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L’Oréal poised for continued success in $43.6 billion make-up market, says MarketLine
The global make-up market reached a value of just over $43.6 billion in 2015, representing a compound annual growth rate of 4.4% from 2011, with the US eclipsing the whole of Europe and commanding 27% of total market revenues, according to research company MarketLine.
MarketLine’s latest report finds that French cosmetics powerhouse L’Oréal retains a healthy lead over its nearest competitor, Estée Lauder Companies, thanks largely to its status as market leader in the mature markets of North America and Europe.
Nicholas Wyatt, Analyst for MarketLine, explains: “L’Oréal’s portfolio of brands allows it to successfully implement market segmentation strategies not only along the lines of product benefits, but also in terms of target demographic by income bracket. L’Oréal boasts a portfolio of well-known global make-up brands and each one allows the company to target different consumer types. The eponymous brand is a mass-market, low- to mid-price label, in the same bracket as its Maybelline brand.
“Brands such as Shu Uemura and Lancôme, however, are aimed at higher income consumers, and are considerably more expensive. While they offer high-quality products, they exclude customers with lower budgets. L’Oréal products sell well as they offer a wide range of benefits, such as anti-aging and skin repair, at more affordable prices. While various rivals offer similar levels of quality and affordability, the fact that L’Oréal accounts for over 20% of the global market confirms the strength of its brands.”
In Asia, L’Oréal has overtaken local players Shiseido and Kao to become the number one brand, propelled by a share of over 31% in China.
Many Asian economies are seeing strong growth and, as a result, swelling middle classes. This provides a wave of potential customers for the higher-level brands, while lower-income consumers can still be captured by the L’Oréal and Maybelline brands.
Wyatt continues: “This strength is not only relevant to emerging economies but also to more mature ones. With consumers in traditional markets becoming increasingly price-conscious, the pricing of L’Oréal’s mass-market brands means it can continue to thrive despite the threat of private labels like Superdrug’s Zoella Beauty line.
MarketLine expects very healthy growth in the global cosmetics industry towards 2020 and believes L’Oréal is well-placed to grow further, perhaps even strengthening its market share.
– Comments provided by Nicholas Wyatt, Analyst for MarketLine.
– Information based on MarketLine’s report: MakeUp Global Industry Guide_2016.
– All information correct at time of publication and prepared under MarketLine’s established methodology.
For more information
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