BW Confidential - Issue #2 - May/June 2010 - (Page 10)

Take note Market trends & indicators A snapshot of the latest market facts, figures and trends credit: stock.xchng Market segments Ethnic-specific health and beauty products in the US saw sales increase in the mid-single digits in 2009 to reach $3bn, according to a new study by Packaged Facts. The market is expected to return to double-digit growth as the economy recovers. Given the size of the market, the report says that there is now less advantage for ethnic beauty companies, particularly small players, to restrict themselves to a niche positioning, and advises they take a multicultural approach. Some companies have gone beyond typical products, such as hair relaxers, to offer dark make-up tints and heavy moisturizers as well as premium items sold through prestige outlets. However, sell-through in prestige and TV home-shopping channels is still small in relation to its potential. In 2010, African-Americans, Asians and Hispanics, will account for over a third of the US population and as of 2013, their spending power will have surpassed $4.2 trillion. Natural personal-care products saw a cumulative annual growth rate of 15% over the past five years, according to a study by Kline & Co. In 2009 the global natural beauty market saw sales of $17.5bn. Asia is the biggest market with a 40% share due to wide distribution in mass and the inclusion of herbal and Ayurvedic products, while Brazil is seeing the fastest growth rate in natural products—sales last year increased by more than 15%. However, while the market is driven by wider availability, more affordable products and growing consumer awareness, Kline says some 75% of products in this category are more naturally inspired than really natural and contain synthetics. The sector is expected to see overall growth of 12% between now and 2014. Consumer habits Social shopping sites are attracting more younger and affluent consumers, says a new study by Unity Marketing. The report states that one in three affluents surveyed (those with an average income of $239,300) have visited a social shopping site in the past three months and that these sites are most popular among consumers under 45. Some 43% of young affluents use social shopping sites compared with 33% of affluents as a whole. Many of the social shopping sites encourage users to find the latest deals on luxury items that are available for a limited time only. Unity Marketing president Pam Danziger says young wealthy consumers are attracted by the “thrill of the hunt, the challenge of visiting until the perfect item is found and the satisfaction of landing a deal.” Popular social shopping sites mentioned in the report include, and RueLaLa. How do consumers use the internet to find out information on new products and where to shop? According to a recent study by US-based consultancy WSL Strategic Retail, Google still comes out on top. The study found that: • 6 out of 10 consumers use Google to find information on products • Product websites rank number two in terms of finding information and have become as important as dialing a friend; while retail store websites rank fourth • 16% of consumers use social media, such as Facebook and Twitter to find out about what’s new • Social media is considered more reliable than sales associates in-store and less biased than brand information • 20% of women bought beauty after checking out products through social media 10 May-June 2010 - N°2 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #2 - May/June 2010

- Brand and retail news recap
Take note
- Market facts, figures and trends
The latest fragrance, skincare and make-up launches
Best of BW
- Market highlights
- Clarins Fragrance Group president Joël Palix
Insight : skincare
- Category overview
- Industry viewpoint
- Trends
- Training in spas
- Spa case studies
Market watch : Asia
- Regional analysis
- Japan
- China
- South Korea
Focus : Fragrance creation
- Fragrance regulations
- Perfumer roundtable
- Six up-and-coming beauty brands
Travel retail
- Asia regional roundup
- Interview with Korea duty-free
Last word
- Morning Star equity analyst Erin Swanson on beauty’s threats and opportunities

BW Confidential - Issue #2 - May/June 2010