic Products The Body Shop /1/ Dermatology Grand Total 3..1% 6. These gains were particularly strong in Western Europe.0% 19. is the second largest global cosmetics firm and experienced significant growth in nearly all market categories in 2006. with total sales of over €5 billion.6% 3.123 2.6% n/a 8. In 2006. L'Oréal's products top the market in several Eastern European countries.790 24. allowing for positive growth in that region's sales for the first time in several years.432 1.8% 2.0% 9.6% 24.992 3.1% 2.476 1. The sale of skin care products comprised the largest percentage of total sales and also showed the most year-over-year growth.4% 10.9% -4.8% 15.5% 5.0% 2.S.2% 7.954 1.S.5% 3.112 Table 82 – L'Oréal Group Key Industry Players .4% 18.8% 4. Fragrances also gained market share in North America. Leading the way were market share gains in hair and skin care products. 2006).633 3.6% *Includes data since acquisition (July 1 .5% 95.4% 4.850 3.5% 44. L'Oréal's European sales garnered 12 percent of the entire EU-27 cosmetic market.1% 8.4% 23. Sales in Latin America and Eastern Europe also grew substantially. The Garnier skin and hair care product line rose to second place in the U.Final Report .7% 2. saw its growth mainly in the hair care and makeup market segments. The acquisition of The Body Shop.021 850 718 15. following industry trend.5% 5. has allowed L'Oréal to gain a foothold in the growing natural cosmetics market and forced the company to work at fully transitioning away from testing products on animals.3% 6.3% 25. Estée Lauder.7% 3.011 435 344 15.572 402 6.

765 715 5. Business could also be restricted as a result of government regulation in specific expanding markets which could limit profits.9% * Sales values were converted from $ to € using an average exchange rate for the 12 months prior to the end of the fiscal year. The company has several different.4% -3.Estée Lauder Companies Key Industry Players . market.S.and fragrance free. 73 .313 37.3% 33.7% 0. is one of the world's leading direct selling companies with innovative marketing techniques based on one-on-one representative to customer contact.Estée Lauder Cos Inc 2006 Sales % of Total Product Portfolio (€ millions) Sales Cosmetics Skin Care Hair Care Fragrance Makeup Other The Americas Europe. with emphasis on allergy.1% 4.8% 5. Avon. which have helped propel makeup sales. Estée Lauder is concentrating on meeting the needs of the global consumer and expanding their product lines into these new markets over the last several years. though they expect international business to drive future growth.0% 2.8% 0.1% 16.1% 2.S.5% 100. customizable colour.0% Growth from previous year 2.9% Grand Total 5. Source: Estée Lauder 2006 Annual Report. Overall sales growth has not been as strong as that of some of its key competitors. With over half of its business in the U.113 Table 83 .2% 13.313 100.4% 53. The company prides itself on being a leader in the prestige cosmetics market and strives to bring luxurious and innovative products to its customers.973 262 997 2. Because they rely so heavily on direct selling.058 22 2.8% 2. highly successful lines of unique makeup products. 113 Estée Lauder 2006 Annual Report.833 1.9% 18. headquartered in the United States. & Africa Asia/Pacific All Cosmetic Products 1. and implementing changes in the organizational structure to enhance global reach. Avon is in the midst of a multiyear turnaround plan during which the company aims to restore brand competitiveness through major advertising campaigns. The development of new products which target the specific hair care needs of different demographic and ethic groups has helped propel Estée Lauder's sales in this product area. Middle East. revamping the corporate relationship with sales representatives. the company depends on maintaining the advantage over their competitors in this type of cosmetics sales.Final Report .8% 1.September 2007 partnerships with salons to provide technical education to stylists as well as developing products which meet changing consumer needs.8% 38. and aromatherapy products. Currently. The company holds three of the top five prestige beauty product brands in the U.8% 6.

and faster consumer business strategy by touting their superiority in brands. watches. headquarter in Germany. and organizational talent matched with a clear geographical focus. skin care. Avon experienced strong growth in their beauty division which includes cosmetics.5 percent by 2010 thereby strengthening their position as a global competitor.801 1.9% 7. The sales in this division grew the strongest in the Africa/Asia/Australia region. fragrances.6% *Sales values were converted from $ to € using an average exchange rate for the 12 months prior to the end of the fiscal year.801 4.5% 69.September 2007 After completing its first year of restructuring in 2006. bigger.Avon Products Inc Product Portfolio Cosmetics Beauty* All Cosmetic Products Beauty Plus** Beyond Beauty*** 2006 Sales (€ millions) 4.115 114 115 Avon 2006 Annual Report. ***Product line consists of fashion jewellery.8% 2. better. fragrances & toiletries.3% 11. and new alliances with fashion designers and make-up artists. accounted for one-quarter of the company's revenue in 2006 with Brazil as the next largest market contributing about 12 percent.5% 19. Source: Avon 2006 Annual Report. *Product line consists of home products. innovative packing schemes. The company's goals centre around their consumer focused strategy and new product concentration in the growing markets of China.2% Growth from previous year 7. Sales to the Americas also grew faster than the overall company as a whole.Avon Key Industry Players . skin care.4% Grand Total 6. The company hopes to achieve this goal through a more focused. Avon's cosmetics colour line remains weak but the company plans to re-launch these products with broader shade palettes. Beiersdorf garnered nearly 5 percent of the region's market share with some products experiencing at or near double digit growth rates with particularly strong gains in Eastern Europe. Russia. The company aims to increase worldwide market share to 5. Within Europe. Sales in the U. Beiersdorf's.Final Report .0% 7.911 100. apparel & accessories.114 Table 84 . and toiletries. Heavy advertising campaigns in hair care lines and anti-aging products have led the way in the consumer division's recent success. consumer segment produces skin and beauty care products sold as popular brands like Nivea and Eucerin.335 774 % of Total Sales 69.9% 9. *Product line consists of cosmetics.S. 74 . and India. supply chains. gift & decorative products. Brazil. Beiersdorf 2006 Annual Report. Growth was particularly strong in China (46 percent) and Thailand (17 percent).

headquartered in Japan.5% Growth from previous year 7.116 116 Shiseido 2006 Annual Report. fundamental restructuring largely through cost structure reforms.0% 7.327 3. the company had solid growth in its cosmetics line as well as good regional growth in Asia/Oceania though its sales there represent only a small share of the overall total. Regional growth was also strong in the Americas and Europe though Japan. The goals of the restructuring plan include reforming domestic marketing activities.5% 14. Shiseido remains a small player in Europe. merging existing product lines to make them stronger. has instituted a multi-year plan intended to restructure the company by eliminating underperforming brands and reducing fixed costs.7% 84.0% 7. Shiseido.5% 15.2% 12. by far. and aggressive expansion into other growth markets. holding only 1 percent of the region's market share in cosmetics. Several brands will also be combined into "mega lines" which focuses on reorganizing.0% 7. The company is concentrating on China as one of the largest sources of new business and is also creating new marketing plans tailored to Japanese and other growth market customers. and aggressively marketing them in order to acquire top market share.Beiersdorf AG Product Portfolio Cosmetics Consumer Division Europe Americas Africa/Asia/Australia All Cosmetic Products Tesa* 2006 Sales (€ millions) 4.5% 61. In 2006.327 793 % of Total Sales 84. 75 .3% *The Tesa business segment develops state-of-the-art self-adhesive system and product solutions for industrial customers and consumers. remains the company's largest market.September 2007 Table 85 – Beiersdorf AG Key Industry Players .Final Report .2% 6.2% 8.120 100. accelerating expansion of the China business. Source: Beiersdorf 2006 Annual Report.2% Grand Total 5.6% 10.134 647 546 4.

8% 9. gaining footholds in new markets.6% 1. Christian Dior 2006 Annual Report. trying to gain their own place in the market.117 Largely due to its successful cosmetic and perfume lines. In the last fiscal year. 76 . health and beauty foods.9% /1/ Includes beauty salon products. The most successful companies detailed below look to provide stiff competition. Implications for Corporate Strategy Holding a position as one of the top 10 manufacturers is enviable however these companies understand that they must constantly reconsider and re-evaluate their market positions by listening to the demands of their customers.5% 11. The company also anticipates their global market share to increase in the cosmetics/toiletries sector. and have largely been successful in developing their own name. Christian Dior experienced significant growth in 2006 with each product in this line contributing to the positive sales performance.314 3.8% 7. and evaluating their organizational structures.9% Grand Total 4.9% 12. These large multinational firms are finding themselves facing stiff competition from other popular brands. fashion goods. They expect growth in fiscal 117 118 Henkel 2006 Annual Report.September 2007 Table 86 – Shiseido Co.Final Report .6% 70.1% 88.1% 5. Flagship products as well as new innovations continue to gain market share.8% 6.9% 6. Note: Sales values were converted from ¥ to € using an average exchange rate for the 12 months prior to the end of the fiscal year. Henkel was largely successful at gaining market share in 2006 due to the gains made in its hair and body care segments.453 334 621 463 557 79.871 100. and fine chemicals. As illustrated in the table below. other cosmetics companies are pushing ahead. Key Industry Players . Source: Shiseido 2006 Annual Report.3% 27.0% 4.6% 2. pharmaceuticals. several of these companies saw similar or greater rates of growth in their product lines compared to those in the top 10.870 444 4.118 Kose's primary objectives are to expand their market share in Japan and move faster to increase the company's reach into other expanding markets.1% 1.Shiseido Co Ltd 2006 Sales % of Total Growth from Product Portfolio (€ millions) Sales previous year Cosmetics Cosmetics Toiletries All Cosmetic Products Japan Americas Europe Asia/Oceania Other /1/ 3.4% 9.4% 5.

106 1. Source: Company 2006 Annual Reports. Taiwan. Recent acquisitions are aimed at allowing the company to increase its market share in the specific cosmetic segments and through improved distribution channels.864 12.4% 10. consumer and craftsman adhesives. wines and spirits.9% 6. 77 .September 2007 2007 to come primarily from the markets of Japan. **Includes perfumes and cosmetics. The company identifies its brand marketing strategy as its greatest strength. and Henkel technologies. Over the next few years.0% 63. and personal care.0% 96. Alberto Culver experienced 14 successive years of record sales. skin care. and selective retailing. These challenges led several of the industry's key players to make acquisitions in the most recent fiscal year which are detailed in the table below. The goals of these acquisitions were to introduce new business lines. Christian Dior couture.0% 15. Outside of the Top 10 Key Industry Players . *****Includes Sally Beauty Supply and Beauty Systems Group.8% 100.267 1. China.5% 8.6% 100.6% 4.773 2.9% 100.519 16.2% 10.Outside of Top 10 Company Information HENKEL Cosmetics/Toiletries All Products* CHRISTIAN DIOR Perfumes and Cosmetics All Products** KOSE Cosmetics/Cosmetaries All Products*** REVLON Cosmetics**** ALBERTO CULVER Beauty Supply Distribution****** All Products****** 2006 Sales (€ million) 2.1% 7. Annual report for Alberto Culver was last available in 2005.0% Growth from previous year 8. streamline production.Final Report .5% 100.060 1. fashion and leather goods.4% *Includes cosmetics. and expand the types of products under company control. ******Includes global consumer products and eliminations. watches and jewellery.5% -0. laundry and home care.307 1. corporate.740 2.120 Table 87 – Key Industry Players. fragrances. and South Korea. the success of these acquisitions will have to be evaluated as the relentless demand for the consumer's loyalty will surely continue.0% 100. Alberto Culver 2005 Annual Report.119 Through 2005. ****Includes cosmetics. 119 120 Kosé 2006 Annual Report. *** Includes a small "Other" category.777 % of Total Sales 22.9% 4.

new fragrance line Distributors of Aveda products .acquired. 78 .acquired. country market leader in hair products Alberto Culver: CosmoProf .acquired.acquired.acquired.acquired.acquired.acquired. Soft Dri.September 2007 Table 88 – Key Acquisitions Company Key Acquisitions in the Most Recent Fiscal Year: L'Oréal Group: Diesel .Final Report . businesses engaged in distribution of this product line Avon Products Co: Avon Columbia . Dry Idea . business of company from licensee Henkel: Right Guard.license agreement. hair care products company Source: Company Annual Reports. new fragrance line Laboratoires Sanoflore . deodorant brands Jasminal of Tunisia .acquired. natural cosmetics line SkinEthic . organic cosmetics line The Body Shop .license agreement. tissue engineering products company Estée Lauder Cos Inc: Daisy Fuentes . professional beauty products distributor Nexxus Products .

these distinguishing characteristics will be duplicated by competing firms and economic profits will be reduced or eliminated. A firm in this type of market structure is assumed to exploit the uniqueness of its brand or evolving consumer trends to reap economic profits.Barriers to Entry The cosmetics industry exists in a market structure that is a cross between the extremes of perfect competition and monopoly – that is. quality and safety standards. import and export licenses.exclusive agreements with key distributors or retailers Investment costs –setting up manufacturing. inexperienced firms. Over the long run. In general monopolistic competition is characterized by relatively low barriers to entry and exit.the presence of established powerful brands with large budgets to spend on advertising Distributor agreements . The industry is characterized by a large number of firms that attempt to differentiate their products and maintain a certain degree of control over their pricing. 79 . Each member state designates a competent authority that enforces the legislation. etc. Denmark and Spain request a notification of products prior to marketing. monopolistic competition. In general barriers to entry are low under monopolistic competition but to the extent that they exist in specific industries they may include any or all of the following: ♦ ♦ ♦ Government regulations – licenses. etc Advertising . The relevant member state authority must be notified of the place of manufacture or of initial importation. Market structure and penetration – imports relative to domestic products consumption. but advances in technology can reverse cost advantages Sunk costs – costs that cannot be recovered if a firm decides to leave a market Supplier agreements. distribution or research facilities Economies of scale – large established companies can generally produce goods at lower costs than small. exclusive agreements with key links in the supply chain ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ Government Regulations The European Commission through the EU Cosmetics Directive has overall responsibility for cosmetic legislation with the EU. The following section lists relevant issue to be considered: ♦ There are no requirements for registration of manufacturers or importers or premarket approval.2 . Belgium. per capita spending.September 2007 II. etc.give a firm the sole legal right to make a product for a given period of time Trade barriers – import duties or quotas.Final Report . Research and development – cost of developing new products and processes Patents .

The 7th Amendment to the Cosmetics Directive introduced a ban on animal testing of cosmetic products from September 2004 in the EU. in which case they must meet the requirements of both. is effective not later than March 2009. Warning statements are required in the respective national languages for products containing certain ingredients. preservatives and UV filters. Labelling requirements are low – they must carry an ingredient declaration on the outer package and the country of origin. They are subject to an active ingredients list. The safety of cosmetic products placed on the EU market is the responsibility of the person who places the product on the market. The deregulation process involved the abolition of pre-market 121 http://eur-lex. assured through in-market surveillance by competent authorities designated by each member state. Products categorized as over-the-counter (OTC) drugs and their respective manufacturing facilities must be registered within five days from beginning their operations.S. Characteristics of the U. No approval is required for the use of any new ingredient in a cosmetic. Positive lists permit the use of a number of cosmetic colourants. Other product categories are medicinal and biocidal products regulated under separate directives. All colour additives must be tested for safety and approved for their intended use by the FDA before they can be marketed. within the EU or elsewhere. ♦ ♦ ♦ The accessibility to the Japanese cosmetic market has greatly improved since the implementation of the new cosmetics law in 2001 which reduced red tape and decreased administrative costs.europa.September 2007 ♦ There are 1233121 prohibited substances and another 97 subject to restrictions in the use of cosmetics manufacturing. General labelling requirements exist.pdf 80 . including the address where product safety information is kept within the EU. New ingredients must undergo approval process – and more rigorous labelling requirements. and remains largely unchanged since its introduction in 1938. A ban on animal testing of ingredients within the EU and on the marketing of cosmetic products tested on animals and products containing ingredients tested on animals. Inclusion of new substances in the list is subject to scientific evaluation.eu/LexUriServ/site/en/consleg/1976/L/01976L0768-20060809-en. ♦ ♦ ♦ ♦ ♦ The Food. Cosmetics can be categorized as cosmetics.Final Report . but a small number of ingredients are strictly regulated or prohibited. market include: ♦ Cosmetic products are not subject to pre-market approval and companies are not required to submit information on their products or to register cosmetic manufacturing establishments.S. drugs or both. Products can only fall under one of the three categories. The safety of cosmetic products is the responsibility of the manufacturer and is supported by an in-market surveillance system. Drugs and Cosmetics Act regulates cosmetics in the U.

August 2004 123 For details on Chinese regulations.g. and may be subject to considerable change in the near future.123 Lists of ingredients not allowed in cosmetic products include colourants.September 2007 approval. Responsibility for cosmetic safety rests primarily with the manufacturer. content volume. There are differences in requirements between imported and domestically-produced cosmetics. The health authorities may require a manufacturer to substantiate product safety. as well as new approved uses of ingredients. Product registration requirements differ between ordinary and special use cosmetics (e.g. The overall approach is not aligned with that of the EU or any other main regulatory models. the establishment of a prohibited ingredient list similar to the EU and the abolition of the designated ingredient list and a new requirement for complete ingredient listings to provide better consumer information. Manufacturers must be registered and all manufacturing sites must have a Hygiene Licence as well as a Production Licence. are required to undergo a safety evaluation based on specified procedures and methods. Cosmetics must be labelled with the product name. Burdensome BSE-certification was introduced in 2002 affecting companies from 18 European countries. sunscreens. cosmetics can potentially be classified as quasi-drugs (e. deodorants.122 Despite the 2001 simplification of the regulatory framework. product number or code and a list of ingredients.Final Report . Foreign data is not accepted and all cosmetic products must undergo testing within China. Full ingredient listing on labels is not required. This category generally requires pre-market approval and is subject to limitations on composition and manufacturing processes. Burdensome regulations increase the cost of business and take time. see "Comparative Study on Cosmetics Legislation in the EU and Other Principal Markets with Special Attention to so-called Borderline Products". Manufacturers or importers are required to check the safety of their products thoroughly before they are placed on the market and to maintain records of this. weight loss products. mouth wash) or drugs. hair removal products) and between domestic and imported cosmetics. DG Enterprise by Risk & Policy Analysts Limited. involving two separate government bodies. DG Enterprise by Risk & Policy Analysts Limited. prepared for the European Commission. ♦ ♦ ♦ ♦ ♦ 122 Comparative Study on Cosmetics Legislation in the EU and Other Principal Markets with Special Attention to socalled Borderline Products. making it more difficult for companies to export to Japan. and all information must be in Chinese. Some key points to consider: ♦ ♦ Cosmetics legislation in China is currently under review. prepared for the European Commission. All new ingredients. Regulation of cosmetics in China is complex. August 2004 81 . UV filters and hair dyes. name and address of manufacturer or importer. Labelling is subject to positive and negative regulations.

ustr. Government and the European Commission to develop harmonized. Once alternative to animal testing become available there will be difficulties in making them acceptable in other countries where animal testing is seen as the most reliable means of evaluating the safety of cosmetics – for instance China still requires all finished products to be tested on animals – and which currently have no intentions of changing their regulations. the cosmetics industry could be significantly impacted by the EC's regulation on the Registration. The 7th Amendment to the Cosmetics Directive introduced a ban on animal testing of cosmetic products from 11 September 2004 and a ban on animal testing of ingredients not later than 11 March 2009 within the EU. and the emergence of two parallel markets for cosmetic products.gov/assets/Document_Library/Reports_Publications/2006/2006_NTE_Report/asset_upload_file814_9 243. This could lead to major trade disruptions between the EU and other countries. with innovation in one market not transferable to the other. non-animal testing methods. It is feared that a barrier to entry will be created as only large companies will have the resources to develop new testing methods and they will be reluctant to make them publicly available for fear of sacrificing commercial advantages. Although some funding may be available for this purpose. alternative.September 2007 Impact of EU Regulation on Trade Animal Testing According to industry sources. thus creating a barrier for non-EU companies with largest share of sales outside of the EU. taking on average seven years. The purpose of the project is to develop agreed alternative testing methods that would be submitted to the OECD process for international validation. the greatest cost to the industry will be the development of alternatives to animal testing in order to comply with EU regulation. Evaluation. A new initiative aimed at minimizing these disruptions is a joint project by the U. This new directive may also discourage innovation by prohibiting the use of new ingredients for lack of proper safety testing. All companies manufacturing or importing to the EU are affected. The timetable for the development of new alternatives is very strict and does not allow for an extension of the use of animal testing if alternative tests are not available in time. the responsibility lies with the industry. DG Enterprise by Risk & Policy Analysts Limited. prepared for the European Commission.pdf 125 Comparative Study on Cosmetics Legislation in the EU and Other Principal Markets with Special Attention to socalled Borderline Products. Authorisation and Restriction of CHemicals (REACH) through: 124 http://www. which is different with regulation in the rest of the world. August 2004 82 .S.124 REACH125 As a user of substances produced by the chemical industry.Final Report . The validation of alternative methods is a long and expensive process.

For instance. R&D expenditures are required with the introduction of new formulae because "natural" products can pose health risks. loss of availability of chemical products as manufacturers rationalise their product range and fail to support certain substances through REACH.Final Report . are generally more confident in "the progress and benefits of science and technology than their children" and favour "high-tech innovative active components". Brands perceived as indifferent to safety issues will lose customers' confidence. and impacts arising from the public availability of information potential incompatibility due to REACH requirement of testing certain substances on animals and the prohibition of the Cosmetics Directive to do so.S. ♦ ♦ ♦ Research and Development The cosmetics industry is very dynamic and is characterized by innovation and a high rate of product development. and to keep up with constantly evolving consumer preferences. Men's growing acceptance of the importance of being well groomed led to very strong performance in this segment. In China there have been a number of product withdrawals due to safety concerns in spite of the country's stringent regulations. There is a high rate of product launches and continuous need for innovative cosmetics catering specifically to men. This reflects the increased preference of consumers for less synthetic and more "natural" or "botanical" products. ♦ 83 . Asian women consider their skin to be different from Europeans' and will thus rather buy products catered to them. Natural cosmetics are another fast growing category. Companies like L'Oréal are opening research labs in China as they are trying to grow in that market. Innovation is essential to maintain global competitiveness. safety and the environmental impact of products. Customers are becoming increasingly aware of the risks posed by different ingredients used in cosmetic products. improve performance.S. This is particularly the case in the U. which is expected to continue going forward. ♦ ♦ ♦ Technological advances have allowed for the creation of multi-functional products. Beauty-on-line says that baby boomers in the U. Some current market trends that drive R&D are: ♦ Anti-aging skin care is a growing market segment with the aging of the baby-boomer generation. where the cosmetic industry operates with little oversight by the Food and Drug Administration.September 2007 ♦ increased prices for chemical inputs as manufacturers seek to recover the costs of REACH. They have become popular because they place strong emphasis on value for money. Research and development also needs to be conducted when a company enters a new market as people's dermatological characteristics vary. Consumers want to see immediate results and are not brand loyal.

Counterfeits however continue to be a threat in that country. tariffs range from 0 to 5.4 percent depending on the product. valuation. Germany. A few categories (like shaving categories and deodorants) are subject to a general duty rate of up to 6 percent when imported from countries with which the U. does not have a free trade agreement in place. In particular.gov/assets/Document_Library/Reports_Publications/2006/2006_NTE_Report/asset_upload_file814_9 243. During the last five years a large number of patents have been filed in China. EU rules on classification. origin. mostly by international players. 126 For details on customs law in the EU see Office of the united states Trade Representative http://www.ustr. VAT levels also vary.pdf 127 Tariff rates for specific products are available at Asia Pacific Tariff Data Base http://www.126 United States Most cosmetic products are duty exempt in the U. unless otherwise stipulated in a bilateral trade-agreement.S. Both R&D and Patents will be treated more extensively in the following chapters. Trade Barriers European Union The EU does not operate as a single customs administration: there is a separate agency responsible for the administration of EU customs law in each of the Member States and EU customs law is not administered in a uniform manner.515 percent by 2008.org/ 84 . All imported cosmetics are submitted to stringent controls at customs. Japan and the United States. France. They provide a firm the sole legal right to make a (new) product for a given period of time .Final Report .127 China Cosmetic products are subject to tariff rates of 10 to 16 percent according to China's 2005 tariff schedule.abnormal profits may result during that period. China has seen a surge in patents filed locally. China's WTO commitments require that import tariff of cosmetics and toiletries will be reduced to 6. Japan In Japan.apectariff. and customs procedures can be applied differently in the Member States.S.September 2007 Patents Patents do not necessarily create a barrier to entry.

Final Report . exports at 26.000 Europeans. United States The U.3%. Switzerland (2.2%. 7. China 7. According to the European trade association. mostly small and medium-sized enterprises. It is also the second largest manufacturer.5%. Japan Third largest cosmetics market after the EU and the U. ahead of the 13. followed by the U. In 2005. The EU is a net exporter of cosmetics.. COLIPA.S. with a total production value of €28. and Mexico 6. Japanese companies hold almost 70 percent of their home market and the leading five manufacturers . and have grown faster than exports in recent years.9 billion in 2005.2 billion in 2006.S. (11%) is the largest non-EU trading partner. Germany. is the second largest consumer of cosmetics products after the EU. The U. considered mature. Kao.7 billion in 2005. The five largest national markets. Intra-EU trading was €21. Japan 8. followed by Italy 8.. The U. but quality of domestic cosmetics is highly competitive with that of foreign products 85 .S.K.K. Domestic production costs are relatively high. while imports were €24. which create employment — directly and indirectly — for more than 350.K. Kanebo Cosmetics. with the second largest per capita spending after Norway.5%).0%). there are 757 cosmetics companies in the U.000 manufacturers.2%. According to the Annual Survey of Manufacturers published by the U.September 2007 Market Structure and Penetration European Union The EU is the largest cosmetics market in the world.9 billion. France.1 percent import growth.3%.S.5 billion worth of products at retail sales prices in 2006.S. Kose and Pola .Shiseido. Meanwhile France and Canada are the top two sources of cosmetics sources at 27% and 19% respectively.8%) and Japan (2. employing over 53 thousand workers. Canada is by far the biggest destination for U. Of this the new EU12 make up €5. the U.3 percent compounded annual growth. The EU27 + Norway and Switzerland consumed approximately €63. Imports make up around 9 percent of the market. Over the 2000-2005 period exports grew by 14.9%.S.account for almost 49 percent of total value sales. and the U. further eroding domestic manufacturers' market share.S. with the top 10 destination countries making up only 61 percent of the total. 9. Census Bureau. EU exports are spread out across the globe. the European cosmetics industry consists of around 4. is a net exporter of cosmetics. Italy and Spain account for 76 percent of consumption.3 billion. having a total market size of €38.8%. followed by Russia (3. exports outside the EU reached €37 billion.

86 .September 2007 The accessibility to the Japanese cosmetic market has greatly improved since the implementation of the new cosmetics law in 2001. the cosmetics market in Japan was difficult for foreign firms to penetrate. according to the Cosmetic Importers Association of Japan. Skin care.S. China Euromonitor estimates the compound annual growth rate of the cosmetics and toiletries market in China was 11. benefiting from strong consumer confidence. the U. Barriers to trade from the market's structure appear to be more limited in China as cosmetics imports (especially from France) have been expanding rapidly. which also includes the production by local subsidiaries of foreign multinationals. This market structure should not pose significant barriers to trade and the high penetration rates in both the EU and the U. followed by the U. Customer loyalty is not very high due to the large selection of strong brands and buyers need to be lured with innovative products and advertisements.S. P&G.3 percent in 2004. Estee Lauder. Until the implementation of the new cosmetics law in 2001.9 percent from 2001 to 2006. driven by a rise in personal disposable income as well as "fierce social competition" motivating urban workers to invest in their appearance.5 percent. The cosmetics industry exists in a market structure that is closest to monopolistic competition.S. make-up and skin care products grew more than 240 percent over the 2003-2005 period. For perfumes and toilet waters. Italy. More recently imports share of the market has been trending steadily higher. Since then imports of cosmetics products have been progressing at an average rate of 9.K. France is the top exporter to China in these segments holding 33 percent of the market. Customer Loyalty and Advertising In the cosmetics industry brand recognition is particularly important as a result of the high degree of competition. The market for premium products is growing faster than the overall cosmetics consumption. Foreign brands already hold strong positions in the Chinese market.Final Report . while another 20 percent is almost equally split among China. etc. particularly in the high-end segment (L'Oréal. Chanel. (24%) and Japan (23%) following closely.). Loyalty can be easily lost by releasing products that are seen as detrimental to health. Imports of beauty. and Germany. with the U. are evidence that these markets are open to trade. allowing to reduce red tape and to decrease administrative costs. reached 11. with 10 percent. Clarins. France holds 75 percent of the market. Shiseido. Almost 60 percent of imports originate in France (33%) and the U. to €166 million (USD207 million).S. make-up and hair care products account for 70 percent of these imports. (25%). The share of imports compared to domestic production. These trends are not seen to revert in the near future making the outlook for the cosmetic industry very buoyant. and South Korea (6%) and Italy (4%) the next biggest import sources.

as large companies already have the customer base and the big budgets to spend on promotion.9% 3. Consumers pay great attention when choosing the channels according to the type of product that they are seeking.U. making it important for manufacturers to be able to introduce new products very quickly and attract attention.S. market alone.7% 2. Personal Care Advertising Expenditure by Brand Rank 1 2 3 4 5 6 7 8 9 10 Brands Olay (P&G) L'Oreal (L'Oreal) Crest (P&G) Gillette (P&G) Pantene (P&G) Dove (Unilever) Neutrogena (J&J) Garnier/Fructis (L'Oreal) Aveeno (J&J) Maybelline (L'Oreal) Top 10 Brands Total Personal Care Advertising Expenditure ($ mil. which is usually the main outlet for personal products in Europe. Please refer to the following table for an example of advertising expenditure by brand in the U.S.258 Source: Advertising Age Distribution Channels European Union According to COLIPA. Consumers' needs and tastes are often influenced by seasonal and quickly shifting trends and fashions. such as package design or brand logo.3% 38.Final Report .9% 4. or a marketing characteristic. In order to stay competitive.9% 2.0% 3. Advertising costs can be particularly daunting for small companies. comparisons between countries are difficult. due to differences between distribution channels and lack of data.3% 2. In less mature markets like China brand loyalty is low primarily because of the relatively low experience of consumers with cosmetic products.September 2007 In developed countries. such as natural." The mass market. Unfortunately. a brand or product must be unique – clearly distinguishing itself from others on either functional characteristic. As cosmetics are increasingly associated with personal fashion and consumers are becoming more brand-conscious. "distribution channels play a very important role in the cosmetic market. advertising is a cost that must be assumed in order to sustain or increase sales.3% 2.8% 5. antiaging or whitening effects.5% 4. is progressively earning market shares over the years. 87 .7% $5. the cosmetics market is relatively mature and competition is stronger. 2006 6. Table 89 .) Share of Personal Care Advertising.

which had a transformative effect on the trade. The first category is supplied directly from manufacturers or importers. In France the breakdown is 54%. The variety of products offered through this channel is expanding past daily necessities. Traditional distributors are usually logistical service providers only and thus are not responsible for the promotion of the product or the development of new accounts. There have been general changes in all channels as fewer manufacturers and vendors are willing to pay for the cost of distribution. Japan Franchise system (selective/prestige channel) (31%128).Final Report . British Journal of Management. 40%. The general distributorship channel is usually supplied from independent wholesalers. national mass merchandisers. bypassing wholesalers and distributors. 2004. 10% and 7% respectively. 28%. while in Italy it is 41%. 88 . These additional costs are considered a significant obstacle to the entry of new brands in this channel. salons. 13% and 6%. free return of unsold goods. There has also 128 2000 estimation by Shukan Shogyo 129 "Japanese Retailing Through the 1990s: Retailer Performance in a Decade of Slow Growth". Dawson and Lark.September 2007 Distribution channels generally fall under four main categories: mass distribution. The system also included complex rebate systems. online retailers. thus tightly controlling the market. national and local supermarket and drug store chains. Specialty stores account for less than 0. and eliminated some of the inefficient practices that previously made it difficult for foreign retailers to sell to Japanese consumers. specialized distribution. Consumers directly chose products from the shelves and no individualized professional counselling is offered. Public policy in the past was designed to protect smaller retailers while also allowing large retailers to make considerable profits from slow store expansion.129 Japanese retailing is now changing quite rapidly and is more comparable to retail sectors in Europe and North America. general distributorship (36%). decorations and trained beauty consultants. which is typically done by a "manufacturer representative". specialty stores.1 percent of the market. United States Distribution channels fall under one of the following categories: department stores. The Japanese retail sector underwent considerable changes in the recession years of the 1990s. agent or broker. product promotions. but marketing is still supported by the manufacturer. TV shopping networks. direct selling. and long payment terms. Direct sales is the most dynamic distribution channel in many Eastern European countries and it accounts for a larger share of cosmetics sales than in the West. Retailers provide space to selected brands and manufacturers are fully responsible for daily activities: marketing support. door-to-door sales (27%) and direct sales or sales to professionals (6%). pharmacy sales and direct sales. spas.

S. and large number. which have shown their ability to cope in different economies. This category includes marketing online. The latter is the most expensive option considering the high cost of real-estate. rapid retailing development saw modern distribution channels such as supermarkets and hypermarkets. geographical dispersion. 2005 130 89 . China According to Euromonitor International. markets as stores align brand positioning goals of many health and beauty product companies. (Zakreski. Door-to-door sales have declined in value share due to changing social structures – more women stay in the workforce decreasing the number of potential sales personnel and consumers at home ready to answer calls. once created. or warehouse stores. and identify them as more "treatments" than cosmetics. department stores. and foreign makers of luxury cosmetics. drugstores and specialist outlets penetrate deeper into the Chinese market.September 2007 been an increase in the variety of competing retail formats – especially from mediumsized firms which have placed considerable competitive pressure on large and small retailers. International Review of Retail. which is currently done successfully by domestic manufacturers. selling separate brands than what they sell through traditional sales channels. where intense competition often creates the demand for obligatory "The Role of Medium-sized Firms in Retail Change in Japan".130 Guidance for consumer goods companies used to trading with innovative and aggressive retailers in North America and Europe. regional players. The general distributorship is the easiest and most effective way for foreign SMEs to penetrate the market. bringing a wider product variety of products and brands to consumers. Retail pharmacies are becoming the preferred channel to sell personal care products in China not only because of the large number of stores (which has grown to over 200. However. New-comers have three options: department stores. and seeking Japanese partners who are well experienced in the cosmetics market is advised.Final Report . and have more available space (as a percentage of the whole store). Customers' perceptions are that imported health products sold exclusively through retail pharmacies are superior products.000) but also because of the particular dynamics of the channel itself. but offers the best way to control and grow customer base. Establishing distribution relationships with retail pharmacies in China is initially a challenge because of government ownership. perfumery chains or stand-alone stores. Distribution and Consumer Research. The most successful and innovative retailing practices have come from medium-sized and regional firms. Managers are willing to allocate disproportionately to imported products because they sell at much better margins than traditional Chinese products. 2001) The role of retail pharmacy in China is becoming more similar to the EU and the U. maintaining business relationships is easier with retail pharmacies than with the more adversarial supermarkets. Dawson and Lark. and are now seeking to initialize or expand distribution in Japan to align with these medium-sized. Retail pharmacies in China tend to be more flexible and loyal than other outlets.

S. 131 "Reaching China's Middle Class Through Retail Pharmacies". logistics and transport provide additional hassles making direct sales and mail or on-line orders more convenient. Brand-building activities like advertising can also be viewed as a sunk cost.131 New distribution opportunities will be found with foreign retailers. September 2001. the cost of doing business can be significantly increased by regulatory burdens. European Retail Digest.S. market and retail distribution channels have not posed a barrier to entry. Zakreski and He." We conclude that distribution channels are very similar across EU countries and in the U. The greater the sunk investment required for entry. Trade-offs exist between investing in Western countries or in developing countries like China or Eastern Europe. These pressures can still occur even if sales volumes are very high. but the distribution opportunities are probably less with new store growth and more with expanding assortment in existing stores. legal costs. Until recently collusive behaviour in distribution channels in Japan proved to be a very significant barrier for EU firms wishing to penetrate the market. thus protecting incumbents and their profits. The retail format that is becoming the most dominant in China is the hypermarket. In either case. The barriers here are not as formidable as they were for so long in Japan. the riskier entry becomes and the less likely it is that incumbents will be challenged.132 Retail pharmacy store expansion should follow the hypermarkets into new population centres. who are now moving beyond the traditional urban areas. 132 "China's Growing Attractiveness to Global Retailers: Strategies for retail expansion in China". where competition is less intense. In the cosmetics industry sunk investments could include specific purpose production facilities with little value in alternative uses.September 2007 discounts and other trading pressures from store management.Final Report . Direct sellers have had to open stand-alone retail outlets for their brands. The China Business Review. following a lift of geographical restrictions as stores are being built inland and in secondary and tertiary coastal cities. 90 . Euromonitor International says "Three of the top ten C&T brands in China are direct selling brands. sunk costs will represent investments put at risk by a new entrant where there is uncertainty associated with successful entry into the market. The barriers to entry posed by investment costs will vary by country. Retail pharmacies are the most reliable distribution channel for foreign manufacturers in China's cosmetics market. Ness. EU companies have been very successful at penetrating the U. land and labour costs may be cheaper in the latter. Outside major cities. whose strength is even more impressive when you consider that a ban on direct selling was introduced to China in 1998 as a means to prevent pyramid selling. Investment Costs Investment costs or sunk costs have been shown to create barriers to entry for new firms into profitable industries. While building. which is now displacing department stores.

which can differ from country to country. For example sensitivity to ethnic differences between eastern and western cultures when dealing with business partners is necessary. buyers expect a high level of professionalism in preparation and presentation. Each of these business strategies can reduce the long run average costs of production and create a barrier to entry into the industry. A larger firm can benefit from purchasing materials in bulk quantities through long-term contracts. as a result of the high level of competition in all the markets presented. While it is difficult to establish comparative costs for the countries included in this study. by virtue of its size. Also. Economies of Scale Firm size can be important in the cosmetics industry as a barrier to entry. In China.Final Report . A larger firm can increase its production efficiency by increasing the specialization of its managers. There are a number of ways a larger firm can. Also sales personnel need to be trained due to the way distribution channels are structured. Language barriers can add to the costs of doing business in a foreign market. real estate is becoming expensive and prime locations in big cities are scarce. this may be unavailable to a smaller firm. Cultural and Language Barriers Culture and language may form a barrier to entry – they are important factors to consider when companies enter new markets. A smaller firm's managers necessarily have more general responsibilities. A larger firm can spread the cost of advertising over a greater range of output in media markets. A larger firm can obtain lower-interest charges when borrowing from banks and have access to a greater range of financial instruments than a smaller firm. 91 .September 2007 bureaucracy or training of inexperienced staff. the cosmetics industry overall is perceived as having average investment costs relative to other manufacturing sectors. increase its scale of operation and decrease the long run average cost.

133 133 "Skin Rejuvenation Treatments". http://www. It has been by far the most important and profitable introduction to the market by that industry.com/treatments/.smartskincare.Final Report . Slow and gradual changes can be hard to notice and people often think that a product is not working even when it is delivering positive results. Objective measurements of a treatment's effectiveness are hard to perform outside the confines of a research lab. This new source of competition has and will continue to force the cosmetics industry to rethink the way it does business as traditional cosmetics firms must increasingly take into account the wants of a more ethically motivated and environmentally conscious consumer who is also looking for results in the least amount of time (and for the least amount of money) from a product they can trust. Skin Rejuvenation Background Today's anti-aging and skin rejuvenation treatments occupy a wide spectrum of the cosmetics market and range from basic moisturizers that cost a few dollars to major surgeries which are generally very expensive. Other procedures like invasive cosmetic surgery have been around for longer but recovery times and scaring have restricted their use. III. Invasive cosmetic surgery has been around for some time however long recovery times and scarring has restricted its use. Most experts feel that 2-3 month is a reasonable trial period for non-invasive antiaging/anti-wrinkle products. 92 .1 . Changes in the dermis.September 2007 III. Sources of Competition – Case Studies In this section we consider a number of case studies that illustrate recent trends in alternatives to traditional cosmetics products. The options are numerous and steadily growing in popularity. the deeper layer where wrinkles originate.Medical Devices and the Pharmaceutical Industry Skin care and sun care have clearly been the most dynamic product segments in the cosmetics industry. the skin's outer layer. usually take longer. Even under the best of circumstances. Smart Skincare. The cells of the epidermis. improvements are barely noticeable even after one month. The medical devices industry has been more successful recently in this segment with the introduction of more costeffective and less disruptive procedures. Skin changes do not happen rapidly as the process of rebuilding tissue can take months. are replaced about every four weeks. The pharmaceuticals industry introduced Botox as an alternative to anti-aging creams. People constantly seek out different types of treatments as they search for ways to return a youthful glow to their skin. Innovative ideas from the medical devices and pharmaceuticals industries will continue to put pressure on the cosmetic marketplace to develop new ways to increase the effectiveness of their products.com.

and social obligations do not allow for the significant recovery time sometimes associated with more invasive anti-aging procedures. The majority of these products are relatively new and the long term effects are unknown. Minimally invasive procedures experienced 13 percent growth. middle-age patients treat them as good 134 135 In medicine. Laser resurfacing vaporizes layers of skin which differ from the minimally invasive laser treatments previously described as they leave the surface skin largely intact. new minimally invasive methods include laser and light treatments in which a beam of light damages a problematic skin area with the hope that the body's resulting healing processes will produce cosmetic improvements. are primarily used to correct localized facial defects such as lines. more short and long term side effects. some of the most popular topical treatments are Vitamin C based products which can even be made at home.Final Report . are experiencing strong growth – they grew at a 43 percent annual rate between 2003 and 2004.135 These procedures tend to have longer recovery times. However.September 2007 Skin care procedures include topical treatments. Younger patients can use them to reverse early signs of aging. a topical medication is applied to body surfaces such as the skin or mucous membranes. Similar types of products are also available by prescription. A cream or ointment that may work to improve one person's skin may not have the same effect on someone else. Wrinkle fillers. Product Trends Non-invasive cosmetic treatments in the U. These treatments range from superficial to deep and can have minimal to significant recovery times. and non-invasive and invasive techniques. administered through injection or a small incision. Other.136 New anti-aging products entering this market are challenging the dominance of Botox. folds. Topical treatments134 classified as cosmetics are not regulated by the FDA. job. 25 April 2007. More drastic procedures such as facelifts and laser resurfacing are used to improve substantial facial sag or severe wrinkling. It is hard to know which over-the-counter products are the most effective. They work by creating molecular switches in skin which facilitate new cell growth and inhibit the creation of enzymes that break down the skin's collagen and elastin. Not Your Grandmother's Face Lift". and are more costly. Consumer demand for natural herbal and botanical products is also growing. Non-surgical techniques are becoming more popular for people of all ages as the demands of family. These procedures have become more and more popular recently as down time and recovery periods are generally short. lotions. New technologies in drug delivery methods focusing on transdermal patches and other emulsion formulations for topical creams. the lack of which are the major contributors to wrinkles and sagging skin.S. Biotech Week. and gels are also being studied. 136 "Rhytec. Light wavelengths and strengths are varied to target specific skin depths depending on the severity of the problem. Chemical peels and microdermabrasions work in the same ways as light based procedures by destroying layers of skin to facilitate healing and regrowth. wrinkle fillers. and skin depressions. 93 . furrow.

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alternatives to surgery, while older people can undergo these treatments even if their health does not permit them to endure more drastic procedures.

Botox
Background Botox, or a purified form of botulinum toxin A, gained FDA approval in December 1989 to control involuntary muscle contractions. The toxin, delivered through localized injection, works by binding to nerve endings preventing them from sending signals to muscles to contract and essentially paralyzing them. Cosmetically, it is used to eliminate fine lines and wrinkles in people's faces that typically develop as they age. Botox's effects usually last around 3 to 4 months, though it could be as long as a year, resulting in the need for repeated procedures. Patients can develop antibodies to the toxin, diminishing its effectiveness over time. Scientists are working to see if other strains of the botulinum toxin can be used once the usefulness of the A strain wanes. As the early popularity of the drug's use for cosmetic purposes increased, the FDA responded in November 1994 by issuing a strongly-worded statement which indicated that wrinkle and other anti-aging treatments were unapproved uses of the drug. Further the Agency said that Botox uses of this manner were "an egregious example of promoting a potentially toxic biologic for cosmetic purposes".137 However, in April 2002, the FDA reversed their position and cleared Botox for cosmetic use. In Europe, botulinum toxin Type A is marketed under the brand name Dysport and has been approved for use there since 1990. Currently, this product's major use is for therapeutic treatment though it is also approved for cosmetic uses in several South American and near-East Asian countries. The U.S. FDA is in the final stages of approval for Dysport. Botox will likely face stiff competition from Dysport as it seems to have a better safety profile and a completely different mechanism of action. Initial approval of this drug in the U.S. will be limited to the treatment of cosmetic aliments in specific types of patients (mainly HIV patients) though the company hopes to expand it long term reach to the broader cosmetic market. Competition with the Cosmetics Industry There are many wrinkle and anti-aging treatments available over-the-counter. Specialized skin care treatments are also in demand at high-end spas. However, people are increasingly turning to Botox as news of its success and its popularity as a "lunch hour" procedure spreads. As a result of the need for repeated injections, increasing market awareness and availability, and improved technologies, demand for Botox and similar products should remain strong. This will serve to place continuous pressure on the antiaging cosmetics market which represents high value items for many manufacturers. Botox is also moving into other cosmetic markets all over the world with a strong and growing presence in Latin America, Asia, and Europe.

137

"Botulinum Toxin: A Poison that can Heal", U.S. Food and Drug Administration, http://www.fda.gov/fdac/features/095_bot.html.

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Recently, several relatively high profile cases of doctors injecting patients with "fake" Botox have emerged in the United States. This can cause severe illness, paralysis, and even death. Experts say that as much as 5 percent of all cosmetic injectable treatments in the United States may be counterfeit. Some of the treatments are provided in dubious settings, but many others are administered by doctors or nurses who don't realize they have purchased counterfeit substances or are knowingly using the fake goods to boost their profits. Major medical groups are taking steps to warn consumers while manufacturers are revamping their packaging for easier authentication.138

III.2 - SME Case Studies
Large international firms and their subsidiaries dominate the cosmetics market, receiving over half of the entire industry's sales. Nevertheless successful small businesses are making their presence felt. Some of these firms have been able to change the core values of the cosmetics industry by offering consumers the opportunity to make purchase decisions based on their enthusiasm for these innovative ways of doing business. The case studies below highlight some examples of small firms that have made a worldwide impact on the market.

The Body Shop
Background The Body Shop International plc, or The Body Shop, is a global manufacturer and retailer of naturally inspired beauty and cosmetic products founded by Englishwoman Anita Roddick in 1976. The evolution of The Body Shop from a small store to a huge multinational, with more than 2,100 stores across 55 countries, has positioned it as a leading global cosmetics brand. Its marketing strategy focuses on the use of natural ingredients in personal care products while its core business model promotes various social causes. Public interest generated through The Body Shop's modern corporate social responsibility (CSR) practices has allowed the company to experience consistent growth in sales over the past 30 years. As one of the first cosmetic companies to use natural ingredients in its products and ban the testing of its cosmetics on animals, the rapid growth of The Body Shop is attributed to the identification of the company with social responsibility, respect for human rights, the environment and animal protection, and an absolute belief in community trade. In March 2006, global cosmetics manufacturer L’Oréal acquired The Body Shop for USD 1.14 billion.139 The sale led to outspoken disapproval of the deal among critics and customers as L’Oréal had been severely condemned in the past for its unethical business practices. This move was seen as an attempt by L’Oréal to "buy" The Body Shop's CSR reputation in order to improve its own image. However, L'Oréal's cash reserves has facilitated further development of The Body Shop's community trading relationships and resulted in new partnerships aimed at pursuing further social activism. The Importance of Responsible Business
138 139

Roan, Shari, "Fake Products Can Bypass Quality, Safety", Los Angeles Times, 26 June 2006. ICMR (Link: http://www.icmr.icfai.org/casestudies/catalogue/Business%20Ethics/BECG067.htm)

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The Body Shop's business model is based on five principles which include opposition to animal testing, supporting community trade, defending human rights, protecting the planet, and improving self esteem. These tenets serve as the basis for the operational structure of The Body Shop and give it unique characteristics which are unlike any other company in the industry. Beginning with its first community trading program in India's Tirumangalam village in 1986, The Body Shop continues to build up similar partnerships throughout the world. These programs focus on the development of poor and underprivileged communities throughout the world. In 2006, the company bought 25 natural ingredients from 30 community trade suppliers in 23 countries. These relationships enable the communities to work towards their social and economic goals, while providing The Body Shop with high quality natural ingredients for use in their manufacturing of cosmetics and accessories. Involvement in corporate social responsibility programs also garners significant public and press attention which has enabled the company to keep its advertisement expenditure low.

Natural Cosmetics
Growth in the natural cosmetics industry has been driven by a growing awareness of human environmental impact along with a desire to eliminate the use of products with potentially harsh chemicals. This new organic market segment is growing in Europe at a clip of roughly 20 percent per year even though these products are often more expensive then more traditional versions.140 Natural cosmetic sales are booming in the United States as well, achieving a 10 percent share of the market. In Europe, over 400 SMEs supply organic cosmetics while in the U.S. companies have significantly consolidated operations in recent years in the hopes of gaining more exposure for their products by taking advantage of larger marketing potential.141 In the rest of the world, new manufacturers continue to emerge. Natural cosmetics were originally marketed to people with allergic reactions to traditional products. More recently their popularity has expanded beyond these groups. The companies discussed below are examples of successful businesses which are committed to providing consumers with products made only from the most natural ingredients. Their successes highlight consumer affinity towards these types of products. Natural/organic cosmetics segment is growing fast at around 20 percent a year, yet from a small base: it currently comprises 2-4 percent of the market in Europe and about 10 percent in the U.S. The supply side is more fragmented in Europe – over 400 SMEs produce organic cosmetics – while the U.S. market has seen significant consolidation activity in recent years. In general: • • Natural cosmetics are now being manufactured all over the world. Natural products are often more costly than traditional cosmetics, but that is not slowing their growth trends.

140 141

"Organic Cosmetics Reach a Natural High", Cosmetics International, Vol. 30: 683, October 6, 2006. "Organic Cosmetics Reach a Natural High", Cosmetics International, Vol. 30: 683, October 6, 2006.

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Their commitment to natural ingredients is evident by the "natural bar" on the label which shows consumers the importance of natural ingredients. Lush has grown from one store in 1995 to 320 in 35 countries in 2005 with annual sales of $100 million. available at http://www. The juice used in their products is farmed by indigenous people in Costa Rica. along with infusions of antioxidants and vitamins. Issue 96. Lush Cosmetics believes that fresh. the company's founder and CEO insists that one-third of offerings each year is removed from the sales racks in favour of "more offbeat and tantalizing bath goods".html. personal-care products company.Final Report .142 The company is committed to using natural and organic ingredients and describes each in detail on the product.lush. Burt’s Bees Founded in Maine in the 1980s as an earth-friendly. 148 "Rinse and Repeat".burtsbees.com. 146 Lush Fresh Handmade Cosmetics. The company believes that juices have natural benefits.143 Juice Beauty Juice Beauty offers organic skin care solutions with a fruit juice.com/magazine/96/lush-cosmetics. handmade products are the best for the skin. which help promote healthy skin in a more natural way.144 Since 2004. the company had revenues of $59. July 2005. prohibitions on animal testing. Guatemala.com/za/JB?PAGE=PRESSRELEASECONTENT&ID=100.147 In ten years. It used its original line to create lip care. "Top Rated Organic Skin Care Line Adds New Product to Spring 2007 Core Collection".html. and body care products using the leftover beeswax as the main ingredient in several of their products.September 2007 • Limited regulation allows for an expansive definition of "natural" allowing many manufacturers to make this claim on their products.com. "The Juice Story". and Honduras and on sustainable farms in the United States' Pacific Northwest displaying their commitment to not only finding the most pure and effective organic ingredients but using them in an environmentally responsible way. http://www.com/webapp/wcs/stores/servlet/OurStoryRoxanne?langId=-1&storeId=10101&catalogId=10751. base.148 Avalon Natural Products 142 Burt's Bees.146 In order to maintain innovation in their product lines. Body Care". and providing customers with good value for their money. 143 "Natural Ingredients Drive U. Issue 96.fastcompany.juicebeauty. 144 Juice Beauty. May 4.fastcompany. Burt's Bees began bottling and selling honey. January 2007.juicebeauty. creating ambience. available at http://www. the company has seen revenues grow from $200. They strive to build a Lush Life based on organic ingredients. 145 Juice Beauty – Press Releases. "Our Story". available at http://www. 97 . available at http://usa.4 million and sold an 80 percent share for $177 million. rather than water.com.145 Lush As a company.000 to $12 million in the first three years. facial care.html. cosmeticsdesign. fastcompany. In 2003.com/juicebeautystory.S. available at http://www. fastcompany. "A Lush Life…what we believe".com/magazine/96/lush-cosmetics.com/cgibin/lushdb/faq.html#0. 2005. 147 "Rinse and Repeat". July 2005.

toiletries and accessories. Direct Selling Case Study Direct selling offers consumers a unique opportunity to purchase products outside of the traditional retail environment. "About Us". joy. marketed through a Sales Force of independent Sales Consultants. it has a network of 1.September 2007 Founded in 1989.avalonnaturalproducts. "The Hain Celestial Group Agrees to Acquire Avalon Natural Products. fragrances. Inc. the company has grown rapidly without losing sight of its original business concept. the impact that these companies will have on the cosmetics industry will continue to grow. direct selling careers provided tremendous opportunities for women to earn money with minimal investment. it has developed an advantage over other established players. available at http://www. an international direct selling cosmetics company.150 There are numerous other examples of these types of companies doing business all over the world. The real growth potential for the company lies in emerging markets such as India and China where it continues to focus its operations expansion. In the most recent fiscal year prior to the purchase. 98 .com/?title=About+Us. Introduced by Avon in 1886 when women did not typically work outside the home. The company's mission is inspired by organic agriculture and the ongoing cause of sustainability in health and the environment. colour cosmetics. As the trends show. playfulness. Today. Corporate responsibility is also a large part of Oriflame's business as it is a cofounder of World Childhood Foundation whose mission is to ensure a right to security.php?id=413. At present. Avalon Natural Products makes organic hair and skin care products using 100 percent vegetarian ingredients which are not tested on animals. Concept of Direct Selling Cosmetics have literally led the way in developing the direct selling concept.avalonnaturalproducts.S. Oriflame and Avon Background Oriflame. offers a complete range of high quality skincare. With its distinct model of direct selling of natural Swedish cosmetics from friend to friend. December 20. 150 149 Avalon Natural Products – 2006 Press Releases.7 million consultants across the globe and ranks among the top 10 direct selling companies in the world. organic food and personal care producer The Hain Celestial Group acquired the company for $120 million. millions of people engage in direct selling of cosmetics around the Avalon Natural Products. With sales in 59 countries. Because this method has been so integral in the development of consumer relationships and continues to be a popular method of sales in many countries. an analysis of its impact is important to illustrate the role it plays in the cosmetics industry.com/index.Final Report . and a curiosity about life to every child.149 In December 2006. from North Castle Partners". Avalon Natural Products earned over $40 million in profits. the U. 2006 http://www.

to sell products to their friends and relatives with the aid of either a product catalogue or through demonstrations. This sales philosophy works by allowing independent sales consultants. Online catalogues and access to company consultants are stimulating sales. seek advice and get their product questions clarified directly from the sales consultants in a free and relaxed environment. direct selling companies are changing their strategies and have begun to launch product lines in retail stores and have expanded their products into businesses beyond cosmetics. markets expand in parts of Asia and South America. consumers can ask questions. Consultants are the main force behind the growth of direct sales offering door-to-door expertise and personal experience with the products and remain key to the success of these cosmetic brands. 99 . and demand increases for men's cosmetics. after receiving formal training from the company. Although. Because more women work outside the home and people are less willing to open their doors to strangers. these companies continue to rely to a large extent on the ability of their sales ambassadors to get their name out to consumers. Direct selling also ensures reliability and convenience to the consumers.September 2007 world. they rely less on word-of-mouth then they once did. Avon also offers healthcare and financial products and also sells under other brand names. the innovation potential of these brands will continue to attract future customers especially as disposable incomes rise. direct selling companies are starting to operate through websites and cosmetic counters in large retail stores. and limited reliance on brick and mortar stores. brand recognition and product quality are key to success. the elimination of middlemen. thereby reducing postpurchase dissonance.Final Report . Ultimately. The direct selling approach enables the company to offer low-priced products to its customers because of reduced expenditure on advertising and promotion. This methodology allows consumers to get advice from the people they trust. With sales throughout the world and new product lines aimed at attracting younger generations. Moreover. In addition to cosmetics. under this approach. In some places.

Key Policy Issues – R&D and External Trade In this section we consider the different aspects of the innovation process in the cosmetics industry including R&D activity and patents / intellectual property. Traditional models of international trade explain the direction of trade in terms of the law of comparative advantage. Japan and China. Examples of tests performed include examining the ability of the product to stand up to harsh conditions such as extreme heat or cold. A new technology or process can be protected with a patent. The analysis of Eurostat data measured at a national level allows us to shape the broad picture of the R&D activities performed by member countries.S.September 2007 IV. Building new lines based on ingredients derived from sustainable development practices are also part of this trend taking into account what consumers want in the name of environmental preservation and minimizing societal impacts of new manufacturing procedures and ingredients. specifically aimed at the fast growing markets in Asia. Products are also tested on skin 100 . R&D in this industry is constantly ongoing and conducted to facilitate new product development in response to changing consumer demands. The first input to the innovative activity is given by the expenditure in R&D. Testing is one of the most important steps in getting new products from the lab to the mass market. We also consider data at the firm level to gather information about the R&D intensity of the firms operating in this industry and in the specific market segments. The growing men's cosmetic market has also led to a new direction in innovation for many companies. treatments targeted to specific skin types and unique formulas concentrating on different needs. Later in this section we consider detailed trade data at the product level to calculate 'revealed' comparative advantage for each of the countries in the study. IV. Many companies have increased their R&D spending over the last few years due in part to improved profit levels and a realization that consumers may not always stay brand loyal. Hair and skin care products targeted to the needs of specific ethnic groups are also growing in popularity. Many of the latest advancements include cosmetics that are designed to treat multiple problems with faster acting formulations.. We analyze patent data from the European Patent Office and Micropatent as evidence of innovative activity in the cosmetics industry.1 . This section concludes with a calculation of the trade balance for cosmetics for each country. companies must successfully anticipate the coming consumer trends. In order to stay competitive.Final Report .Research and Development Today's cosmetic market is driven by innovation including new colour pallets. The analysis is performed in order to assess the level of innovativeness of the European cosmetics industry and to compare it with innovative activities in the U.

S. especially those which are designed to treat hair loss.154 The in-house work of the large global cosmetics companies is dominating the market and has created a whole new generation of scientific researchers. 2000.fda. 153 Boseley. Sarah. or in other promotional materials which could result in a product being classified as a drug could launch the regulatory scrutiny that so many companies are trying to avoid. "Particles of Faith". Claims stated on labels. May 8. 2006 101 . available at http://www. has enabled skincare researchers to create products which are more effective at fighting fine lines. they are seeking out alternatives to the traditional creams and lotions which simply cover up blemishes or discolourations.151 Cosmetics companies need to be careful when introducing products that claim to have a medicinal or drug-like benefit. Many companies which manufacture cosmetics are also engaged in the manufacture of other 151 The U. This constraint may cause companies to understate the effectiveness of their products.gov/~dms/cos-217. add shine and volume. on the Internet. Today's skin scientists are probing deeper into the genetic makeup of skin's structure to understand how to design products meant to revitalize the appearance of these cells and eliminate wrinkles. 152 U.html. mitigate or prevent disease or that affect the structure or function of the human body. very tiny particles that can penetrate deeper into the skin..html. Cosmetics however remain outside the scrutiny of these governmental bodies.September 2007 to determine if it is able to achieve the intended effects. The Guardian. The use of nanotechnology. New product portfolios and strong advertising campaigns are boosting sales of these new shampoos. Many of these products are specialized hair care treatments which target specific ethnic groups. in advertisements. revised February 24. September 11. Recent Innovations in Hair Care Products which care for the individualized needs of specific hair types are now becoming the norm.cfsan. Food and Drug Administration. defined as products which cure. Hair products have also become increasingly popular among men. Company spending on this type of activity can take up a sizable share of resources.Final Report .152 Drugs.gov/~dms/cos-toc. The site's main page is available at http://www. The importance of research and development activities cannot be understated. Newsweek International Edition. treat. 154 "The New Science of Cosmetics". Food and Drug Administration website contains a variety of information for the industry including information on cosmetic products and ingredients. undergo highly regulated testing before they can be sold to consumers. and rebuild hair follicles.cfsan. 2004. colouring formulas.153 Recent Innovations in Skin Care As individuals become more and more concerned with the appearance of their skin. Partnerships with salons throughout the world give brand recognition to products along with rights to use and sell specific products in their outlets. Colours are tested in different lights to ascertain how the makeup appears on the wearer at various times of the day. styling agents. New cosmetic products with these characteristics have taken on the name cosmeceuticals.fda. Consumers want shampoos which are able to smooth.S. Office of Cosmetic and Colors Fact Sheet.

R&D activity is surprisingly low in Italy given the relatively large size of its domestic cosmetic market. However. some companies are solely concentrated in the cosmetics business and/or devote all of their research and development allocations to their cosmetics lines. even if they derive significant revenue from cosmetics. The following table provides a sample of the amount of R&D spent in the most recent fiscal year by several major companies. these countries combined account for nearly the entire EU total.5% 1.9% 1. Given that France has the largest domestic cosmetic market it's not surprising that industry R&D allocations are large.4% 2.3% 2. is sometimes difficult as most do not break out their research spending by product segment. The cosmetics industry in Germany allocates €108. Source: Company 2006 Annual Report unless noted.4% 0.9 million to R&D activity.8% 0. Isolating R&D expenditure for these companies. This amount is also expressed as a portion of their total net sales. Table 90 – C&T R&D Spending Total Cosmetic Related R & D Spending Value (€ Millions)* L'Oreal Group Shiseido Co Ltd Beiersdorf AG Estée Lauder Cos Inc Avon Products Inc Henkel Dior Kose Revlon 533 119 95 59 52 51 43 30 Share of Total Sales 3. The list also includes companies where cosmetics are their sole product line. **From 2005 Annual Report which was latest available.4% Alberto Culver** *For companies who report their financial statements in currencies other than Euros.September 2007 types of products. Total R&D spending within an individual country also illustrates the importance of the cosmetic market and the impact that it can have on the economy. a conversion was made using an average exchange rate for the 12 months prior to the end of the fiscal year.Final Report .1% 0. R&D activity is minimal in some countries and zero in a large number of others.8% 11 0.3% 19 1. 102 . These companies detailed the amount of R&D spending on cosmetics in their most recent annual report.

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Table 91- C&T R&D Expenditures by Country
R & D Expenditure Share of R&D Expenditure in Value Added

Last Available Data Point

Total Intra-Mural Expenditure (€m)

2004 0.2 0.8 Austria 2001 0.6 0.3 Belgium 2001 262.4 8.4 France 2004 108.9 6.7 Germany 2001 0.2 1.6 Hungary 1999 2.9 0.3 Italy 2001 0.1 0.3 Portugal 2000 14.6 3.1 Spain 2001 16.8 0.9 United Kingdom 2001 0.0 0.0 Cyprus 2002 0.0 0.0 Finland 2004 0.0 0.0 Latvia 2001 0.0 0.0 Lithuania 2002 0.0 0.0 Malta 2004 0.0 0.0 Romania 2001 0.0 0.0 Slovakia 2004 0.0 0.0 Slovenia Source: Eurostat, dg2452 manufacture of perfumes and toilet preparations. Note*: Intramural R&D expenditures are all expenditures for R&D performed within a statistical unit or sector of the economy.

Note**: No data was found for the U.S., Japan and China from Eurostat or other sources.

IV.2 - Intellectual Property / Patents
Product and process innovation play a large role in the cosmetics industry. Protecting new technologies and processes with patents gives the creator an exclusive right to make, use, or sell a product, device, or process for a set period of time. An analysis of patent data can reveal the extent to which individual companies within each country are creating new products and in what locations these new advancements are concentrated. However, the protections for new products are only extended to patent holders if their application gains approval from the office in which it is filed. Inventions are patentable only if they are novel, industrially applicable, and involve an inventive step. Even under these circumstances, patent protection is not granted automatically. The tables below show the number of patents published within a given year in the EU countries, the U.S., China and Japan. Information is provided from two sources: the European Patent Office (EPO) and Micropatent. The latter is a private company which compiles patent and trademark data. EPO compiles the number of patents published by country while Micropatent provides information on the number of patents filed. Each type of data is illustrative. It is important to note that the number of patents filed will

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always exceed the number of patents published. Over the last thirty years, roughly 40 percent of European patents filed were published by the EPO.155 The mission of the EPO is to support innovation, competitiveness and economic growth for the benefit of the citizens of Europe. The EPO provides information on the number of patents filed in a given year by country and industry. Patents filed in one EU country are not recognized EU-wide. If a company or individual wants their patent recognized in three or more European countries, they have the timelier and more cost effective option of filing for a European patent which can be recognized in all EU countries.156 The EPO provides data on the number of patents published in a particular country. Because of the nature of patent laws, the EPO is concerned with those products which have been invented in locations outside of Europe specifically as it applies to the International Patent Classification system and the Patent Cooperation Treaty.157 Over the past 25 years, the number of cosmetics patents filed has increased tremendously. The United States, Japan, Germany, and France have received the majority of patents published. According to the EPO cosmetics patents published (under the IPC A61Q Class) by the U.S., China, Germany, Japan, Austria, and France combined to issue nearly 55 percent of the total patents published in 2005 in the countries listed in the table below. Other EU countries did not publish a significant number of cosmetic patents in 2005. Over the last 25 years, China, Japan, and Germany have had the most growth in the number of patents published. Meanwhile, the U.K. and Italy have experienced relatively large declines over the same period. Poland accounted for over three-quarters of all the patents published within the EU12. In per capita terms, Austria led the way in 2005, followed by Japan and Germany.

155

European Patent Office, "Facts and Figures 2007", available at http://documents.epo.org/projects/babylon/eponet.nsf/0/ef7be2c894b208f3c125732f005b9452/$FILE/EPO_FaktenZahl en_en.pdf.

European Patent Office, "How to Get a European Patent: Guide for Applicants – Part 1", available at http://www.european-patent-office.org/legal/guiapp1/e/ga_c_i_9.htm#GA_64. 157 World Intellectual Property Organization, "Protecting Your Inventions Abroad: Frequently Asked Questions About the Patent Cooperation Treaty (PCT)", available at http://www.wipo.int/pct/en/basic_facts/faqs_about_the_pct.pdf.

156

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Final Report - September 2007

Table 92 – Total Cosmetics Patents - European Patent Office
Total Patents Published 1980 EU27 EU15 EU12 U.S. Japan China 783 770 13 170 469 0 1985 880 852 28 214 790 0 18 170 83 50 32 0 0 0 10 0 0 73 0 32 40 18 36 45 24 31 182 13 23 0 0 0 0 1990 719 697 22 401 1,111 25 29 193 111 46 53 1 0 1 20 0 0 42 0 12 16 0 20 13 13 13 71 32 33 0 0 0 0 1995 1,993 1,777 216 498 1,961 68 256 727 263 98 0 85 0 0 60 2 27 40 8 48 4 5 15 255 3 37 30 1 0 0 2 0 27 2000 1,945 1,614 331 871 2,524 482 131 741 402 57 27 120 0 0 114 0 26 17 14 2 2 4 7 158 2 47 19 2 0 2 1 0 50 2005 2,599 2,429 170 685 2,976 683 496 1,317 470 37 67 131 6 2 16 2 5 26 3 2 3 5 2 9 0 0 0 0 0 0 0 0 0 Patents Filed Per Million People - 2005 5.30 6.28 1.64 2.31 23.28 0.52 61.17 15.97 7.73 6.82 6.36 3.43 2.99 2.39 1.59 0.58 0.49 0.43 0.39 0.38 0.29 0.23 0.22 0.20 0 0 0 0 0 0 0 0 0

56 Austria 109 Germany 98 France 28 Denmark 15 Portugal 6 Poland 0 Slovenia 1 Cyprus 3 Hungary 0 Lithuania 0 Czech Republic 185 United Kingdom 1 Bulgaria 12 Finland 39 Belgium 2 Romania 46 Sweden 25 Spain 42 Netherlands 3 Greece 97 Italy 11 Ireland 4 Luxembourg 0 Estonia 0 Latvia 0 Malta 0 Slovakia Source: European Patent Office.

105

Germany. Japan.19 0. Japan China France Germany Austria Cyprus United Kingdom Slovenia Netherlands Finland Greece Sweden Czech Republic Spain Italy Ireland Denmark Belgium Luxembourg Portugal Poland Estonia Hungary Latvia Lithuania Malta Slovakia Bulgaria Romania Source: Micropatent. the U.25 0.12 5. China.K. Japan topped the list in 2005.18 0. The U.S...65 0.07 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EU27 EU15 EU12 U.56 5.11 0. and France were the location of nearly twothirds of all patents filed among the group of countries examined.51 0.S.September 2007 Micropatent provides data on the number of patents filed in individual countries.K.380 182 432 496 286 182 668 246 0 19 2 1 1 16 1 30 170 13 0 32 3 0 28 70 5 52 2 2 0 10 8 1 Patents Filed Per Million People 2005 2005 816 1.562 1.20 0.03 14.. Germany.66 813 3 603 1. and Italy saw the largest declines in the number of patents filed while the patent offices in the U. Within the EU countries. 106 .290 1.855 160 338 415 10 1 39 1 4 1 2 1 1 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2.10 0. The pattern in the number of patents filed by country is similar to the number of patents published. The U. followed by France and Germany.50 0. China and Japan saw the greatest increases.051 239 355 368 108 208 402 113 0 33 2 2 36 22 0 42 154 18 0 44 2 0 17 71 1 97 0 0 0 20 2 4 2000 1.03 2.Final Report .10 0.03 1. Table 93 – Total Cosmetics Patents – Micropatent Total Patents Filed 1980 312 309 3 33 319 0 54 52 13 0 50 0 8 15 6 21 0 12 30 4 20 10 1 13 0 0 2 0 0 0 0 0 1 1985 414 406 8 61 860 5 45 79 7 0 64 0 7 40 7 11 0 22 30 9 42 12 7 24 0 0 8 0 0 0 0 0 0 1990 696 673 23 134 233 30 72 234 54 0 26 0 2 38 13 10 2 85 10 33 59 1 3 33 5 0 13 0 0 0 3 0 0 1995 1. France. In per capita terms.23 1.S. and Austria made up over 98 percent of all patents filed in the region.

2005.163 These problems are occurring outside of Europe as well.org/GACG2/Index.165 The problems associated with counterfeits are thought to be particularly acute for SMEs since they lack the resources to secure effective protection and enforcement of their intellectual property rights. 2005.162 English police and trading standards officers. It included 9. 166 Technopolis: ''Effects of counterfeiting on EU SMEs and a review of various public and private IPR enforcement initiatives and resources''. Factiva .7 million (€ 4. Australia seized almost 30. Factiva . 2006. customs officers intercepted a shipment of counterfeit lipsticks worth over €377 million.com. Factiva .000 bottles of fake designer perfume with a street value of $2 million (€ 1. 165 Nikkei Report. "The Economic Impact of Fakes in Europe". 2007.gacg.Counterfeit Goods A 2000 study by the Centre for Economics and Business Research of the Global AntiCounterfeiting Group estimated that counterfeit perfumes and cosmetics cost the EU €3. busted a £4 million (€ 5. in Japan. 162 Cosmetics International. cosmetics with an estimated value of about 520 million yen (€ 3.Dow Jones Reuters Business Interactive LLC. 158 107 . 2007. July 19.000 packages of fake Shiseido Co.Dow Jones Reuters Business Interactive LLC.480 bottles labelled Lancôme Miracle. 163 Indo-Asian News Service.161 In France. "French Customs Officers Have Intercepted a Shipment of Counterfeit Lipsticks Worth €377.2 million) that apparently were imported from Poland. Customs officers in Melbourne.160 Recent news reports illustrate some of the problems confronting authorities regarding trade in counterfeit cosmetics all over the world. On April 10. "Fakes are Scent Down".3 . Around 31. 164 MX (Australia).gacg.1 million of them were cosmetics and fragrances. stifles investment and innovation.Final Report . 159 Global Anti-Counterfeiting Network.500 Chinese made copies of the Bourjois Rouge Connection lipstick were seized in this March 2007 operation. 160 "EU Moves to Curb Counterfeit Cosmetics Trade".130".0 billion annually in lost revenue. 14 February 2007. more than 9. April 9. and about 10. 161 ITAR-TASS World Service. July 27. available at http://www. the Xinhua News Agency reported in June 2005 that officials seized counterfeit 150.9 million). Factiva Dow Jones Reuters Business Interactive LLC.000 bottles of fake perfume.September 2007 IV.900 branded Gucci. "ANALYSIS: Fighting Chinese Counterfeiters". Russian police seized more than 1. 1.000 being passed off as Joop!164 Finally. Counterfeiting reduces company revenues.9 million) scam by seizing 30. March 9. in February 2007. "Brothers Confess to Four Million Pound Perfume Racket".2 million bottles of counterfeit perfume and eau de toilette worth $5. and retards economic growth along with adversely affecting jobs and tax revenues. 2007.org/GACG2/Index.aspx. "The Economic Impact of Fakes in Europe". available at http://www. "Moscow Police Seize Huge Amount of Counterfeit Perfume". Cosmeticsdesign.Dow Jones Reuters Business Interactive LLC.158 The study further shows that applying marginal profitability ratios to that estimate of lost revenue yields a further €555 million profit loss to the sector each year. April 11. A recent study by Technopolis166 had the mandate of Global Anti-Counterfeiting Network.159 The European Commission estimates that about 70 percent of counterfeit goods come from Asia. August 31.aspx. 2007. Factiva Dow Jones Reuters Business Interactive LLC. Of the 100 million counterfeit goods seized in 2003.2 million) in April 2006.

The study found that the programmes organized by governments tended to be awareness-raising initiatives rather than measures directed at assisting SMEs. 108 . The study makes the important point that judicial and administrative actions are available however proper registration of intellectual property is necessary to institute an action and 80% of EU SMEs fail to register their patentable rights.September 2007 determining what has been done within the EU to accommodate SMEs in their fight against intellectual property infringements. introduction of a Community Patent (similar to the Community Trade Mark and Design). The study confirmed that China is at the top of the list of countries producing counterfeit products (56% of SME survey respondents said that China was the main source of counterfeits) followed by countries in the EU. The study suggested a number of measures targeted at SMEs including: reduction of Community Trade Mark registration fees for SMEs. a databank of original products (similar to Italian FALSTAFF initiative) and the introduction of court costs insurance schemes. assistance to SMEs that currently make inadequate use of intellectual property protection measures.Final Report . Specifically enforcement bodies in China are conducting more actions and the legal system is becoming more in line with international standards. The study asserts that the abuse of intellectual property is set to diminish as China adapts to international commercial norms.

the two left quadrants display cosmetics products whose exports are growing slower than the average of total exports growth for that country over the period from 1999-2005. but also by the average annual export growth for each product group. 109 . Simultaneously.Final Report .4 . This is a particularly strong feature of the RCA analysis that follows. It is most often applied to real-world situations through an indirect methodology which utilises information "revealed" from post-trade situations. The two right quadrants display cosmetics products whose exports are growing faster than the average of total exports for that country. The source data for this analysis is a combination of United Nations (UN) Commodity Trade Statistics Database and Global Insight's own World Economic Service data. In terms of competitive positioning. The various quadrants capture the relative positioning of cosmetics products in the world’s export markets and qualify each country's comparative advantage by incorporating the share of the country's export market and a growth rate for shipments abroad.External Trade Revealed Comparative Advantage (RCA) Analysis Traditional models of international trade explain the direction of trade in terms of the law of comparative advantage167 however it does present some difficulties.September 2007 IV. The two bottom quadrants represent product groups whose RCAs are less than zero. Comparative advantage is powerful in helping to explain trade flows however for the purposes of this study it's important to note that comparative advantage does not provide a true or complete measure of a country’s competitiveness. Value added as well as the measures of productivity and unit labour costs that were examined earlier in this study are other useful indicators to assess a country's competitiveness. The RCA is calculated as follows: The dynamic component of this analysis is best captured by the classification of products not only by their 2005 RCA. 167 See Greenaway and Milner (1993) as the basis for the theoretical underpinnings of the following discussion of RCA analysis. Using the UN Commodity Trade Statistics ensured consistency when comparing various countries' export share of a particular cosmetic product. The top two quadrants of Figure 26 represent product groups whose RCAs are greater than zero. In particular it is difficult to quantify and test directly. cosmetics product exports fall into four groups. RCA Analysis: Cosmetics Product Comparative Positioning Figure 26 illustrates the structure of the four quadrant analysis of competitive advantage in the cosmetics industry.

Cosmetics exports of all countries included in this analysis grew at a compound annual growth rate of 8.1 % respectively. In 2005 France exported more than € 8 billion worth of cosmetics. Improving Product Groups (RCA<0 and 0 and growing faster than average). Europe's second largest exporter.S.RCA Analysis Explanation All Countries Total Cosmetics Exports Growth Rate Revealed Comparative Advantage Greater Than Zero Threatened Product Groups: Yielding to Market Pressure Strongly Positioned Product Groups: Well Positioned to Maintain Comparative Advantage Less Than Zero Weakly Positioned Product Groups: Weak and Declining Comparative Advantage Improving Product Groups: With Potential to Gain Market Share Compound Annual Growth Rate of Cosmetics Exports Cosmetics Exports Overview Table 94 illustrates the size (in Euros) and compound annual growth rate from 1999 to 2005 of cosmetics exports.S. the world's dominant cosmetics exporter.September 2007 Strongly Positioned Product Groups (RCA>0 and growing faster than average). well below the average. Weakly Positioned Product Groups (RCA <0 and growing slower than average). This is more than twice the amount exported by Germany. Italy. has cosmetics exports that are roughly the same 110 . evidence of Europe's continued strength in the cosmetics industry. Hungary. The U. Threatened Product Groups (RCA>0 and 0 and growing slower than average). Figure 26 . The United Kingdom. There is also evidence that many eastern European countries are becoming major cosmetics producers.5% and 4. and 35% of total European exports. France has. The U.8 billion of cosmetics products per year. The highest compound annual growth between 1999 and 2005 were in Poland. and continues to be.4% from 1999 to 2005. is the largest cosmetics exporter of the non-EU countries exporting € 3. and Latvia . and Spain round out the top five European exporters. Fourteen of the 24 European countries found in Table 94 were growing faster than the overall average.Final Report .each grew at more than 27% annually from 1999 to 2005. which collectively account for nearly 80% of Europe's total cosmetics exports. However exports from France and the United Kingdom have grown by 6.

1% 1.9% 1.161 1.1% 32.0% 6.7% 6.1% 0.707 111.774 4. exports grew by only 7% annually over the same period.0% 0.531.356 167.2% 9.103 5.841 7.1% 0.520 443.2% 3.967.614 2.6% 27.1% 0.066 483.759 4.378.146 17.209 5.3% 5.3% 0.107 245.298 698.1% 0.888 2.639 35.082 78. China and Poland have followed similar paths over the last six years.549.314.692 633.3% 20.1% 0.0% 4.3% 8.107 172.278 139.6% 3.3% 0. Not only are they exporters of approximately the same size.1% 0.457 2.1% 0. but U.7% 5.3% -4.0% 7. but each grew at a compound annual rate of around 28%. Only Hungary and Latvia grew faster and each of them is still considerably smaller.3% 0.100 381.2% 2.6% 0.279 23.1% 13.3% 12.0% 3.1% 0. China exports € 825 million of cosmetics products per year.3% 17.7% 8.073 209.332 121.1% 11.000) EU Share 8.062 151.424 969.079 59.089.374.4% Source: United Nations.635 49.Final Report .910.0% 0.5% 0.795 81.3% 4.490.055 571.000) EU Share (6-year) 5.471 2. The upper left quadrant countries with threatened cosmetics industries.4% 0.683 14.403 750.779 60.393 81.476 38.728 27.8% 0.2% 0.8% 2.116. The bubbles in the figure fall into one of four categories. the bottom right quadrant contains countries that have improving cosmetics industries.335 172.578 28.3% 0.7% 0.0% 6.5% 10.578 14.539 3.410 23.672 1.3% 7. All of the largest cosmetics exporters have RCAs above zero – they have a comparative advantage in cosmetics products. Finally.213 222.353 183.0% 1.504 33.744 4.792 3.5% 16.227 992.526 47.9% 16. Lower left quadrant contains countries with weakly positioned cosmetics industries.7% 6.7% 0.6% 14.089.347 9.995 12. Comtrade Database Figure 27 presents the RCA quadrant analysis of the total cosmetics industry for each of the 27 countries.5% 15.132.2% 4.8% 4.8% -2.0% 17. Luxembourg Portugal Finland Latvia Lithuania Slovakia Malta Estonia Cyprus Total EU USA China Japan Grand Total 2005 Value (€ 1.4% 0.1% 8.1% 1.291.456 2.0% 0. Table 94 – C&T Industry Exports Product France Germany United Kingdom Italy Spain Netherlands Belgium Poland Ireland Sweden Denmark Hungary Austria Greece Czech Rep. The size of the bubble is proportional to its 2005 export value in Euros.2% 12.8% 0.S.815.6% 9.2% 12.577 835.677 7. Despite a clear competitive advantage.4% 34. three of the top 111 .9% 4.0% 1999 CAGR% Value (€ 1.683 38.9% 0.698 688. The upper right quadrant contains countries with strongly positioned cosmetics industries.0% 28.September 2007 as Germany.0% 12.0% 0.081.7% 4.4% 0.

the extremely rapid export growth over the last 6 years makes it clear that China's cosmetics industry is poised to improve rapidly and gain market share. and the U.S. Line marks compounded annual growth rate (CAGR) of all cosmetics product exports . Revealed Comparative Advantage Switzerland Ireland Malta Norway Cyprus 0 Sweden Austria Japan Finland Estonia Belgium USA Italy Spain Lithuania China Slovakia -1 -5% 5% 15% 25% 35% Total Exports of Cosmetics (CAGR%. China is the only other country analyzed with a similarly high compound annual growth rate.K. Each has a revealed comparative disadvantaged while growing significantly more slowly than the industry as a whole. World Economic Service Table 95 categorizes each of the countries' positioning. evidence that they may be yielding some of their advantage to upstart cosmetics producing countries. Figure 27 . This group is well positioned and their cosmetics industries can be expected to continue to flourish. Despite having an RCA below one.Final Report .September 2007 four cosmetics exporters by value. Each has grown at more than three times the cosmetics industry average. are threatened. and Hungary form a clear cluster of very well positioned cosmetics industries.1% annually.all countries.Cosmetics Industry RCA Analysis 1 United Kingdom Bubble size proportional to: Trade Value France Luxembourg Greece Poland Latvia Germany Hungary Denmark Netherlands Portugal Czech Rep. 6 Year) Source: UN. Japan is the largest weakly positioned cosmetics industry. France. Comtrade Database & Global Insight. while maintaining a clear comparative advantage in the industry.7%. Austria. Poland. Japan's RCA is well below one. U. at 28.. and Estonia are the only European countries with a clearly weak cosmetics industry. Latvia. while cosmetics exports have grown at only 6. 112 . Each has grown more slowly than the industry. Finland.

Table 96 shows the size. Lithuania Portugal Slovakia Requires Repositioning: Threatened Product Groups Belgium Cyprus France Ireland Malta Norway Switzerland United Kingdom USA Uncompetitive: Weakly Positioned Product Groups Austria Estonia Finland Japan Sweden Source: United Nations. 9% 10% 11% 12% Total Exports of Cosmetics (CAGR%. Only the toiletries and perfumes and fragrances product groups are threatened despite being quite large and having an RCA value well above zero.Cosmetics Industry Product Positioning Powerful Prospects: Strongly Positioned Product Groups Denmark Germany Greece Hungary Italy Latvia Luxembourg Netherlands Poland Spain Competitvely Improving Product Groups China Czech Rep. Skin care and sun care are the EU's best positioned product group while decorative cosmetics. Hair Care and Colorants are 113 . hair care and hair colorants are also strongly positioned as their rate of export growth is faster than the industry average. and skin and sun care. and comparative advantage of six cosmetic product groups. The EU region in fact has a comparative advantage in every cosmetics product group. compound rate of growth. The two largest cosmetics product groups in Frances are perfumes and fragrances.3% and 35% of the more than € 8 billion worth of cosmetics exported in 2005. 6 Year) Source: UN. Comtrade Database & Global Insight.Final Report .all countries. World Economic Service Figure 29 illustrates the relative strength of the overall cosmetics industry in the EU.September 2007 Table 95 . France is the largest exporter of cosmetics products in the world. World Economic Service Figure 28 – EU Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value Revealed Comparative Advantage 0 PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES -1 4% 5% 6% 7% 8% Line marks compounded annual growth rate (CAGR) of all cosmetics product exports . respectively accounting for 37. Comtrade Database & Global Insight.

335 Hair Colorants 0.1% 1. Table 96 .307 8% 570. World Economic Service Figure 29 illustrates the relative strength of the overall cosmetics industry in France.5% share of the total cosmetics market.4%.758 Hair Care 0. has a strong comparative advantage but is growing only slightly faster than the industry average. Comtrade Database & Global Insight.3% 6.437 Toiletries 0.369 10% 529.757 770. This groups is still strongly positioned.761 527.5% Perfumes And Fragrances 0. Two cosmetic product groups are clearly most strongly positioned.827. skin and sun care.817 2.3% demonstrates that this product group is threatened and in need of repositioning.4% 6. suggesting there is ample room for this product group to grow. France has a comparative advantage in every cosmetics product group. well below its 28.852 Skin Care & Sun Care 0.018. despite it being the largest cosmetics product group and having an RCA value well above zero. caution is advised and this product may soon be in need of repositioning. its 4.081. Additionally France's share of the hair colorants market is only 13.539 100% 5. 114 .491 616. Toiletries are France's worst positioned product group.583 322.France Cosmetics Industry Exports Product RCA 2005 1999 CAGR% Value (€ 1.531.786 8. Perfumes and fragrances is a threatened product group.327.000) Share Value (€ 1.4% 8. but considering that skin and sun care have been growing annually at 10.4% CAGR is well below the cosmetics industry average.5%.September 2007 the fastest growing product groups with compound annual growth rates of 15% and 12.0% 12.712.000) Share (6-year) 42% 10% 31% 4% 3% 10% 100% 4.Final Report .869 3.496 4% 162.171 37% 2.055 7% 228. Hair care and colorants have both a strong comparative advantage and are growing faster than the industry average.1% respectively.140 35% 1.7% 15.693 Decorative Cosmetics 0. France's second largest product group.614 Source: United Nations. despite an RCA above zero.540 Total 0. compound annual growth of only 1.

296 3.153 11% 249.5% 9. and accounts for 26% of the nearly € 4 billion worth of cosmetics exported in 2005.012 Total 0.228 252.Germany Cosmetics Industry Exports Product RCA 2005 1999 CAGR% Value (€ 1.3% of all export of skin and sun care products covered in this study. It is the largest group by value. 6 Year) Source: UN.308 446. and comparative advantage of six cosmetic product groups. Comtrade Database & Global Insight.2% 15.030.789 Decorative Cosmetics 0.456 100% 2.3% 8.142 Skin Care & Sun Care 0.297 860. Table 97 shows the size. World Economic Service Figure 30 illustrates the relative strength of the overall cosmetics industry in Germany. 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Total Exports of Cosmetics (CAGR%. Skin and sun care is the most competitively positioned cosmetics product group in Germany.000) Share (6-year) 23% 12% 20% 7% 13% 25% 100% 10. grew the fastest from 1999 to 2005.Final Report .506 Hair Colorants 0. compound rate of growth.7% 9.213 12% 284.all countries.311 892.440 485.9% Perfumes And Fragrances 0.520 22% 491. Table 97 . World Economic Service Germany is the second largest exporter of cosmetics products in considered in this study. It is also the fastest growing product groups with a compound annual growth rate of 15.132.238 1. Further.888 Source: United Nations.France Cosmetics Industry RCA Analysis Bubble size proportional to: Trade Value 1 Revealed Comparative Advantage 0 PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES -1 -2% Line marks compounded annual growth rate (CAGR) of all cosmetics product exports .5% 10.192 6% 144. Germany has a comparative advantage in every cosmetics product group.967. Each of Germany's product groups is growing faster than the industry average of cosmetics.964 22% 529. 115 .414 26% 433.5%.4% 10.973 Hair Care 0.000) Share Value (€ 1. and has an RCA greater than zero.465 Toiletries 0.September 2007 Figure 29 . Germany is responsible for 12. Comtrade Database & Global Insight. Skin and sun care is the largest cosmetics product group export.

1% higher than the average.715 1. Toiletries are the only cosmetics product group where concern is warranted.965 Skin Care & Sun Care 0. Comtrade Database & Global Insight. Table 98 shows the size.'s total exports.1% Perfumes And Fragrances 0.3% 1.Final Report .291.236 Hair Care 0.548 2.'s more than € 2.666 Toiletries 0.711 Hair Colorants 0. 6 Year) Source: UN.354 8% 219.all countries. better than the industry average.396 428.324 Total 0. a slight shift in growth could land this product in the threatened category. Table 98 . With a compound annual growth rate 0.672 Source: United Nations.4%.1% -2.5% of the U.451 165.910.000) Share (6-year) 11% 10% 20% 8% 10% 42% 100% 9.K.528 241.111. With respective export values of € 1.K.6% 2. Comtrade Database & Global Insight.1 billion and € 677 million. World Economic Service The United Kingdom is the third largest cosmetics exporter in Europe.United Kingdom Cosmetics Industry Exports Product RCA 2005 1999 CAGR% Value (€ 1. they represent 61.078 10% 222.September 2007 The rest of Germany's cosmetics product groups are also well positioned to maintain their comparative advantage.3-10. and hair colorants are all clustered together with growth rates of 9.385 6% 190. Toiletries and skin and sun care make up the two largest cosmetics export product groups in the U. compound rate of growth.000) Share Value (€ 1.644 38% 960.Germany Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES Revealed Comparative Advantage 0 Line marks compounded annual growth rate (CAGR) of all cosmetics product exports . Each also has a comparative advantage. Perfumes and fragrances.770 Decorative Cosmetics 0.704 15% 249.471 100% 2.2% 7.6% European exports. hair care. Figure 30 . -1 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Total Exports of Cosmetics (CAGR%. World Economic Service 116 . and comparative advantage of six cosmetic product groups. The U. decorative cosmetics.4% 4.K.460 677.9 billion worth of exports represent 12.5% 4.508 286.306 23% 448.

Final Report . 4% 6% 8% 10% 12% Total Exports of Cosmetics (CAGR%. only perfumes and fragrances are well positioned.all countries. has a comparative advantage in every cosmetics product group. Figure 31 . The rest of the product groups presented are mature. The U. Despite strong comparative advantage in all products.K.September 2007 Figure 31 illustrates the relative strength of the overall cosmetics industry in the United Kingdom. it is the only product that is growing at better than the industry average. Comtrade Database & Global Insight. World Economic Service 117 .United Kingdom Cosmetics Industry RCA Analysis 1 Revealed Comparative Advantage 0 Bubble size proportional to: Trade Value PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES -1 -6% -4% -2% 0% 2% Line marks compounded annual growth rate (CAGR) of all cosmetics product exports . 6 Year) Source: UN. With a compound annual growth rate of 9.4%. slow growing and yielding to market pressures.

World Economic Service Figure 32 illustrates the relative strength of the overall cosmetics industry in Italy. they represent 55% of Italy's total exports. Italy has a comparative advantage in every cosmetics product group.Final Report . although smaller than the United Kingdom.126 Skin Care & Sun Care 0.959 Total 0. Italy's more than € 2 billion worth of exports represent 9% European exports.089. skin and sun care.9% 13. Slight repositioning in the future maybe necessary to keep this product group well positioned and prevents it from yielding to market pressures.777 24% 239. decorative cosmetics.369 Hair Care 0.458 30% 307. Despite having a clear comparative advantage.161 100% 1.644 10% 124. Comtrade Database & Global Insight.478 204. Table 99 shows the size. is the fourth largest cosmetics exporter in Europe.Italy Cosmetics Industry Exports Product RCA 2005 1999 CAGR% Value (€ 1.000) Share (6-year) 28% 13% 21% 4% 11% 23% 100% 12.351 504. and comparative advantage of six cosmetic product groups. Perfumes and fragrances along with skin and sun care make up the two largest cosmetics export product groups in Italy. Toiletries are a more mature.September 2007 Italy.317 344.7% 11.547 308. compound rate of growth. Table 99 . With respective export values of € 636 million and € 505 million.343 Hair Colorants 0.3%. and hair care each have RCAs above zero and growth rates between 12. but compound growth is barely staying ahead of overall growth.428 16% 261.3% 8. 118 .434 2.041 4% 40.2% 14. compound annual growth of 4.116. slowly growing segment of Italy's cosmetics industry.195 90. Perfumes and fragrances.9% and 14. These products are all very well positioned and should be expected to maintain their comparative advantage in the future.698 Source: United Nations.7% 13. Hair colorants have a clear comparative advantage.812 15% 143.106 Toiletries 0.560 636.7% is nearly half that of the industry average.0% Perfumes And Fragrances 0.7% 4.795 Decorative Cosmetics 0. This product group is threatened and may be yielding to market pressure.000) Share Value (€ 1.

With respective export values of € 416 million and € 370 million. World Economic Service Figure 33 illustrates the relative strength of the overall cosmetics industry in Spain. 6 Year) Source: UN. 119 .043 18% 139.378.152 27% 225. perfumes and fragrances have grown at nearly twice the average compound annual rate.all countries. Table 100 shows the size.216 Total 0.9% 18.Italy Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value Revealed Comparative Advantage 0 PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES -1 0% 2% 4% 6% 8% Line marks compounded annual growth rate (CAGR) of all cosmetics product exports .1% of Spain's total exports.September 2007 Figure 32 . 10% 12% 14% 16% 18% Total Exports of Cosmetics (CAGR%. although smaller than the United States. Perfumes and fragrances are a particularly large and well positioned product group. World Economic Service Spain. Spain has a comparative advantage in every cosmetics product group.157 64. Comtrade Database & Global Insight.674 5% 44.791 Skin Care & Sun Care 0. Table 100 . In addition to a strong comparative advantage. 16.4 billion worth of exports represent 6% European exports. is the fifth largest cosmetics exporter in Europe.1% 16. they represent 57. Perfumes and fragrances.319 245. and comparative advantage of six cosmetic product groups.209 Hair Care 0.Spain Cosmetics Industry Exports Product RCA 2005 1999 CAGR% Value (€ 1.3% Perfumes And Fragrances 0. Perfumes and fragrances and toiletries make up the two largest cosmetics export product groups in Spain.1%. and hair colorants are clustered together.598 370.451 83.680 197.988 14% 77.525 1.490 6% 30.157 Decorative Cosmetics 0. each is very strongly positioned.000) Share (6-year) 25% 7% 20% 4% 11% 33% 100% 16.8% 8. compound rate of growth.6% 12.958 Toiletries 0. Comtrade Database & Global Insight.769 Hair Colorants 0.881 30% 170.Final Report .1% 6.3% 9.227 100% 688.100 Source: United Nations. Spain's nearly € 1.633 416. hair care.000) Share Value (€ 1.

a relative slow down of growth in comparison to the cosmetics industry as a whole could threaten the industry. Poland's € 750 million worth of cosmetic products exports represent 3.5% of all exports from Poland. the second and third largest product by value demonstrate strong comparative advantage. Comtrade Database & Global Insight.401 25% 52. Comtrade Database & Global Insight.654 111.000) Share Value (€ 1.055 Source: United Nations. 6 Year) Source: UN.422 13% 5. Despite an RCA of 0.3% indicated that the decorative cosmetics product group is yielding to market pressure.713 Toiletries 0. This € 221 million worth of exports represents 29. World Economic Service 120 . the growth rate of 6.000) Share (6-year) 3% 10% 13% 33% 10% 31% 100% 61.098 29% 22.156 9% 57. nearly ten times the value of this group in 1999.4% 23. and comparative advantage of six cosmetic product groups.410 Decorative Cosmetics 0.1% 36.Poland Cosmetics Industry Exports Product RCA 2005 1999 CAGR% Value (€ 1. Skin and sun care makes up the largest cosmetics export product group in Poland. However. 10% 15% 20% 25% Total Exports of Cosmetics (CAGR%.2% European exports.558 221.September 2007 Toiletries and skin and sun care.2% in 1999.2% 27. and already threatened by slower than average growth. Decorative cosmetics are a mature product group.329 Hair Care 0.all countries.Spain Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value Revealed Comparative Advantage 0 PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES -1 0% 5% Line marks compounded annual growth rate (CAGR) of all cosmetics product exports .1% 46. Table 101 shows the size.5% 26.848 Total 0. Table 101 .966 15% 17.066 100% 172. compound rate of growth.8% Perfumes And Fragrances 0. World Economic Service Poland is the eight largest cosmetics exporter in Europe.171 Hair Colorants 0.5% 3.634 70.023 9% 16.Final Report .340 94. Although they are currently well positioned.583 Skin Care & Sun Care 0.569 68.16. each is growing at slightly above the industry average. up from just 1.557 750. Figure 33 .599 184.

121 .5% annually. Decorative cosmetics. and growing at 3.S.4 million in 1999 to nearly € 95 million in 2005. Poland has a comparative advantage in every cosmetics product group. Hair care is the only poorly positioned product. skin and sun care. Skin and sun care and toiletries make up the two largest cosmetics export product groups in the United States. All product groups except for hair care are well positioned to maintain their comparative advantage. Table 102 shows the size. they represent 53% of U.14 billion and € 889 million. Figure 34 .Final Report . The cosmetics industry of Poland experienced explosive growth from 1999 to 2005.all countries. and toiletries have all grown at more than 23% annually. PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES 40% 50% 60% 70% 80% -1 -10% 0% 10% 20% 30% Total Exports of Cosmetics (CAGR%. compound rate of growth. World Economic Service The United States is the largest non-European cosmetics exporter studied in this report. well below the industry average. With respective export values of € 1. It is very nearly the smallest export product group by value. and comparative advantage of six cosmetic product groups. Comtrade Database & Global Insight. from € 5.September 2007 Figure 34 illustrates the relative strength of the overall cosmetics industry Poland. almost three times the industry average. Perfumes and fragrances have grown at a compound annual rate of 61%. hair colorants. 6 Year) Source: UN.Poland Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value Revealed Comparative Advantage 0 Line marks compounded annual growth rate (CAGR) of all cosmetics product exports .'s total exports.

at least from an export perspective.141..S.963 Decorative Cosmetics 0.301 6% 238.815. and toiletries are growing slower than the industry average.S.5% 7.349 888.Final Report .675 30% 709. decorative cosmetics group is well positioned.577 100% 2.S.242 Hair Care 0.September 2007 Table 102 .6% 3. These positive RCAs may be more a signal of how competitive these product groups once were. The U. Comtrade Database & Global Insight. and is expected to maintain its comparative advantage.355 364. As a result.215 667.3% -1.4%.913 23% 607. Loyal customers. Perfumes and fragrances. Despite the apparently high annual growth rate it is important to note that while the overall cosmetics industry has grown at 8. The U.0% Perfumes And Fragrances 0. World Economic Service Figure 35 illustrates the relative strength of the overall cosmetics industry in the United States.909 Hair Colorants 0.549.9% 6.317 3. despite RCAs well above zero.397 14% 279. has a comparative advantage in every cosmetics product group.198 217. skin and sun care.4% in addition to the highest RCA value of any product in the nation.943 Skin Care & Sun Care 0.9% 11.3% annually from 1999 to 2005. declining segment for the U. decorative cosmetics have grown at a faster 11.United States Cosmetics Industry Exports Product RCA CAGR% 2005 1999 Value (€ 1. may be artificially propping this product up revealing a comparative advantage in consumer preference rather than production capabilities. Hair care is a mature.525 10% 289. but less dominant than it appears when compared to the narrower product group. Exports declined by a compound annual rate of -1. 122 . hair colorants.4% annually.325 1.000) Share Value (€ 1. It has a compound annual growth of 11.4% 8.353 Source: United Nations.766 18% 423. Decorative cosmetics are the only strongly positioned product group in the U.473 Toiletries 0.S.423 535. as a result of effective branding.000) Share (6-year) 17% 11% 28% 9% 11% 24% 100% 7. each is significantly threatened and in need of repositioning.822 Total 0.

Final Report . World Economic Service 123 . Comtrade Database & Global Insight. -2% 0% 2% 4% 6% 8% 10% 12% 14% Total Exports of Cosmetics (CAGR%.United States Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value Revealed Comparative Advantage 0 PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES -1 -4% Line marks compounded annual growth rate (CAGR) of all cosmetics product exports . 6 Year) Source: UN.September 2007 Figure 36 .all countries.

053 328. growing at a compound annual rate of 50.3% 50.187 21% 55.541 2% 2.513 30% 21. With respective export values of € 329 million and € 249 million. three times greater than the industry average. The compound annual growth rate of all Chinese cosmetic product groups combined was more than 25% annually.000) Share Value (€ 1.680 28. The speed of growth in the Chinese cosmetics industry is so fast that each product group is improving and has tremendous opportunity to gain market share. From 1999 to 2005 skin and sun care products increased more than 11 fold.4% 21. and comparative advantage of six cosmetic product groups.536 37.4% 28.914 16. Table 103 shows the size. compound rate of growth.5% 24.000) Share (6-year) 1% 30% 12% 5% 3% 48% 100% 39.China Cosmetics Industry Exports Product RCA CAGR% 2005 1999 Value (€ 1. the smallest and least comparatively advantaged cosmetics group in China has grown at nearly 40% annually.692 100% 183.520 Source: United Nations.806 Hair Care -0. they represent 69% of China's total exports.858 39% 88.0% 25.Final Report .251 Skin Care & Sun Care -0. World Economic Service Figure 37 illustrates the relative strength of the overall cosmetics industry in China. The apparent weakness belies the potential of the Chinese cosmetics industry.975 Toiletries -0.September 2007 China is the second largest non-European cosmetics exporter studied in this report. The compound annual growth rates of each of these product groups are phenomenally high.683 Total -0. Table 103 . China does not have a comparative advantage in any cosmetics product group.552 Hair Colorants -0.337 835.450 4% 9.6% 29.252 Decorative Cosmetics -0. Toiletries and skin and sun care make up the two largest cosmetics export product groups in China.024 176.0%. Even perfumes and fragrances. Comtrade Database & Global Insight. 124 .333 248.143 3% 5.7% Perfumes And Fragrances -0.

World Economic Service Japan is the third largest non-European cosmetics exporter studied in this report.4% annually.9% 7.578 100% 443. Comtrade Database & Global Insight.China Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES Line marks compounded annual growth rate (CAGR) of all cosmetics product exports .070 119.3% 2.4% per 125 .611 Hair Care -0.010 362.000) Share Value (€ 1.365 Toiletries -0.1% Perfumes And Fragrances -0. they represent 76% of Japan's total exports.8% 2.329 633. exports of hair care products have grown 10.1% 9.151 3% 12.September 2007 Figure 37 .732 8% 41.Japan Cosmetics Industry Exports Product RCA CAGR% 2005 1999 Value (€ 1.599 Hair Colorants -0.028 Total -0.146 Source: United Nations. Revealed Comparative Advantage 0 -1 0% 10% 20% 30% 40% 50% 60% Total Exports of Cosmetics (CAGR%.983 0. Comtrade Database & Global Insight. Although the industry export as a whole are growing at 8.986 1. World Economic Service Figure 38 illustrates the relative strength of the overall cosmetics industry in Japan.165 78. and comparative advantage of six cosmetic product groups.885 12% 50. 6 Year) Source: UN. Despite the RCA below zero.7% 7.9% 6.2% 3. Japan does not have a comparative advantage in any cosmetics product group.613 22.135 Decorative Cosmetics -0.all countries. Even this somewhat positive news is mitigated by the fact that hair care is a particularly fast growing product segment world wide. With respective export values of € 362 million and € 120 million.409 Skin Care & Sun Care -0.000) Share (6-year) 0% 22% 54% 3% 11% 9% 100% -1.Final Report . Skin and sun care and decorative cosmetics make up the two largest cosmetics export product groups in Japan. Table 104 .670 19% 96. compound rate of growth.157 57% 240. Table 104 shows the size. exports are growing faster than the cosmetics industry average.696 48. Hair care is the lone bright spot in the outlook for the Japanese cosmetics industry.

Imports grew at a compound annual rate of only 7% to €2.Japan Cosmetics Industry RCA Analysis 1 Bubble size proportional to: Trade Value PERFUMES AND FRAGRANCES DECORATIVE COSMETICS SKIN CARE & SUN CARE HAIR CARE HAIR COLORANTS TOILETRIES Line marks compounded annual growth rate (CAGR) of all cosmetics product exports . together they represent 64% of total exports. This section provides analysis based on these tables and provides an indication of each country's competitiveness within and outside the EU and presents overall conclusions about the trade situation in these markets.Final Report . Japan. decorative cosmetics. Spain. Comtrade Database & Global Insight. and China. The EU exports nearly four times more than they import. European Union The European Union exported €8. The balance of Japan's cosmetics product groups are more clearly threatened. World Economic Service Import/Export Statistics The tables below provide detailed import and export data for France. skin care and sun care. 126 .2 billion in 2005. When measured against this product specific growth rate. Figure 38 .6 billion worth of cosmetics products in 2005. hair colourants and toiletries. Poland. A major shift in the industry would be necessary for these products to regain their competitiveness.all countries. Japan's hair care exports appear weakly positioned. 6 Year) Source: UN. Perfumes & fragrances and Skin and Sun care products were the two largest export product groups. Each has a weak or declining comparative advantage. the United States. the United Kingdom. Import and export trade by product segments is included for these groupings: perfumes and fragrances. Italy. Revealed Comparative Advantage 0 -1 -4% -2% 0% 2% 4% 6% 8% 10% 12% Total Exports of Cosmetics (CAGR%.September 2007 year. Germany. Exports have grown at a compound annual rate of 9% over the last six years.

79 5.534 3.599 425.088 2001 7.091 4.559 844.463 860.259 2000 6.485 448.141 325.672 156. Perfumes and Fragrances.599 59.186 39.581 31.902 62.985 1.946 2.156 5.009 307.093 360.311 6.307 83.740.432 2002 2.557.087 82.635.460 80.752 593.310 1.199 4.549 172.893 211.206 22.094 2004 824.807 16.101 2.604 1.301 16.901 183.559 2003 7.042 19.66 2.898.586 50.791 113.874 2.317 53.69 5.435 69.955 119.908.946 5.890 221.484.046 375.932 2001 2.877 99.87 Source: United Nations.614 132.220.788 85.169 262.167 7.513 7.017 42.100 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 1. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 5.732 236.413.410.726 267.451 178.797 85. Decorative Cosmetics. 1999-2005.147 127.802.400 1.693 13.981 79.594 5.650.207 63.749 481.787 2.International Trade.47 Source: United Nations.393 99.177.972 15.871.649 7.105 6.174.787 1.663 908.109 2003 2.000.927 2.680 357. Comtrade Database Table 106 . All Cosmetics Products.70 6.251 85.911 45.984 107.604 8.056.572 303.295 110.400 143.195 81.320 98.634 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 300.463 4.430 5.364 44.762 1.490.525 3.900 7.640 7.431 50.603 444.467 667.508 19.719 254.335 260.833 106.September 2007 Skin and Sun Care and Toiletries represent the two largest import product groups accounting for 57% of total imports.737 623.600.493 1.241 1.976 702.864 2.501 3.673.524 46.580 2.98 2.263.934 117.216 17.752 48.377 97.478.901 83.048.379 579.219 2000 2.71 485.737 77.407 206.127 1.632.75 420.134.313 60. Comtrade Database Table 107 .399 96.791. 1999-2005.94 2.531 437.131 40.585 2.950 1.328 474.697 185.437 1.124 2002 711.813.471 101.049 443.845 916.Final Report .387 411.786 2.206 83.756 11.842 336.882 512.122.367 138.952 403.610.274.150.274 2003 752.279 1.226 87.615 96.035 114.420 1.546.International Trade.351 27.099 821.626 26.444 560.959 3.310 2005 8.995 458.71 1.291 18.663.109.601 2005 2.747 2.International Trade.921 53. 1999-2005. Comtrade Database 127 .001.31 Source: United Nations.547 718.814 177.016 2.460 88.719 3.046 932.413.829 93.332 348.546.546 383.972 78.83 2.422.732 2000 608.69 387.305 3.524.487 94.080 80.464.705 184.767 83.798 90. Table 105 .947 401.656 59.577 2005 830.601 36.735 24.183.708 2.059 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 3.266 2002 7.929 1.050 3.664.912 251.227.624 1.715 881.234 95.140 2004 2.160 228.592 264.487 226.83 5.912 21.419.384 117.01 2.493 190 686 81.070 44.241.490 4.115 125.843 10.388 280.978 266.158 441.785 375.875 434.582 90.76 5.404.838.455 2.452 953 113.447 91.279 79.541.107 2001 691.478 1.740 46.166 63.345 61.077 2.017 221.654 1.781 4.125.068 10.765 90.223 32.121 270.633 305.584 14.868 3.016 100.928 606.536 383.693 282.439 301.549 1.929 920.672 6.144 3.356 13.626 229.955 1.539.577.083 430.783.065.508 1.129 226.219 2.240 113.289 85.895 7.093 4.527 23.945 117.799 353.050 939.528 980.81 522.960.56 448.537.837 3. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 478.790 422.701 146.314 3.379 841.379 2004 8.671 354.311 25.235 400.566 9.929 790.097 1. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 1.46 4.382 28.894 50.476.084 62.578.424 320.73 494.597 3.821 18.863 32.230 426.

156 236.201 282 3.942 42.347 318.536 76. Hair Colorants.383 302.564 193.526 1.663 43.901 2002 2.833 11. Skin Care and Sun Care .469 11.238 25.626 58.035 95.178 119.111 39.714 265 437 9.062 11.77 268.494 24.907 64.60 141.802 1.556 1.521 147.231 3.462 15.427 2005 2.21 281.072 262.001 169.455.253 428.603 2004 2.800 2.016 209.805 36.044 678 1.772 46.945 4.562.850 1.575 2000 423.466 2004 372.919 18.003 72.97 1.544 63.418 13.245 2001 304.898 44.668 2.159 20.802 336.480.505 316.156 159.703 723 939 11.683 295.234 4.878 121.112 25.450 751.99 Source: United Nations.694 456 27.465 59.144 1.229 1.239 56.424 29.925 2000 228.990 159.876 183.530 58.93 1.289 86.485 129.354 1.Final Report .999 1.669 835.594 3.212 5.08 1.970 1.702 96.656 218.483.335 41.516 375.36 Source: United Nations.013 574 19.196 337.991 39.169 22.868 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 215.025 138.896 148.735 117. Comtrade Database Table 109 .327 166.939 8.107 786 591 13.121 76.835 95.72 342.986 2005 635.084 3.128.187 59.149 700 16.893 1.420 59.621 836.187 884 509 10.447 900 1.961 23.632 229.827 48.742.128 31.815 98.750.90 434. 1999-2005.244 51.750 40.036 59.053 495 1.705 268.106 2001 499.314.502 24.398.28 Source: United Nations.205 56.710 5.005 165.123.787 131.428 7.17 324.96 300.671 296.519 10.134 524 2.072 157.991 219.950 109.161 2003 352.141 170.603 51.603 2.216 2.049 52.393 74.475 20.390 60.002 1.459 5.90 1.375 168 3.91 1.260 2.885 3.157 96.405 205.084 63.822 137.999 2000 1.032 2002 555.230 64.647.239 16.858 1.International Trade.398 620 21.853 57.816 319.International Trade.476 1. 1999-2005.789 2002 356.698 10.970 55.275 40.569 392.861 13.073 2001 2.183 2003 581.888 307. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 337.40 432.159 301.039 32.187 4.846 279.996 23.757 706 1.762 1.905.84 475. Comtrade Database Table 110 .383 368.64 222.589 1.794 81.720 162.899 11.144 3.896 2.188 22.814 2.432 129.773 223.282 5. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 1. 1999-2005.572 23.471.029 8.72 271.508 2004 587.157 318.811 3.329 2.687 3. Hair Care.285 41.003 1.983 542.635 27.909 230 2.951 356.377 2.805 8.International Trade.661 95.385 155.937 270.182 2005 399.441 776.888 876 1.131 21.080 316.064 399.742 81.463 3.777 45.962 433.September 2007 Table 108 .690 359.323.754 84.440 643.283 163.453 86.453 330.620 407.781 240.619 173.020 152.67 1.639 2.123 9.256.529 555 1.447.708 99 3.573.989 113.311 88.236 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 905.555 51.170 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 115.866.580 5.923 21.272 11.167 178.819 4. Comtrade Database 128 .223.470 74.603 6.142 164.605 25.703 725.740 23.360 2003 2.997 815.073 9.348 72.418 102.316 449. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 188.331 47.687 18.731 2.17 391.557 4.432 3.061 71.764 366.

899 185.312 2.513 67.129 91.625 2001 1.884 2.478 803.873 139.September 2007 Table 111 .013 9.124 6.142 69.Final Report .735 4.368 740.128 174.844 66.701 159.764 810. € thousands Exports from EU to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 891.298 643.428 795.94 691.486 81.492 303.939 2.376 5.872 5.015 53.157 388.775 171.633 144.159 24.567 2004 1.195 48.438 92.946 4.415 524.452 135.736 22.11 763.152.International Trade.385 158. Toiletries.037 437.248 108.387 15.149 130.955 3.887 370.784 177.471 2003 1.711 6.170 107.139 132.309 4.667 137.184.656 162.982 76.909 2.777 2.971 353.915 159.044.102 87.866 69.778 146.604 113.649 408.135 783.918 3. Comtrade Database 129 .450 85.071 140.647 102.643 137.472 63.050 Imports to EU from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 588.991 84.808 2000 1.984 61.045 4.90 791.84 784.536 2005 1.628 180.151.824 69.893 134.110 430.536 2.988 2002 1.221 1.640 105.222.122 6.097 134. 1999-2005.96 780.834 141.222 131.79 Source: United Nations.222.999 134.395 11.823 2.96 775.053 159.588 6.

471 137.133.464 1.816 126. In 2005.323 115.024 601.409.254 2005 3.464.206 35.409.610 2.67 1.396 10.621 8.393.225 204. Overall.111 10.837 597.556 113.412.42 Source: United Nations.638 758.763 9.8 billion worth of sales and about four-fifths of the total value of all exports.301 249.615 2000 1.472 91.824 25.667 326.265 936.119.138 17.866.177.005 53. 1999-2005.114.967 128.801. 1999-2005.552 136.018 40.380.751 34.780 377.47 1.362 2.726 105.615 574.164 360.699 2.716 14.618 72. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 2.289 2.801.680 231.719 79.784 86.314 2003 3.273 591.265.743 15.091 3.040 11.156.362 3.903.September 2007 France French cosmetics are in high demand as evidenced by this country's position as the largest cosmetics exporter in the world.314 6.654 268.904 264 162 42.328.608 644. Perfumes and Fragrances.379 254.875 47.395 128.220 14.616 210.441 25.854 2001 3.044 2.626 239.109 44.625 1.604 21.981 48.344 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 1.005.983 976 555 45. France exports 10 times more products to the rest of the world than it imports.278 851.66 2.179 2.Final Report .203 71.429 457.360 140.363 44.403 213 31.029.27 2.802 10.053 205.500 269.259.127.016 2002 1.552 270.515 2002 3.385 18.570 9.766 313.949 1.841 4. amounting to almost €2.597.004 210 181 40.784 236.955 28.332 381.229.678 871.136 1.047 51.110 2004 1.819 20.084 26.885 45.804 14.00 1.740 129.844 908.482.956 6.829 3.265 845.578 19.761 269.795 28.772 37.126 2003 1.649 59.562 346.214 6.112 356.International Trade.902 2.337 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 2. France exported nearly equal amounts of perfumes and fragrances and skin and sun care products.622 19.254.International Trade.603 2.188 61.304 326. but fell sharply in 2005 and remain about one-tenth the size of exports in terms of value.616 26.513 328 236 4.526 34.493.910 2001 1. Table 112 . Imports to France have grown in recent years.050 21.001 24.777 15.505.821 44.854 223.873 134.799 250 33.02 Source: United Nations. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 1. over twice as large as its nearest competitor. Skin and sun care is the largest product group imported into France.98 3.397 263.504.322.90 2.049 20.436 43.541 16.248 55.531 2.11 2.002 2000 2.422 122.61 1.702 34.400.892 2005 1. All Cosmetics Products.807 268.891 28.175 271.361.967 107.294.241 6.635 16.197 577.93 2.823.745 150.646 108.757 6.831 226.909 16.53 1.123.374 38.267 304.015 113.784 954. Comtrade Database 130 .932.200 2.266 336.261 54.022 19.242 84.21 1.056 9.648 93 212 22.275 8.019 119.636 185.550 22.640 5.219 2004 3.239 95. Comtrade Database Table 113 .038 18.637 19.571 121.853 2.

728 10.532 10.326 13.265 37.691 2.626 80.393 32.104 18.599 182.83 Source: United Nations.014 43 711 110.351 2002 1. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 187.504 11.665 32.109 9.053 5.289 4.513 739.588 4.330 36.512 24.865 23.111.054 2003 225.882 2.547 3.895 7.183 6.647 40.229 14.065 100.150 12.898 34.790 12.821 206.746 106.620 2000 67.462 11.504 16.391 13.250 1. Skin Care and Sun Care .428 589.386 2005 147.849 37.International Trade.864 2.680 39.458 4.205 113.554 103.650 792 9.712 4.924 5.146 16.872 2005 1.889 66 734 121.855 120.830 36.492 1.877 2.859 177 5.26 169.275 130.714 152.Final Report .801 1.303 107.999 2001 213.403 15.597 122.127 125.820 1. Comtrade Database 131 .247 3.651 14.861 10.061 145.005 11.057 7.304 6. Decorative Cosmetics.441 2.548 144.188 34.239 8.010 20.17 265.83 875.514 30.984 22 1.285 13.662 5.400 2004 283.539 40.153 6.649 8.744 110.728 14.182 9.800 437.International Trade.087 7.604 2.400 14.19 Source: United Nations. 1999-2005.817 3.935 42 1.418 19.974 290 3.36 125.686 94.016 770 5.079 21.669 778.812 5.823 11.173 18.147 18.847 9.498 14.648 4.646 7.123.595 24.534 7.859 34.978 99 3.316 13 15 5.503 99.986 5.471 10.097.319 10.571 687 30.603 1.633 2000 956.880 17.957 5. 1999-2005.862 15.222 184.008 36.362 7.449 34.434 16.212.031 32.196.048 2001 81.725 1.106 12.387 6.804 13.865 4. Comtrade Database Table 115 .107 36.004 100 3. Hair Care.614 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 671.312 95.564 7.832 9.667 11.807 4.033 78 556 108.302 6.17 182.841 2002 217.61 243.902 31.397 4.49 55.September 2007 Table 114 .40 140.782 2004 1.727 167.010 32.349 10.517 1.090 2.467 3.88 986.854 4.703 6.564 24 2.817 32.862 7.049 7.992 4.344 34.941 86.096 6.660 130.97 73.025 135.24 191.675 99.406 12.724 47.324 528 1.550 31 439 58.97 111.523 33.307.206 103.556 55.324 94.856 156.094 13.248 2005 298.826 35 22 5.085 9. Comtrade Database Table 116 .542 5.587 103.096 866.086.010 111.403 2001 1.947 97.131 32.079 8 74 2.517 10.180 28.07 1.920 17.945 76.828 64 9 2.888 3.749 5.580 5.09 Source: United Nations.87 1.138 48.499 3.945 9.187 32.951 141.204 135.513 7. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 57.488 14.932 39.243 14.888 52.International Trade.998 5.912 2000 204.448 12.71 1.561 2004 134.096 4.38 113.010.901 6.758 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 151.169 1.372 104 3.699 1.510 2002 119.585 14.738 8. 1999-2005.006 714.113 60 2.494 35.783 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 48.025 111. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 747.903 2003 120.84 1.765 2003 1.131 113.506 6 349 73.665 2.104 14.981 20.361 8.867 692.87 178.614 7.173 5.016.

56 117.667 77.208 83.666 7.776 2005 184.459 11. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 158.034 4.358 73.11 Source: United Nations.926 3.46 61. Toiletries.766 247 4.429 116.264 1.International Trade.620 106 403 3.739 144 6.617 14.692 15.838 12.757 10.225 70.646 148 594 2.724 6. Comtrade Database 132 .345 66.648 4.738 290 9.International Trade.234 248 7.752 1.005 42 481 5.357 3.758 112.096 11.887 112.734 7.61 82.694 8.165 1.498 105 11.393 89 6.169 2.345 127.67 131.446 2004 187.495 158 7.141 1.498 2.561 24.936 36.757 2001 178.66 114.180 2003 88.586 10.115 5.920 2004 95.465 1.607 1.428 5. Comtrade Database Table 118 .184 11.165 19.751 65.741 99 417 4.617 42.758 19.550 66 597 4.427 24.260 6.537 15.243 4.547 32.386 1.39 72.300 5.851 56.403 70 791 1.453 37.712 13.738 2001 85.531 3.332 326 5.906 2.786 70.926 2.504 5.548 18.378 9.034 120.703 3.782 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 52.498 14.358 46.391 2.930 15.487 18.34 66.602 933 4.889 7. € thousands Exports from France to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 64.53 72.17 105.076 676 3.546 15.257 4.895 53.314 19.617 1.515 129.384 4.52 116.092 983 43.88 107.283 15.859 122. Hair Colorants.883 224 15.168 57.459 466 23. 1999-2005.610 115 478 2.September 2007 Table 117 .605 29.184 3.735 119 7.524 2002 186.957 16.076 22.150 15.500 2.271 2002 88.152 4.884 3.467 23.797 9.486 2000 75.805 3.606 806 1.276 1.250 50.378 5.737 2000 161.349 4.485 23.596 45.573 70.175 173 11.47 Source: United Nations.850 1.195 9.055 Imports to France from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 108.528 5.815 29.629 15.372 4.436 18.Final Report .131 372 6.287 2003 188. 1999-2005.63 91.080 2005 102.284 70.453 25.754 2.009 20.459 7.301 5.417 16.734 3.144 9.199 2.739 6.038 17.

667 300.487 111. Comtrade Database 133 .405 217 2.224 47.209 4.527 13.875 598.031 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 218.532.114 2002 487.072 688 42.333 97.317 172.718 27.089 13.166.952 4.152.115 4.578 167. Its export market has nearly doubled in size over the last six years and its strong competitive position will likely allow this trend to continue.920 11.712 2004 1.019 10.046 2.784 54. Imports to Germany.381 74.7 billion worth of cosmetics products in 2005 placing it second among all EU27 markets.September 2007 Germany Germany exported more than €1.084.018 1.734 68.215 69.611 260.453 22.513 1.058 310 5. 1999-2005. € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 268.463 77.632 220.International Trade.106 2001 1.366 5.453 245.321 3.770 12. Of all products exported in 2005.042 220. Skin and sun care products were followed by toiletries were the largest group of cosmetics to enter into Germany in 2005.557 296.087.297 377 14.984 390.420 5.280 12.321 31.970 191.222 17. perfumes and fragrances garnered the highest amount of sales in terms of total value.743 41.23 509.660 135.379 408 575 11.03 839.744 1.33 325.344 14.036 18.336 120.100 36.223 7.919 2001 394.439 10.088 2003 548.431 16.204 132.385 1.338.191 8.723 139.819 25.019 136.381 2005 1.72 1.334 209.707 1.527 10.15 461.001 28 1.18 1.955 11.572 7.110 56 510 12.392 101.292 18.69 978. € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 896.232 42.3 billion worth of sales and 72 percent of all exports.150 10.974 14.190. 1999-2005.924 365. amounted to nearly €1.322 50.Final Report .288 4.064 14 8.829 255.47 Source: United Nations.788 32.99 Source: United Nations.858 942.International Trade.419 3.379 27.705 7 111 14.76 514.578.261 115.683 52.627 130.613 4.325 166.277 164.620.724 54.260 4.953 278 280 13.221 16.812 39.243 1.626 34.556 2003 1.035 279.922 31.420 38.307 3.542 5.19 1.878 48.336 176.949 123.098 40.343 20.637 186.458 53.056 26.696 105.820 9.995 51. Comtrade Database Table 120 .668 360.565 494.478 18. though growing.42 1.860 364.851 37.012 58.111 48.065 51.103 2000 372.61 447.527 360.419 312.221 69.030 2000 1.621 46.616 83.232.626 128.576 34.390 67.687 43.96 357.817 96. Perfumes and Fragrances.860 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 600. are not increasing as fast as exports.085 26.964 3.921 2. These products.170 408.239 70.678 143.314 2002 1.626 45.423 174.517 461.371 2004 504.417 3.984 15. All Cosmetics Products.315 48. Table 119 .816 45.717.767 21.747 387.767 11.843 82. along with toiletries and skin and sun care.223.117.755 151.048 2.129.670 2005 565.769 8.371 10.085 6.458 3.401 16.539 3.019 791.

642 59.062 12.032 11.639 1.559 156.62 117.322 1.626 5.942 23.985 5.817 51.41 125. Comtrade Database Table 123 .779 11.648 70.956 226 13.308 20.807 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 31.630 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 34.876 27.378 8.958 23 1.442 6. 1999-2005.International Trade.276 9.077 147 389 69.679 112 1.82 43.677 3.453 3.595 1.392 1 489 1.37 103.177 13.193 4.315 119 10.978 1.817 69.288 20.501 16.126 26.542 4.54 Source: United Nations.234 83.561 212 11.901 13.266 38.789 2005 337.886 4.930 73.363 77.712 93.201 64.724 5.038 148.581 4.691 12.876 991 21.739 196 322 2.522 626 3.780 11. € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 158.213 5. 1999-2005.759 2003 175.537 5.895 8.530 2.597 19.534 66.573 178.163 3.013 12.279 23.125 17.78 67.048 18.193 10.781 2005 86. Hair Care.778 38.814 3.25 91.189 4.778 7.632 6.450 128 4.288 1.408 68.841 60.958 17.230 39.102 10.755 6.409 79.340 43.160 20.605 16.119 57.346 43 3.417 2000 221.17 Source: United Nations.285 342 12.983 13.898 96.931 373 29.648 211.69 70.681 49.47 65.993 8.328 43.553 16.083 35.59 Source: United Nations.658 3.726 19.514 12.003 39.767 74.684 5.758 30.815 2000 137. Skin Care and Sun Care .220 46.669 2000 56.100 5.038 532 10.608 53.59 99.488 37.September 2007 Table 121 .68 87.438 6.442 77.140 2004 174.244 71.735 6.550 19.762 12.060 69.216 178.69 123.927 14.224 3.073 88.024 1.866 431 977 64.151 59.082 264 144 3.44 122.039 2.689 2004 302.898 101.367 4.71 113.518 8.673 6.103 11.486 5.337 27.958 8.526 2.737 387 856 45.684 27.760 209.720 143.087 2002 167.752 7.158 56.841 2004 83.878 181 727 64. Comtrade Database 134 .Final Report . € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 46.977 56.858 442 3.094 1.263 4.086 2002 297.978 214.987 180 411 6.375 16.679 4.581 17.672 417 444 7.796 54.016 51.372 1.248 542 2.378 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 97.782 7.854 603 5.220 2001 165.428 126.080 99 810 69.785 166 173 2.658 1.282 1.003 230.035 4.466 18.807 214.767 2003 299.523 444 5.007 5.562 2001 83.556 76.572 3.39 64.850 2.386 13.254 10.670 30.410 1.190 13.129 18.396 7.386 1. 1999-2005.934 8.46 109.510 56.055 214.803 129. Decorative Cosmetics.027 4.047 45.050 6.International Trade.586 4.757 4.89 121.749 2001 262.049 2005 181.692 15.822 4.International Trade.556 2003 87.77 140. € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 124.952 9.901 7.488 9.644 7.175 31 422 36.38 65.685 821 16.324 42.271 60.354 22.931 4.467 2002 89.839 332 4.419 20.282 5. Comtrade Database Table 122 .084 76.114 29.113 4.372 262 13.982 12.478 48.648 6.030 27.295 38.

212 18.52 151.870 839 36.722 212.023 21.907 2004 198.86 Source: United Nations.056 19.627 2.931 12.388 261 3.257 195.381 1.117 764 31.087 16.196 15.027 22.529 19.52 Source: United Nations.742 440 36.679 135 16.680 219.752 40.000 96.749 2005 205.918 2.September 2007 Table 124 .346 10.623 503 5.103 31.052 536 28.76 212. Hair Colorants.820 18.553 569 6.904 476 6.709 13.029 2001 270.166 42.798 34.International Trade.764 2004 316.233 166 398 1.749 1.226 150.658 2.819 15. 1999-2005.719 135 146 577 2000 138.005 12.721 12.469 1.342 2005 342.450 2000 225.917 36.462 85.323 30.967 14.575 2.135 38.773 2003 208.36 215.290 24.578 10.279 157.557 77.606 10.864 695 5.919 6.387 11.316 173 560 1.754 220. Toiletries.145 8.377 2.172 43.469 19.293 12.505 3.774 154.039 68.002 27.556 18.074 90.375 37.198 13.096 6.663 19. € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 188.522 144 365 1.799 2002 188.921 5.067 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 100.544 1.505 98.207 161.12 174.658 2.119 2.35 130.154 30.595 6.579 10.750 2.373 27.035 534 9.985 9.561 71.197 2.559 40.92 172.201 8.762 2002 302.243 232 2.030 18.650 30.905 15.173 98 629 1.801 98.098 21.88 185.International Trade.866 8. Comtrade Database 135 . € thousands Exports from Germany to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 109.295 247.485 3.924 5.856 705 12.096 3.879 19.476 45.730 1.888 121.Final Report .525 13.323 41.356 677 32.798 19.52 217.383 59 389 627 2001 162.486 517 22.111 20.87 194. Comtrade Database Table 125 .946 395 8.312 5.948 Imports to Germany from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 117.402 10.66 148.804 23.937 141.326 645 6.623 9.719 119.872 8.615 41.493 1.083 2.512 3.414 8.613 2003 301.249 132.378 20.86 182.811 40.21 222.422 47.743 36.568 17. 1999-2005.889 2.731 727 13.158 15.791 3.194 4.

607 59.828 1.911 436.122 43.K. Comtrade Database 136 .070 8.874 4.453 1.349 46.894 141.70 1.13 2.180 54.849 114. All Cosmetics Products.961 80.K.495 270.924 186.575 153.36 1.51 1.200 77.643 1.930 79.International Trade. 1999-2005.40 Source: United Nations.55 28.135 294.905 141.183 3.810 524.279 6.397 124.670 33.990 244.046 599.544 44.135 332 32 16.165 1.234 41.358 541.659 570.707 108.330 2000 893.171 45 129 19.848 276.Final Report .056 35. The U.394 74 747 50.502 400.413 175.008 1.462 2004 977. imports to the U.246 20. exported more toiletries than any other product.318 647.230 16.International Trade.965 2.783 332.978 1.022 111.547 32.727 62.582 743.574 246.633 119.195 37.355 78.310 327. Skin and sun care products compose the largest share of imports into the U.354 192.848 102.689 63.038.062 2001 98.731 34.099 479 4.527 33.417 2002 899.668 27.941 50. In 2005.39 1. amounting to 38 percent of total export value.090 1.526 100.644 60.390 290 3.800 6.724 749 149 21.083 34.442 116.282 33.417 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 26.258 8.323 371.868 29.957 42.545 38 5.09 10.04 billion in total sales value.157 1.557 658.723 3.789 26. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 73.019 2004 109.523 578.740 44.825 303.407 365.K.558 109.858 72.K.641 606 33.038 108.K.498 40.112 64.175 16 9. Growing faster than exports.401 1.832 7.387 3.211 646.013 414.259 9.252 1.113 223.648 16.927 2000 88.642 7.080 47.745 81.875 28.83 1.337 701. the U.617 37.447 1.174 2003 916.160 163.085 1.319 2001 892.734 10.027 566.119 188 1.501 351.241 48.978 178.564 2.012 33. 1999-2005.245 70.071 1.300 70.23 13. Table 126 . exports nearly one and a half times more products to the rest of the world than it imports.637 240.161 149.285 113.267 26.237 28.766 21.575 45.642 369.494 2005 1.338 4.285 8.47 18. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 732.333 2005 123.42 1.September 2007 United Kingdom The U.09 Source: United Nations.848 2.038 36. is the 3rd largest EU cosmetics exporter in 2005 with €1.108 1. Comtrade Database Table 127 . Perfumes and Fragrances.191 2002 113.633 21 1.100 100.237 1. in terms of total value.368 138.02 9.216 63.758 20.381 18.628 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 1.036 2003 110.673 604 28.238 136 809 55.887 90.818 109.587 589. have nearly doubled in value over the last 6 years.377 357.

1999-2005.199 6.331 2.833 60.326 45.369 3 1.155 284.204 143.927 28.45 44.368 2.932 1.687 6.515 18.811 127 3. 1999-2005.020 18.919 7.834 520 3.009 32.289 2001 282.834 26.990 45.496 151.307 47.305 4.547 2005 397.102 16.473 462 2.337 70.432) 0.625 5.562 161.258 61.018 4.774 1.975 57.524) 0.382 30.895 104.597 190.455 14.951 32.643 1.197 42.323 3.134 1.534 52.781 1.003 94 5.341 149.960 2005 51. Comtrade Database 137 .090 1.729 24 760 33.400 108.859 97 1.310 207 26.904 180. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 47.425 7. 1999-2005.001 41.696 61.188 2004 112.451 1.911 2.975 2005 110.093 1.049 52.319 2.065 377 66 4.428 4.044 144.709 2003 37.748 14.513 100 316 40.522 63.653 1.621 1.968 1.579 28.245 195.096 26.530 222 1.484 2001 77.261 1.322 78.966 29.420 136.056 11.857 21.31 63.50 16.742 3.352 79 373 35.577 5.378 150.147 2000 90.429 48.200 49.884 4.180 31.701 2004 39.144 24.359 338 1.141 303 15.370 127.571) 0.952 35.789 3.600 27.482 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 16.676 14. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 216.215 10.529 17.305 103 228 34. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 55.094 1.601 45 54 4.096 2003 304.651 9.751 24.Final Report .56 67.915 32.144 202 14.963 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 2.33 15.413 4.338 20.797 2002 84.390 56.776 22.222 18. Skin Care and Sun Care.732 14.19 72.972 1.51 12.906 2000 247.239 2.503 5.028 1.291 4.89 4.397 1.321 2004 348.868 3.797 7.372 39.582 2.74 (10.050 64.37 86.530 162 23.123 12.429 94.493 3.16 (27.531 94. Comtrade Database Table 130 .896 1 569 32.365 22.673 29.865 16.667 1.623 62.100 4.639 7.950 16.065 293.International Trade.775 2.296 28.767 91.59 26.963 68. Comtrade Database Table 129 .694 6.929 216 16.456 30.500 747 22.990 1.716 50.September 2007 Table 128 .909 216 4.708 138.04 18.329 231.409 1.476 39.537 1.995 1.374 50.013 58.098 3.625 3.790 2.International Trade.648 1.456 4.35 Source: United Nations.056 16.939 112.483 86.072 31.766 1.163 6.281 16.016 3 830 42.International Trade.664 15.792 18.10 Source: United Nations.805 1.410 2001 45.424 30.399 1.692 115.463 49.366 83.836 236.200 22.459 24.173 124.745 2002 47.145 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 78.149 177.512 2000 52.350 490 155 7.828 2003 96.22 103.243 14.588 4.20 (5.010 17.95 Source: United Nations.896 66.761 2002 280.057 31.002 1.454 519 20.832 45.49 15.403 47.76 14.741 39.860 4.472 26.246 49.897 24.540 18.546 446 52 7. Hair Care.364 179.678 894 26.471 35 14.806 1.05 12. Decorative Cosmetics.645 52.041 562 132 6.044 8.962 645 145 6.326 7.304 1.721 21.

965 36.340 2003 278.477 93.933 32.08 16.530 601 3.162 7 2.145 42.101 209 231 5.International Trade.734 366 643 9.293 5.674 5. Comtrade Database 138 .284 132 66.772 3.440 8.689 78.831 390 305 10.011 49.967 25.164 52.598 6.664 1.27 7.903 49.381 13 3.159 103.351 3.574 8.931 10.970 6.544 33.773 1.267 33.755 1.643 38.484 34.359 11.199 2002 274.823 7.27 19.234 303 573 10.000 26.684 129.426 32.84 156.756 1.045 210.162 4. Toiletries.23 Source: United Nations.514 1.132 2002 98.23 19.653 6.134 52.916 1.260 48.572 70.369 2.351 55.974 2005 68.005 9.858 218 4.580 2.235 128.840 10. Comtrade Database Table 132 .059 881 58.106 67.309 4.759 548 47.11 776 1.097 6.780 2001 294.649 11 256 6.478 36.518 16.968 25.493 23.079 165 360 8.393 1.789 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 204.199 2004 290.838 3.182 30.067 2004 76.934 78.27 162.127 1.834 42.507 478 39.960 68.25 18.987 73.26 158.608 47.828 222.918 117.918 536 56.059 2005 287.295 2000 89.645 74.028 2.International Trade.920 22.315 2.611 2.755 46.01 Source: United Nations.433 761 41. Hair Colorants.410 207. 1999-2005.706 39.280 54.808 67.410 1.974 2.414 21.179 62 767 56.232 55 3.160 7.200 9.378 9.534 1.627 2003 88.093 4.995 2000 324.055 43.338 Imports to UK from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 4.245 207.149 44.September 2007 Table 131 .648 122.227 5.49 190.617 2001 94.997 222.781 3.595 1.753 17 66.270 42.175 46.550 421 438 10.352 54.34 156. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 59.764 1.Final Report .945 74.066 6.631 34.360 680 23.336 178 67.611 10.651 981 3.858 1.210 5.265 49 3.73 231. € thousands Exports from UK to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 279.774 215.920 2.632 650 42.975 164.580 34.957 51. 1999-2005.418 61.433 1.299 51 1.

Italy exports almost 7 times more cosmetics to the rest of the world than it imports.794 548.78 434.714 6.931 43.765 413.722 52.644 2003 714. Comtrade Database 139 .824 4.260 40.744 17.430 10.383 337.534 172.701 19 12.226 248.281 61.684 75.193 186.133 38.981 760 20.356 29.644 22.12 587.40 180.026 2001 251.538 8.661 14.528 6 112 6.679 23.468 15.491 48.406 22 516 3.557 23.052 205 215 4.178 4.833 133.713 42.432 46.222 14.321 204.961 11.301 938 24.771 138.672 29.240 20.496 185.561 195.International Trade.351 63.935 7. Japan or the U.297 115.333 61.026 46.258 25.794 56. perfumes and fragrances generated the largest sales value.006 140.010 40.703 3.145 6.24 564.162 2001 704.954 16. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 161.133 2004 793.236 27. The vast majority of these imports.084 2.647 24. Comtrade Database Table 134 . 1999-2005.642 154.804 55.232 212.37 745.658 16.47 325.121 117.326 53 7.September 2007 Italy Italy was the fourth largest cosmetic exporter in the EU in 2005 with €870 million in sales value.760 2.553 38. Perfumes and Fragrances.805 48.Final Report .097 133.974 67.767 6. 1999-2005. these products amounted to over €565 million worth of sales and 65 percent of all export sales value.822 6.506 3.796 7.468 18.750 127.95 Source: United Nations.189 28.120 69.140 26.962 69 24.766 139.301 808 30.333 125. All Cosmetics Products.926 85.672 6.124 116.02 279.150 70.531 13.399 2000 208.21 Source: United Nations. 80 percent.263 41. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 435.632 413.612 11.188 27.443 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 136.247 40.614 4.874 32.116 13.034 5. come from China.S.494 2005 870.986 43.932 429.210 487.367 19.706 375 9.324 1.351 22.598 6.271 6. Overall.154 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 320.551 5.267 124.52 222.966 55.883 19.352 16.563 2002 245.320 12.097 2004 303. Of all products exported in 2005.454 196.027 38.448 132 19.970 7.197 5.408 4.03 565.574 10 726 5.546 2002 702.449 68.268 29. Skin and sun care products were the largest group of cosmetics to enter into Italy in 2005 followed by toiletries.656 13.179 38. imports to Italy are growing though they are not increasing as fast as exports.168 42 249 2.875 444 15. The size of its export market has doubled over the last six years and its strong competitive position will likely allow this upward trend to continue.518 2000 568.78 224.641 19 89 2.514 6. Along with skin and sun care.575 30 233 1.87 220.585 15.241 58.980 137.681 59.449 14.548 5.258 4.696 2005 352.534 4.124 30.253 25.463 51.372 16.International Trade.583 19. Table 133 .586 18.62 668.600 54.963 16.082 2003 245.306 5.785 10.902 24.

720 128.076 8. 1999-2005.224 17.217 7.954 3.820 18.600 2000 150.591 516 9.881 2.61 85.08 48.313 6.633 7.951 50 26 59 2000 14.018 8.906 874 529 39 464 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 10.331 4.817 52.501 120 1.079 14.266 914 19.015 6.987 453 1.96 64. Decorative Cosmetics.310 2004 79.932 266 3.243 148.009 2.593 15.878 75 2.258 25.September 2007 Table 135 .524 2.186 13.513 10.642 1.386 87 10.036 9.115 988 269 1.689 2.793 2.466 2003 72.729 26.388 2.425 18.416 2000 56.178 76.821 10.098 573 430 13 23 59 2005 34.516 8.112 2.530 64.767 4 390 22.425 4.474 549 2.144 1.272 5. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 116.166 49.423 6.272 15.96 64.351 3.International Trade.937 9.703 2003 181.279 33.703 13.915 4.822 14.551 1.809 68.614 1.725 34.346 646 1.527 7.390 14 15 93 2001 30.619 15.631 6.885 2.823 33.307 373 1.902 35.10 151. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 13.225 5.434 100.822 32.87 163.277 10.166 569 16.016 6.669 38 1.677 16.089 3.003 7.183 41.399 11.740 2005 213.85 18.210 209 6.726 7.34 84.577 1.210 7.742 3. Hair Care.01 60.168 2.76 31.374 862 1.685 4.122 2001 72.091 44.781 6.245 2.908 32.078 17.017 32. Comtrade Database 140 .69 123.250 5.806 5.11 57.059 5.970 973 11.474 7.825 1.43 12.989 14.906 2001 174. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 31.046 6. 1999-2005.067 1.558 1.863 29.56 108.456 1.649 2004 203.777 34.892 3.284 35.797 635 3.487 16.193 2.730 25.633 2.714 2.363 3.015 930 1.559 1 257 12.525 4.576 4.382 1.760 41.938 6.756 2.256 7.677 2002 173.17 Source: United Nations.471 933 1.664 140.013 9.949 36.739 12.Final Report .896 2.989 58.260 6.296 2005 100.951 43 191 24.768 4.888 2.821 2.059 29.092 5. Comtrade Database Table 136 . Comtrade Database Table 137 .234 423 985 2002 74.072 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 23.893 7 151 16.037 2.International Trade.757 985 16.625 21 124 155 2003 37.921 935 10.179 39.121 16.526 2.573 2.285 24.793 13.159 40.072 118.179 24.902 5.157 46.706 253 10.618 1.33 106.840 13.366 24.364 2.188 11.300 1.501 98 2.381 16.12 Source: United Nations.285 9 1.844 3.051 5.774 120.994 16.046 1.618 8.233 281 4.803 41 4 86 2002 30.80 18.213 66 72 183 2004 34.International Trade.806 4.358 666 9.703 12.939 2. 1999-2005.625 12.806 2.079 22.32 Source: United Nations.201 3.842 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 71. Skin Care and Sun Care.23 27.08 27.209 23.732 64.712 1 63 12.859 13.658 11.679 1.520 427 7.

888 14.90 79.143 54 1.866 8.370 4.370 6.185 71 1.946 7.27 79.131 170 543 53.819 26.614 15.913 240 945 3.616 30 668 40.416 9.325 7.33 53.643 23.437 62.453 25.38 86.International Trade.370 39 367 33.78 71.282 26.666 113 1.584 76 1.997 17.287 412 4.845 9.71 74.817 10.130 7.831 2003 88.833 345 620 70.348 51.072 315 5.96 53.718 62.851 3. 1999-2005.978 5 42 1.023 17.392 6.301 2005 98.129 3.International Trade.060 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 45.863 15.600 8.402 2005 71.776 112 1.985 780 9.193 224 740 65.977 9.829 9.587 1.475 2.704 13 80 408 2003 89.891 21.002 10.019 8. Comtrade Database Table 139 .283 3.088 978 278 6.122 9.403 8.512 5.115 139 18 291 2000 62.771 772 9.707 2001 90.614 17 134 234 2002 90.344 4 15 308 2001 85.925 3.049 3.357 687 8.002 2002 87.471 11.025 4.558 3.97 64. 1999-2005.596 2.961 4.004 679 5.247 497 4.754 2000 75.327 96 606 60.119 7. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 58.973 23.156 6. Hair Colorants.994 9.728 15.506 6. Toiletries.970 10.969 24.244 9.684 26.26 47.121 62 1.947 3.Final Report .016 2.995 6.214 22.219 716 4.272 Imports to Italy from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 33.91 Source: United Nations.408 2004 77.856 14.113 65.77 53.September 2007 Table 138 .80 92.707 311 4.525 784 8.805 6.096 41 116 488 2004 94.949 9.746 3.027 263 568 57.686 2.823 13.454 892 8.305 23.551 10.46 68.463 9.596 8.749 4.587 52.768 8.570 2.903 7.268 10.723 25.165 159 119 1.489 33.88 Source: United Nations. Comtrade Database 141 .290 113 7.411 9.058 5.736 11.902 8.020 55. € thousands Exports from Italy to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 54.956 62 1.096 4.

International Trade.85 433.509 150. followed by hair colorants.511 96.710 12.785 2.569 8 687 2000 118.085 7.479 6.039 16.716 60 5 1.049 331.583 6.271 48. exports have grown.720 711 8.511 2001 319.624 159.364 81.009 11 1.266 12.777 9.188 144.352 2002 167. Comtrade Database Table 141 .76 280.874 11.937 40.036 375.191 2.178 3 6 4.027 15.387 15.503 13.227 231.981 281 9. Perfumes and Fragrances.776 2005 532.223 9.333 108.738 86.047 4.940 85.476 49 868 58.712 3.513 3.134 44.44 364.463 14.032 4.857 18.668 1.105 13.265 35 1 2.723 2000 269. Skin care and sun care products compose the largest share of imports.7% compound annual growth rate of exports.514 16.165 17. All Cosmetics Products.891 1.955 9.746 3.792 9. 1999-2005.340 15. € thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 211.805 59.September 2007 Spain Spain's cosmetics market is currently the 5th largest in Europe and its strong comparative advantage position should allow for continued growth.497 3 24 6.009 857 4.034 7.009 1.194 74. Imports have grown over the last several years at around 6% annually. € thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 91.72 Source: United Nations.Final Report .824 5.818 100.380 54.064 6.812 19.921 2. 1999-2005.711 4.884 260 1.671 2.920 45 17 1. Table 140 .206 3.522 6.236 8.866 15.341 52.27 149.844 54.011 19.International Trade.082 9.877 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 142.665 16.872 71.738 8.800 28.356 9.479 3. Comtrade Database 142 .790 2.06 164.967 2003 156.706 84 2.112 632 11.031 15.083 94.23 286.56 234.224 11.814 5.667 2004 458.583 85.764 6.533 2002 367.356 6.160 4.471 6.259 9.890 9.659 9.815 257. Spain exports more than five times more than they import.116 2003 369.691 65.458 109 1 4.354 83.341 4.615 11.629 4.678 128.990 2004 216.690 5. In 2005.025 13.430 193.005 40.751 11.605 450 2.581 2001 140.940 69.782 12.16 121.315 7.858 77.007 3.477 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 79.322 42.067 2.828 8.10 225.082 7. Over the last 6 years. paltry compared to the 16.214 9.051 2.008 65.913 12.736 7.377 7.550 12.648 98.126 2005 241. the largest product group exported by Spain was perfumes and fragrances in the amount of €241 million.568 14.79 102.025 550 11.666 189 2.470 505 6.094 38.426 5.638 6.205 105.45 139.020 265.327 44.35 197.786 108.998 1.39 Source: United Nations. Toiletries were also exported in large quantities of almost €110 million.770 34.936 16.

615 18 3.448 23.034 2.325 42.061 1. € thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 41.12 (3.250 613 7.297 5.710 3.384 20.880 35 2.776 6.213 467 2.750 520 1.167 2.489 27 1.163 1.754 56 1.915 760 4.584) 0.542 1.321 2.626 6.521 186 1.414 2004 84.518 6.308 2004 8.607 48.43 23.285 4.053 3.118 2005 92.344 158 556 32.646 9 1.659 44.94 7.30 5.479 1.289 38.September 2007 Table 142 .722 69 1.127 4.448 806 2.210 1 16 70 2002 9.02 (2.766 74. Skin Care and Sun Care.777 4.090 150 858 3 79 2001 6.717 9.240 12 58 4.472 5.131 279 96 631 2001 5.77 Source: United Nations.080 16.309 33.International Trade.152 2002 67.679 128 308 7 268 5.67 173 1.361 7 2.908 18.457 4.255 1.535 19 1.942 347 673 42.160 5.965 7. € thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 6.182 11.387 442 349 4 15 5.767 2.885 13 1.034 1.09 8.679 7.274 5 2.662) 0.678 62.320 1.239 1.578 1.87 51. 1999-2005.627 2.923 540 6.644 234 895 2005 8.064 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 12.342 1. Hair Care. Decorative Cosmetics.151 7 5.192 125 191 7.968 91 788 4 84 8.004 833 14 65 92 2004 13.294) 0.International Trade.609 720 2.40 24.72 Source: United Nations.644 3.446 4.302 4 1.458 39 21 78 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 5.Final Report .870 1.312 1. Comtrade Database Table 144 .818 5. 1999-2005.417 563 5.74 17.86 5.721 50 911 33 692 8.822 514 33 780 2002 8.541 35 1.912 12 4.03 Source: United Nations.786 622 11.961 26 6.12 13.690 10.190 11.88 965 1.860 3.60 (734) 0.475 28.699 17.International Trade. 1999-2005.016 646 6.795 774 5.538 7.019 67 268 2003 9.361 2003 72.592 3.57 33.957 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio (2.217 411 657 2003 6.722 6.609 1.436 42.147 6.126 8. Comtrade Database 143 .307 76 13.919 4.075) 0.453 2.496 10.759 1.147 3.000 8.68 10.552 673 751 128 2000 6.671 16. Comtrade Database Table 143 .503 3 44 2.429 61 1 815 2000 4.019 2000 54.952 565 2.249 1.182 3.248 1.125 1.129 4.215 4.588 12.920 2.085 43.936 4 7 322 2005 17.273 3.121 11 4 6.514 57 1.610 16.68 (3.359 31.773 2.711 7.430 12 539 157 5.132 5.904 22.890 30.478 3.246 3.168 19.331 2001 59.722 1.961 8.098 3.888 24 3.189 2. € thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 5.55 61.595 8.967 1.933 2.369 1.847 3.

€ thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 54.017 5.189 162 3.023 1. 1999-2005.427 49 5.469 20.658 2003 82.459 3.607 10.243 8.376 16 22 2001 28.996 3.039 40 6.311 16. Toiletries.85 71.723 7.205 83 2.934 78 5.330 373 1.955 13.095 24.218 24 136 2004 48.948 507 5.258 24.65 33.739 4 81 4.332 7.77 12.951 74.845 549 6.78 92.07 36.221 1.449 11.886 56 588 9.353 3.03 Source: United Nations.315 81.September 2007 Table 145 .816 2.469 6.581 60 6.119 1.263 5.563 192 5.029 555 5.936 23.227 1.International Trade.40 71.150 5.855 409 52 3.941 4.349 5 24 2002 36.968 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 42.065 39.584 2.822 1.96 23.308 7.324 13.56 23. Comtrade Database 144 .537 4.534 4.110 7.723 184 7.145 484 4.225 6.453 2.332 Imports to Spain from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 5.International Trade.078 10 7.119 5.711 7.Final Report .748 179 834 70.553 2.758 394 6.204 48 16. 1999-2005.002 4.29 30.138 2.721 2.068 6.83 68.257 5.055 15.243 7.690 1.27 42.109 8.564 41.787 11.173 89 5.759 77 24 840 2005 64.178 4.727 2004 86.947 62.554 547 85 3.015 242 8.468 696 1.618 72 2.646 9.307 4.273 21.57 68.294 26 1.028 601 5.498 194 4.190 7.652 6.750 50 13.813 78 270 67.731 678 36.526 30.500 87 6.499 7.906 93 2000 19.934 77 4.210 4.496 1.528 2.52 Source: United Nations. Comtrade Database Table 146 .867 2001 78.668 1 2.961 383 1.853 14.155 2002 78.475 2005 109.200 3.981 2000 65.787 5.640 3.429 1.426 47 5.009 47.206 40. € thousands Exports from Spain to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 12.622 28 206 2003 41.005 149 3. Hair Colorants.820 7.

585 2005 352.862 5. Total imports to Poland are growing.329 115.581 53 1.261 4.Final Report .309 57 834 418 2002 17.. The majority of these imports.117 154 808 55 99 2000 5.759 10.240 288 940 24 3 984 2005 57. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 1.233 1.545 1.415 302.155 100 1.73 53.131 25.342 37.789 2. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 86.29 3. 1999-2005.762 81. come from outside China.341 2.42 4.712 2001 120.10 9.381 2.528 1.820 4.466 27. Toiletries were the largest group of cosmetics to enter into Poland in 2005.943 265.406 2.474 84.415 13.469 2003 174.S.941 137.238 16.822 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 2.715 701 21.894 3.589 3.296 2.862 1.384 12.018 13.339 588 2.725 9.93 3.722 1.92 4.60 24.International Trade.541 105. the skin and sun care group generated the largest sales value.401 5.026 2004 272.833 1.241 2. All Cosmetics Products.799 1.820 148.385 12 268 0 0 57.496 212 3 1.553 883 788 10.892 27.046 13.663 939 49 531 359 2004 37. the U.052 168.529 3.478 11 127 37. Comtrade Database 145 .223 2.516 384 25.235 8.048 2002 155.831 168 25. Poland was one of the fastest growing cosmetic suppliers in the world during this time period.150 145 483 521 2001 10.770 2000 109.68 6. 51 percent.648 183 21.143 56.581 29.188 1.05 16.254 231.470 1.712 5.578 49. Table 147 .435 4. The size of its export market has grown by an astonishing 400% over the last six years and its strong competitive position will likely allow this upward trend to continue.97 3.160 2.640 3.468 4. Of all products exported in 2005.52 35.287 2. almost doubling over the last six years. and Norway.67 7.036 116.021 627 23. amounting to €101 million worth of sales and accounted for 29 percent of all export sales value.104 84.545 10.International Trade.456 36.072 8.105 4.September 2007 Poland Poland was the eighth largest cosmetic exporter in the EU in 2005 with €352 million in sales value.171 9.399 461 183 13. Perfumes and Fragrances. Switzerland.968 99 111 344.22 Source: United Nations.027 40. Comtrade Database Table 148 .740 3.058 3.039 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 464 1.385 4.857 39.13 Source: United Nations.412 132 533 747 2003 25.335 10. Japan. 1999-2005.796 74 17.

524 223 314 28.589 1.987 3.943 555 2.77 Source: United Nations.590 1.050 682 1.548 5.485 84 257 121 11 4.920 7. Comtrade Database Table 150 .731 2.547 2.840 459 5.280 1.01 9.720 933 890 125 772 2003 16.857 2005 101.715 2.708 15.599 184 183 1. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 28.214 203 49 325 2000 10.814 400 94 18.585 4.250 499 148 16.674 2.31 49.405 2004 25.752 2.546 64 1.234 595 1.083 1.576 1.275 802 168 1.13 55. Skin Care and Sun Care.585 1.287 2.412 8.250 6.449 588 119 1.569 6. Comtrade Database 146 .447 24. Comtrade Database Table 151 .570 1.417 10.176 3.869 10.615 111 419 1.216 2003 18.Final Report .603 6.International Trade.011 2005 29.053 2.529 41.61 25.721 2004 79.243 11.632 213 594 1.807 54 28.International Trade.495 368 259 1.037 827 168 451 2004 42. 1999-2005.58 19.781 2000 15.069 242 533 1.766 2003 55.869 1.179 11 527 6 64 60.096 1.091 13.415 3.285 109 34.988 5.199 3.653 11.547 3.309 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 25.056 160 539 2.15 92.373 5.547 1.388 2000 34.77 13.041 12.470 6.676 6. 1999-2005.391 2005 61. 1999-2005.417 1.494 11.883 7.07 Source: United Nations.863 9.015 342 15.664 7.683 800 6.755 3.924 3.380 2002 17.595 98 124 18.126 1.925 928 861 64 72 2002 15.148 1. Hair Care.526 247 1.18 10.897 1.662 5. Decorative Cosmetics.International Trade.September 2007 Table 149 .562 14.488 7.229 11.81 9.65 13.57 12.571 5.589 189 894 2.615 209 5.65 Source: United Nations. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 7.878 2001 27.408 52.370 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 49 1.357 2001 18.625 5.549 1.29 38.708 2.267 8.638 7.860 280 246 14 11 3.766 76.619 674 86 859 2001 14. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 10.208 2.319 5.80 38.79 31.775 139 1.634 1.519 303 6.732 891 165 2.22 12.792 1.769 3.562 1.249 91 45 97.920 2002 44.35 20.480 6.337 2.147 429 132 24.71 12.018 36 212 41.491 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 8.049 3.84 73.

616 538 1.433 1.726 2.760 2.545 703 320 28.287 904 45. Comtrade Database 147 .823 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 13.634 2002 13.520 1.94 17.191 4.International Trade.47 11.11 25.96 Source: United Nations.813 1.507 233 1.961 2.85 8.84 27.76 48. Toiletries.661 2.290 1 2 71.366 4. 1999-2005.468 86 9.449 6. 1999-2005. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 9.09 Source: United Nations.60 9.873 1.534 2.161 9. Comtrade Database Table 153 .555 828 42.507 48 620 27.84 26.244 1.745 2.383 20.727 19.795 2.740 4.191 2.694 2.646 923 10 13.567 191 7.078 2001 10.288 13.830 2.886 2.403 6.24 23.359 56.884 5.216 91 495 1.383 Imports to Poland from Outside the EU Switzerland and Norway US China Japan Rest of World Trade Balance Exports less imports Export/Import ratio 7.833 2000 31. € thousands Exports from Poland to Outside the EU Switzerland and Norway US China Japan Rest of World 1999 28.International Trade.20 37.388 2004 59.677 2.912 21.720 628 347 27.525 924 212 13.458 6.492 14.389 2.164 352 38.919 2.449 41 14.679 2002 46.454 183 2.429 258 14.206 489 716 2000 11.855 412 145 4.Final Report .259 2005 73.074 1.25 20.812 18.988 355 1.217 6.306 166 11.06 12. Hair Colorants.122 53 452 1.955 7.632 4.552 2.September 2007 Table 152 .198 2003 43.445 200 11.229 4.696 4.751 2005 29.839 14.617 2004 28.515 113 9.238 4 428 39 16 1.981 24.257 121 691 44 18 1.522 2.482 12.535 646 12.068 2001 39.625 1.612 2.630 2003 14.161 1.916 170 255 31.

462 2001 770.874 NA 876 14. 1999-2005.121. Total imports to the U.507 2.999 4.238 50.254.079 NA 167.151 44.884 52.622 NA 211.769 306.394 2.51 341.S.321 NA 6.292 1.1 billion worth of sales and 30 percent of all export sales value.352 33.083.975 1.133 5.641.185 69.263 2.S.542 2004 143.719 914.007 45.945 100.996 99.518 355.977 NA 16.246 63.990 2002 759.S. Table 154.98 1.768 NA 5. Three-quarters of American exports are sent to countries other than the EU27.043 NA 763 2.413 329.20 1.671 1.878 2001 55.079 857.372 19.489 722.069 64.960 895.381.508 2005 174. Of all products exported in 2005.791 932.579.119 2.311 NA 27.September 2007 United States The cosmetics market in the United States was the largest outside of Europe and the third largest worldwide behind France and Germany in 2005 with €3.041 NA 107.265.772.824.051 NA 973 16. Perfumes and Fragrances.880 942.239 2003 806.304 904.741 3. came from the EU27.296 425.681 916.42 Source: United Nations.721 885 77. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 558.044 1. Nearly 58 percent of total imports to the U.789 2.317 46.358 43. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 48.857 1.151 2.419.816 NA 4.295 319.011 NA 16.763 33.844. All Cosmetics Products.885 658 56.023 NA 4.667 4.414 61.334 2.413 5.303 3.010.762 NA 7.52 283.94 297.8 billion in sales world wide.044.648.008 2.746.939 52.217 329.055 4. amounting to over €1.16 367.250 313.267 25. The U.409 2.067 991.246 NA 16.983 783 71. Comtrade Database 148 .522.060 NA 1.312 NA 2.736 356.110 2004 824.319 1.465 2.170 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 302.S.662 2.034 32.377.272.776 NA 510 16.796 69.006 51.Final Report .996 208.432 286.565 526.385 NA 746 19.781.International Trade.335 568 67. The size of its export market has increased by 50 percent over the last six years.207 836.191 1.069 2003 127.168 2.018 394.412 33.752 59.617 2002 73.418 1. the skin and sun care group generated the largest sales value.787 NA 69.798. in 2005.154 79.148 70.90 1.001 56.72 1.315 34.270 3.777 446.622 12.810 2.994 5.260 NA 51.50 266.099 68. grew faster than exports over the last six years.318 435.088 NA 6.667 681.94 Source: United Nations.347 2000 696.161 NA 18.480 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 1.07 1.458 1.305.274 87.386 20. 1999-2005.305 2.372 NA 665 16.390 28. Comtrade Database Table 155 .920 NA 270.279.698 101.644 40.889 2005 969.International Trade. exports almost 2 times more goods outside the EU27 than it imports from them and nearly 3 times more American exports are sold to countries outside the EU27 than are sent to it.302 63.999 73.978 NA 210.395 3.38 382. Perfumes and fragrances were the largest group of cosmetics to enter into the U.086 NA 195.512 NA 124 1.950 257.460 890.61 1.731 50.866 2000 57.863 1.

980 94.097 NA 28. Decorative Cosmetics.488 12.430 673.673 NA 3.448 2004 146.52 105.244 296.873 27.236 44.512 2000 57.065 318.589 122 NA 1. Skin Care and Sun Care .767 13.014 756 NA 962 19.International Trade.753 2.695 2003 42.764 295.664 2.048 2005 37.150 NA 2. Hair Care. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 62.896 72.358 454 NA 1.912 2.155 229.446 39.907 278.61 473.471 120 NA 3.051 58.631 5.575 NA 37.815 NA 13.128 45.729 55.681 253.12 26.572 NA 6.997 1.041 1.911 NA 1.91 Source: United Nations.468 224 NA 1.480 1.626 23 NA 2.407 110.427 17.September 2007 Table 156 .745 2003 127.528 254.269 8.223 52.599 9.607 NA 26.466 201.904 3.192 2.International Trade.309 NA 2.815 2.535 510.253 145.747 2005 176.332 345.430 2001 285.243 2002 59.062 153.158 NA 40.390 2.79 112.892 14.08 Source: United Nations.042 2.929 628.423 694 NA 611 17.57 116.347 26.484 30.417 196.262 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 146.723 25.603 NA 16.580 246.884 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 328.50 481.767 34.616 49.195 318.477 5.829 199.981 163.751 600 NA 1.172 NA 119.883 587.301 NA 50.094 28.505 264.550 157.882 NA 6.847 25.64 Source: United Nations.721 155.078 2001 115.595 21.018 NA 34.09 353.389 NA 19.091 39.424 2.401 53.501 NA 58. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 52. 1999-2005.688 1.91 185.936 6 NA 730 606 28.023 2001 67.216 3.153 310.268 2.133 NA 95.260 NA 101.107 126.113 1.Final Report .352 648.220 2002 292.224 144.137 NA 1.154 13.008 2.308 35.732 228.246 44.834 11.025 137.469 46.343 1. Comtrade Database Table 158 .079 NA 754 23.461 35.128 3.628 7.261 308.580 NA 99.139 13.665 37.611 2.147 1.43 24.355 2.82 151.49 200. Comtrade Database 149 .821 305.975 255.738 2002 100.International Trade.872 NA 6.009 284.362 190.05 33.543 115.555 2000 84.389 24.860 309.82 109.719 NA 1.275 328.201 290.472 128.554 2004 277.241 22.038 15.049 430.314 NA 61.292 2.882 12.904 158.134 117. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 176.352 302.198 4.651 5. Comtrade Database Table 157 .227 259.954 852 NA 724 25.83 98.442 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 103.726 41.205 103.188 1.697 397.463 1.530 2.167 1.85 490.265 9 NA 3.33 345.375 344.902 1.893 2. 1999-2005.791 46.549 1.135 264 NA 552 25.789 229.375 198.760 161.094 NA 7.972 2005 333.973 87.770 34.745 60.907 11.327 NA 8.223 2004 37.797 10.124 31. 1999-2005.639 17.553 1.702 42 NA 1.360 38.651 33.509 31.036 17.832 1.807 2.075 230 NA 5.406 2000 279.716 30.354 26.915 2.289 157.97 385.359 49.375 543.820 24.460 2003 283.667 NA 128.477 22.08 13.

148 2005 94.392 640.623 2.20 461.406 5.015 2.081 6.430 98.942 2002 136.481 NA 37.216 5.137 2001 149.959 13.744 NA 4.503 105.145 137.940 128.813 2000 130.116 569.697 2004 80.828 130.676 3.870 3.468 2005 154.169 2.40 174.276 8.356 359 NA 1.421 4.282 48.012 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 175.769 NA 28.466 2.385 NA 8.767 216 NA 485 6.139 70. 1999-2005.36 244.040 6.386 16.065 111.76 174.Final Report .131 272.346 3.464 8.01 Source: United Nations. Comtrade Database 150 .620 273.344 NA 3.310 8.286 5.916 2.645 2004 139.031 231.566 189.009 75.378 2.824 NA 11.630 37.269 86.891 NA 45. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 141.629 105.384 42.591 2.275 2003 77.15 338.710 193.368 230. Comtrade Database Table 160 .15 135.546 101 NA 309 5.640 NA 49.509 1. Toiletries.International Trade.114 6.916 2001 95.354 478 NA 1.367 13 NA 1.324 2.536 64.524 4.865 520 NA 953 26.566 107.740 71.646 2.172 2. € thousands Exports from USA to EU-27 Switzerland and Norway US China Japan Rest of World 1999 77.193 2000 86.378 152.203 84.International Trade. Hair Colorants.41 393.943 47 NA 1.889 73.495 71. 1999-2005.801 584.293 45 NA 1.547 NA 17.733 2.907 752 NA 644 16.193 560.84 Source: United Nations.302 101.276 438 NA 2.433 277.741 2.709 Imports to USA from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 249.082 7.769 376 NA 874 37.446 7.705 2.419 66.557 477 NA 818 20.885 3.210 8.362 282.490 264.980 2.421 407.569 91.73 161.136 2.19 361.231 2002 95.542 90.September 2007 Table 159 .00 336.340 NA 2.975 322.035 1.734 65.62 135.704 63.594 516 NA 1.938 2.368 681.355 124.502 NA 67.899 7.676 611.956 235.867 2.197 9.850 NA 5.458 422 NA 499 17.321 232.037 252.838 NA 41.558 138.725 NA 5.171 247.15 347.996 2003 147.197 31.

257 2000 33.892 343.770 4.154 6.479 19.374 171.010 20.013 19.139 2.443 2002 45.271 8. also more than quadrupling over the last six years.International Trade.577 229.050 7.64 3. Its improving competitive position will likely allow this upward trend to continue.964 NA 16.516 NA 56.79 5. amounting to €329 million worth of sales and accounted for 39 percent of all export sales value.337 NA 37.069 8. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 50 3 NA 1.943 274. Comtrade Database Table 162 .Final Report .884 NA 113 2.501 3.695 4.633 5.264 26.020 1.158 15.827 5.429 205.914 6 330 NA 15 212 2004 5.365 2 175 NA 27 124 2001 2.492 572 208.500 26.074 712 NA 819 1.952 12.305 2004 86.786 7. 59 percent.548 2001 41. Eighty-four percent of exports from China are sent outside the EU27 while the remaining 16 percent are purchased by the EU27 market.86 2.458 NA 14.264 32. The majority of these imports.304 NA 9.876 97 39. came from countries outside the EU27.740 1.847 1.741 NA 46.791 86 20.600 92 19.904 2. Skin and sun care products were the largest group of cosmetics to enter into China in 2005. Of all products exported in 2005. The size of its export market has more than quadrupled over the last six years and was one of the fastest growing cosmetic suppliers in the world during this time period.21 Source: United Nations.505 11.484 171 29.96 574.28 339.290 20.993 NA 12.665 84 83.180 2003 58.356 12 392 NA 72 121 2005 9.948 5.120 111 25.478 5.625 518 50.193 107 923 NA 124 185 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 1.September 2007 China China was the ninth largest cosmetic exporter in the world in 2005 with €836 million in sales value.55 Source: United Nations.477 28.151 216 NA 1. Perfumes and Fragrances.126 137 11.552 NA 34.462 5. 1999-2005.83 254.759 2005 134.727 135.114 193.114 156 59.205 88 25.178 NA 17.701 NA 47. Table 161 .569 886 NA 17 6.164 14 153 NA 42 297 2000 932 128 NA 1.970 7.958 89.72 4.421 8.319 NA 56 3. All Cosmetics Products.714 NA 66.943 1 285 NA 37 286 2003 3. Comtrade Database 151 .179 1. increasing slightly faster than exports.356 24.100 265 140.108 3 206 NA 129 97 2002 2. the toiletry group generated the largest sales value. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 9.661 NA 24.64 3.840 NA 66.161 24.663 66. China exports almost 6 times more goods outside the EU27 than it imports from them and nearly 5 times more Chinese exports are sold to countries outside the EU27 than are sent to it.729 188 206. 1999-2005.International Trade.716 NA 7.07 202.156 288.353 4.56 449.576 5.130 2.082 0 1.34 426. Total imports to China are growing.34 3.632 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 139.401 5.

054 856 387 NA 1.266 3.460 5.503 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 47.293 40.030 1.140 NA 2.704 57 9.002 9 14.484 23 13.547 11.21 Source: United Nations.036 2004 21.113 4.414 NA 7.667 59 14.449 35.64 58.612 2003 17.597 20.300 408 140.740 17.922 4.667 15 54.14 29.200 43 29.068 71 3.481 NA 5.134 2005 37.916 8. 1999-2005.634 2005 36.838 2002 13.728 4.497 57.16 32.294 4.687 NA 1.760 5.International Trade.652 2004 96 3 926 NA 1.378 NA 3.765 11.686 NA 16.122 NA 2.158 2002 15. 1999-2005.161 2000 66 76 454 NA 2.755 NA 2.217 65.337 NA 7. Hair Care.458 7.432 7.818 3.362 2003 47 19 1.626 2001 12.02 63.958 35.183 1.16 145.890 6.664 10 2.301 5. Skin Care and Sun Care .824 11.460 NA 2.108 52.119 NA 23.953 2.222 NA 2.628 24 6.084 4.963 2003 16.151 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 4.252 5.232 39. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 2.887 8 5.160 32. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 2.748 0 6.275 3.013 22 136. Decorative Cosmetics.September 2007 Table 163 .906 NA 252 2.International Trade.301 600 0 1.350 323 0 1.998 9.21 42.974 6.738 6.181 NA 2.952 NA 1.047 466 0 1.575 5.193 7.706 4.380 NA 705 2.474 NA 1. Comtrade Database Table 165 .378 1.616 7 7.700 NA 4.591 224 5 2.780 NA 349 1.761 NA 9.383 11. Comtrade Database Table 164 .799 NA 14.88 10.410 NA 21.766 42.333 138 15.875 84 34.327 2.738 2.395 NA 304 1.494 4.006 11.691 1. Comtrade Database 152 .91 10.061 26.Final Report .04 17.648 3.375 NA 3.033 NA 2.100 NA 6.673 NA 14.383 17.67 137.778 31.386 31.80 80.717 3.089 21 10.45 50.691 2.261 2002 61 49 722 NA 1.587 75 98.548 4.496 1 9.166 21.970 2001 19.484 480 0 2.865 2001 59 27 216 NA 3.897 290 58.88 Source: United Nations.79 35.502 4.732 NA 10.844 6.051 6.616 386 29.917 NA 31.475 3 5.35 35.503 5.537 10.706 14. 1999-2005.439 2005 219 2 1.29 32.427 NA 22.076 1.594 25 28.477 4.571 NA 2.International Trade.330 4.052 6 5.776 2004 24. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 756 10 203 NA 993 7.851 669 NA 1.999 4.669 34.310 NA 3.01 116.634 28.17 111.027 77 16.048 2000 12.802 72 14.184 NA 264 2.919 27.841 25.637 NA 6.22 116.829 2000 14.80 Source: United Nations.870 5 10.808 36.060 296 112.175 NA 1.889 2.393 10.638 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 8.

687 109.334 106.666 3.299 NA 30.43 11.035 294 NA 283 5.417 46 2. 1999-2005.690 2001 7.787 12 8. 1999-2005.101 4.577 NA 3.451 18 12.147 6.231 11.914 13.52 198.Final Report .849 30 8.584 527 511 NA 293 2.981 4.346 1.14 12.369 NA 41.596 987 731 NA 418 2.349 2.726 6.210 71.369 7.272 2001 195 143 NA 1.077 948 473 NA 207 2.723 17.746 22.584 2005 55 676 NA 4.557 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 75.863 9.109 19 14.334 2003 22.292 5. Toiletries.915 NA 5.377 1.844 25 3.581 189 58.207 NA 13.776 NA 2.538 4.109 65 24.896 4.808 455 87.041 5.308 9 458 NA 2.706 2002 14. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 620 14 31 NA 726 4.85 Source: United Nations.013 2.535 6.713 8.57 16.174 2000 142 40 83 NA 1.136 NA 4.653 10.91 19.975 437 NA 2.827 3.847 2005 50. Comtrade Database 153 .37 Source: United Nations.74 163.478 37 2.International Trade.673 891 469 NA 594 2.06 144.215 22 6. Hair Colorants.982 11.656 135.255 103 37.382 4.597 NA 4.International Trade.676 6. Comtrade Database Table 167 .083 NA 7.14 110.31 257.893 12.128 58 3.80 8.808 NA 2.016 97.748 2000 5.382 2002 241 206 NA 2.667 NA 3. € thousands Exports from China to EU-27 Switzerland and Norway US China Japan Rest of World 1999 2.378 6 16.148 2004 34.950 5.977 13.709 113.689 3.291 8.388 1.177 4.679 2.598 Imports to China from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 2.461 11.216 12.622 2003 131 1 478 NA 4.480 2004 142 461 NA 3.867 NA 3.117 18.700 NA 25.28 23.436 4.30 128.859 1.255 160.353 NA 24.September 2007 Table 166 .

60 -350.272 23.269 NA 180.646 142.358 24 440 149 NA 1.396 39.673 3.56 Source: United Nations.977 188.736 14.442 7.199 42.05 -36.04 -32.096 34.731 68.204 0.126 737.261 30.860 25. amounting to over €362 million worth of sales and 57 percent of all export sales value.047 0.920 69.63 -229.237 0. 1999-2005.046 2004 62.271 NA 111.170 16 NA 1.295 33.318 NA 249.55 -388.192 63.390 0.996 417.009 196.959 18.784 33.124 756.744 8.487 18.147 180.508 NA 310. Japan imports 2.613 48.899 0.6 times more cosmetics goods than they export.06 Source: United Nations.50 -397.285 3.754 NA 252.433 180.296 2003 71.145 0.152 2002 743 44 259 27 NA 1. Table 168 .582 NA 371.532 23.266 130 NA 1.International Trade.025 NA 207.028 715. Ninety percent of Japanese exports are sent to countries outside of the EU27.313 2005 334 33 295 174 NA 1.05 -28.273 438. Of all products exported in 2005.052 352 NA 1.668 2002 69. Both imports and exports have grown between 1999 and 2005 with compound annual growth rates between 6 and 7 percent. Perfumes and Fragrances.598 37 NA 1.034 2000 79.425 0.364 166.775 Imports to Japan from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio -183.691 0.261 15.870 13.135 19.076 5.541 2001 1.924 33 NA 1.067 72. All Cosmetics Products.570 157.325 10.209 752.159 0.623 3. Comtrade Database 154 .925 171 NA 1.04 -24.727 23.Final Report .172 2000 2.September 2007 Japan The cosmetics market in Japan was the smallest outside of Europe with €634 million in sales in 2005 falling between Poland and Ireland in comparative size.65 -282.431 5.078 6.404 16.05 -57.269 NA 342.378 691.53 -380.621 435. € thousands Exports from Japan to EU-27 Switzerland and Norway US China Japan Rest of World 1999 68.123 NA 249.187 2003 791 5 410 98 NA 761 186.910 401.150 433.241 2004 616 2 247 163 NA 1.091 751.254 40 1.976 462.430 NA 155.131 19.762 47.252 10.769 7.623 NA 332.541 8.330 69.023 332.244 7.812 69. Comtrade Database Table 169 . 1999-2005.073 NA 345. Forty-seven percent of Japan's imports came from the EU27.867 NA 333.568 148.05 -46.181 2005 66. € thousands Exports from Japan to EU-27 Switzerland and Norway US China Japan Rest of World 1999 121 5 343 19 NA 1.International Trade.442 3.295 613.582 273 NA 1.637 171.013 NA 172.303 Imports to Japan from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio -40.694 NA 1.531 22.187 2001 76.869 68.130 0. the skin and sun care group generated the largest sales value.347 4.354 0.402 0.218 4.604 10.195 0.016 0.124 109.

341 1. 1999-2005.744 2003 16.121 0.741 1.72 -5.731 6.81 -33.483 3.092 5.302 NA 11.516 16.951 807 42.288 17.818 NA 47.325 29.31 -44.907 5.616 NA 216.980 NA 257.International Trade.255 120 1.516 NA 17.937 241 NA 19.333 NA 91.781 5.862 126. € thousands Exports from Japan to EU-27 Switzerland and Norway US China Japan Rest of World 1999 51.173 0.228 1.812 2003 46.59 -6. 1999-2005.259 3.205 2. Decorative Cosmetics.572 2.73 -7.023 14.140 NA 20.411 0.910 7.48 99.752 758 39.61 87.397 26.371 778 39.646 94 18.434 NA 82.509 8.303 2004 15.854 2005 41.137 NA 26.100 8.873 21.315 4.792 198.001 NA 163.709 1.185 NA 33.50 140.180 147.292 2003 947 2 1.325 15.204 NA 24.03 1.466 222.95 -2.563 NA 32.35 -44.269 2004 776 11 1.100 125.851 2000 22.582 NA 16.33 79.100 NA 11.88 2. € thousands Exports from Japan to EU-27 Switzerland and Norway US China Japan Rest of World 1999 305 4 635 84 NA 11.645 0.672 1.587 NA 76.891 33.314 1.335 2.266 1.422 124.55 63.910 2005 3.578 NA 201.September 2007 Table 170 .616 NA 32.663 1.767 2.680 7.072 NA 69.172 0.343 1.082 276 NA 16.509 921 44.086 914 13.040 3.179 2001 21.599 20.687 NA 207.380 NA 79.016 29.180 1.581 NA 15.618 1.241 898 NA 1.897 100.01 -6.245 NA 53.138 Imports to Japan from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 67.480 3.695 NA 66.464 1.113 8.071 1.256 1.286 227.310 NA 81.117 5.960 3 18.173 124.907 8.329 2004 38. Comtrade Database 155 .485 1.104 65 1.334 34.970 4.452 22.958 0.403 9.721 3.615 36.International Trade.680 NA 33. Hair Care.415 135.International Trade.942 1.769 128.414 4.830 9.834 547 NA 15. Comtrade Database Table 172 .626 0.282 11 16.269 11.971 872 55.06 1.235 1.Final Report .580 715 49.201 154.709 129.544 131.654 2000 44.835 NA 53.56 96.377 299 NA 18.923 6.30 Source: United Nations.070 7.251 8 15.538 NA 45. Comtrade Database Table 171 .886 NA 27.78 Source: United Nations.681 NA 234.343 Imports to Japan from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio 4.809 126.238 183.413 2001 45.02 Source: United Nations.886 30.971 158.945 4.118 212.568 NA 9.535 2.635 NA 216.442 2002 44.267 1.599 21.861 2.765 27.825 23.081 101.739 127.694 NA 28.840 1.510 2.109 NA 34.166 15.410 870 46.550 NA 4.151 NA 37.522 1.814 1. 1999-2005.046 2002 16.836 2.601 37 13.069 0. Skin Care and Sun Care .765 1.688 2000 1.671 1.652 189.922 1.485 4.206 2.566 5 14.430 2005 14.116 4.98 -11.939 2001 690 3 1.901 3.003 0.375 Imports to Japan from EU-27 Switzerland and Norway US China Japan Rest of World Trade Balance Outside EU: Exports less imports Outside EU: Export/Import ratio -8.975 1.879 5.628 2.231 22.821 7 13.353 2.971 1. € thousands Exports from Japan to EU-27 Switzerland and Norway US China Japan Rest of World 1999 12.160 2002 776 15 1.033 8.097 16.801 0.

Final Report - September 2007

Table 173 - International Trade, Hair Colorants, 1999-2005, € thousands
Exports from Japan to
EU-27 Switzerland and Norway US China Japan Rest of World

1999
1,024 28 4,591 255 NA 44,467 38,706 66 26,318 1,219 NA 4,105

2000
1,972 102 6,331 329 NA 67,049 29,300 14 33,890 2,801 NA 9,114

2001
2,054 18 6,388 598 NA 73,007 29,670 8 27,797 3,952 NA 7,358

2002
2,197 27 8,948 718 NA 72,408 36,837 11 23,733 4,586 NA 13,100

2003
2,362 19 8,730 887 NA 60,426 33,133 46 19,500 5,622 NA 32,347

2004
1,781 33 9,728 2,665 NA 63,202 31,983 120 23,267 5,162 NA 44,196

2005
2,919 122 8,281 3,291 NA 64,272 24,434 130 19,171 8,124 NA 47,244

Imports to Japan from
EU-27 Switzerland and Norway US China Japan Rest of World

Trade Balance
Outside EU: Exports less imports Outside EU: Export/Import ratio

17,633 1.56

27,991 1.61

40,897 2.05

40,669 1.98

12,546 1.22

2,883 1.04

1,298 1.02

Source: United Nations, Comtrade Database

Table 174 - International Trade, Toiletries, 1999-2005, € thousands
Exports from Japan to
EU-27 Switzerland and Norway US China Japan Rest of World

1999
3,883 64 8,557 887 NA 27,637 169,013 1,262 109,570 17,327 NA 63,564

2000
6,769 35 10,955 1,277 NA 31,058 218,150 1,162 152,408 20,148 NA 69,000

2001
5,361 87 10,321 1,457 NA 31,713 215,451 2,746 186,118 40,166 NA 81,512

2002
4,657 67 8,222 2,091 NA 35,399 157,528 4,205 202,320 77,815 NA 93,161

2003
4,191 114 6,535 3,704 NA 31,821 153,629 2,345 177,793 119,211 NA 79,555

2004
5,117 118 7,015 2,591 NA 27,130 172,660 2,027 185,541 108,539 NA 98,477

2005
4,178 49 7,243 4,245 NA 33,018 179,693 1,801 190,695 133,482 NA 89,372

Imports to Japan from
EU-27 Switzerland and Norway US China Japan Rest of World

Trade Balance
Outside EU: Exports less imports Outside EU: Export/Import ratio

-154,577 0.19

-199,394 0.18

-266,965 0.14

-331,722 0.12

-336,730 0.11

-357,730 0.09

-370,796 0.11

Source: United Nations, Comtrade Database

156

Final Report - September 2007

V.

Conclusions and Policy Recommendations
This section of the report draws conclusions based on our analytical work. We make a number of recommendations on policy options based on the industry's identified strengths and weaknesses in the various countries as well as the opportunities and threats that the industry appears to be facing. The study found that a number of EU countries have developed a large trade surplus and a significant comparative advantage in cosmetics products. This is clear evidence that cosmetics manufacturers in these countries have, over the years, identified the most important consumer trends and have responded with new product offerings that have been successful. These companies have accomplished this task in both domestic and export markets. In the process, these companies have successfully developed strong brand recognition in a highly competitive and dynamic market place. French and German companies sustain their comparative advantage by allocating more resources to innovative activity and new product development than other countries. The result is a large number of patents and successful new product launches in each company's established markets. Smaller market countries like the Netherlands, Ireland, Belgium and Poland have found non-traditional routes to developing comparative advantage. The study found that companies in France, Germany, the U.K., Italy and Spain have been at least as successful at developing comparative advantages in cosmetic products as their counterparts in the United States. They have been more successful in this regard than firms in Japan and China. The most significant threat to the ongoing competitiveness of the industry in most EU countries is relatively low productivity combined with high unit labour costs. Simple productivity comparison across countries exposes a wide gap between EU companies and their counterparts in the U.S. and Japan. Even after making adjustments to the data and taking into account a number of important measurement issues, the productivity gap favouring firms in the U.S. and Japan is still considerable. Clearly manufacturers in these countries have pursued business strategies that have resulted in a more competitive industry. It is also likely that economic policy and the regulatory environment in these countries allows these firms sufficient flexibility to pursue these strategies. The study found that to-date manufacturing in lesser developed countries has been limited to a few firms. This may be due to government restrictions on firms to relocate. In any one country, unit labour costs are relatively inflexible so the relocation of productive resources of slow growing product segments (toiletries and hair care products) to low labour cost countries like the newer EU member countries and China would have industry as well as social benefits. This study has found that the impact of counterfeits on industry revenues and profits is significant in the EU. Counterfeits are generally replicas of high-end brand name decorative cosmetics and fragrances. Successful branding is a key factor in the development of comparative advantage and counterfeits can pose a serious threat to brand loyalty. Counterfeits also reduce the return to R&D consequently the impact will

157

Final Report - September 2007

be shouldered primarily by firms in France and Germany, where R&D expenditures are the highest. Efforts should be considered to coordinate the enforcement of anticounterfeiting laws across the EU countries. In general, EU companies have had little success in penetrating the market in Japan and China. Regulatory barriers may have been an issue for EU firms in the past, however, the study found that the accessibility of the Japanese cosmetics market has greatly improved since it was deregulated. Deregulation included the abolition of pre-market approval, the establishment of a prohibited ingredient list similar to the EU and the abolition of the designated ingredient list. Channels of distribution are similar across EU countries and the U.S., however, they operated quite differently in Japan and this is likely formed the most significant trade barrier. Our study found that the retail sector in Japan underwent considerable changes in the recession years of the 1990s which eliminated some of the inefficient practices. The retail sector is now more comparable to retail sectors in Europe and North America. EU firms are now much more likely to be successful exporting into Japan's large market. Larger companies have acquired strategic assets in fast growing markets like China or in large markets with low barriers to entry like the United States. The acquired firm often is a SME that has brought an innovative product to market. Large companies have begun early stage production in less mature markets to not only reduce production and transportation costs, but also to better understand cultural differences and their impacts on evolving consumer preferences. Policy considerations may also involve information sharing / education on the evolution of the industry and consumer preferences with SMEs – assuming large companies conduct this research internally. This type of initiative may assist the development of SMEs and their business strategy formation. There are a large number of new natural / organic products brought to market by SMEs. France, Italy, and Spain have a high concentration of SMEs in their markets. Large companies are acquiring SMEs that have successfully introduced products into the fast growing market segments.

158

lotions. glosses. eyeliners (pencils). anti-blackhead creams.). etc.6 Moisturized tissues forming part of a perfume product line 1. loose and compact powders.5 Baby care products (only creams. sun care sticks.4) 3.) 2. perfumes 1.1 Facial makeup products (foundation. anti-wrinkle and anti-aging creams for men and women. protection. SKIN CARE (men.3 Eau de cologne. mixed products for hands and nails. skin-whitening products.1 Sun care products (with or without sun.) V. foams. DECORATIVE COSMETICS 2. etc.5 Pre. etc. masks. “hardener”.2 Lip products (lipsticks.1 Extracts. NOT soaps.7 Boxed sets (mainly alcoholic perfumes) II. exfoliation. SUN CARE 4.2 Eau de parfum.1 Face care products 3. eau de cologne.and aftershave lotions (not aftershave balms and creams . Appendix I.) 2. pencils.4 Eye products (eye-care lotions. shampoos. NOT false eyelashes) 2.3 Nail products (nail varnish and nail varnish removers. lip protection and non-coloured foundation. night creams.11 Day creams.see 3. sun care) 3.2 Face cleansers and after cleansers (toners). PERFUMES AND FRAGRANCES (women. unisex and children) 1.6 Boxed sets (mainly skin care products) IV. 3. makeup removers. etc.) 3. products for eyelashes (mascara etc. before or after sun. blusher. women and babies) 3. etc. slimming creams and lotions.see 2. parfum de toilette (unisex) 1.3 Hand care products (including hand creams.12) 1.4 Eau de toilette for children 1. anti-skin discoloration cosmetics. NOT artificial nails) 2. men.Final Report . treatment series. foundation. (NOT eye makeup removers . and milks. HAIR CARE 159 .September 2007 VI.12 Aftershave balms and creams 3. NOT sport massage products) 3. eau de toilette. eau de toilette for men 1.5 Boxed sets (mainly decorative cosmetics) III. eye makeup and eye makeup removers.4 Body creams and lotions (firming creams. sun blocks. baby sun care products. eau de lavande.

02 Soaps and syndets.) 5. etc.4 Hair sprays 5.3 Hair lotions (daily & special treatments) and hair tonics (also alcoholic) 5. gels.4 Products for intimate hygiene (deodorants.9 Boxed sets (containing different toiletries) 160 .see 7.) 7. etc. wash lotions. talcum powders. bath oils. TOILETRIES 7. detergents. powders. creams. salts.2 Shaving products (foams.7 Depilatories (including post-depilatory creams) 7.13 Other dental products which are in contact with the mouth (sprays etc.1 Oral hygiene 7.1 Shampoos (including two-in-one (shampoo/conditioner) and hair and body shampoos. 5.52) 5.3 Talcum powders (including baby powders. two-in-one (for body) 7.8 Other Hair Care products (treatments.12 Mouth washes (before and after brushing) 7. HAIR COLORANTS 6.52 Shower gels. 7.6 Hair creams.9 Boxed sets (mainly Hair Care products) VI.51 Bath foams.Final Report . soaps) 7.2 Hair conditioners 5. etc.) 7. sticks) 7.6 Deodorants and antiperspirants (roll-ons.) 7.5 Setting lotions and setting mousses 5. 7.0 Toilet soaps and syndets. brillantine. masks. sprays. hair gels.7 Perms 5. including dermatological soaps (syndets). NOT shower gels . etc. bleaches VII.5 Bath and shower products 7. sprays. creams. bath and shower gels. etc.September 2007 5. gels.1 Hair dyes.8 Foot care (salts. colouring shampoos. wash lotions (liquid) 7. creams. baby soaps.11 Toothpastes 7. baby shampoos.01 Soaps and syndets (non-liquid) 7. treatments) 7. etc.

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