BW Confidential - Issue #2 - May/June 2010 - (Page 35)

Market watch: Asia Asia Japan p.36 China p.39 South Korea p.42 Outlook for the east Our latest Asia market watch monitors the beauty category in Japan, China and South Korea eauty industry players continue to look East. Given the stagnant state of affairs in old Europe and North America, Asia, now more than ever and along with the other BRIC markets, is the key to gaining growth. This is certainly the case for one of the main hubs in the region—China. The Chinese beauty market managed to pull off impressive growth last year in spite of the financial crisis. The market was up by 8.7% to €15.4bn, while skincare sales increased by 11% to €5.7bn, according to Euromonitor. This growth is set to continue, especially as the urban population grows, disposable income rises and consumers begin to trade up. Indeed, Euromonitor says that China will account for 30% of growth in the global cosmetics and fragrance market between 2008 and 2013. Companies are positioning themselves to take advantage of this growth. Most big players have increased their investments in these markets over the past year, in terms of advertising and promotions, extending new brands into the market or by developing new research or other facilities (see article p. 39). But in addition to the high-growth countries, such as China and India, or to a lesser extent B markets like Indonesia, there are bright spots in more developed parts of the region. In South Korea for example, the beauty market also proved resilient, posting growth of 12.5% to $6.41bn, according to Korean group Amore Pacific. And what is encouraging to Western groups is that foreign players are taking a greater share of the market here, although domestic players still maintain a strong grip on the category (see article p. 42). The same cannot be said of Asia’s largest mature market. Japanese beauty is struggling. While the category has managed to weather previous downturns quite well, last year was different. The Japanese beauty market saw its worst decline ever, with value sales dropping by 8.1% to $12bn. Consumers bought less, but also traded down to cheaper items and the middle market suffered. In addition the market saw the rise of new retail outlets offering cheaper alternatives (see article p. 36). This spells bad news for foreign players, which have long found the market tough. Some may just be tempted to turn the focus that was once given to Japan to the country’s higher-growth neighbors. n May-June 2010 - N°2 - BW Confidential credit: stock.xchng 35

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