Global Cosmetics Industry Forecast of 487.1 Billion US Dollars Market by 2021

Global Cosmetics Industry forecast to reach 487.1 billion US dollars by 2021

1. The global market is picking up, and the Asia-Pacific region becomes the largest consumer market

The global cosmetics market is picking up. In the past ten years, the global makeup market has shown a tough and stable growth. There has been no stagnation or negative growth in one year. Even though the growth rate slowed down in the crisis year of 2008-2009, it quickly returned to the normal level of historical growth during the recovery. . From 2010 to 2015, the global economic slowdown led to a significant decrease in the size of the cosmetics market. In 2015, it even experienced negative growth due to weak demand in the euro area and a severe economic downturn in Brazil, one of the major consumer countries. Until 2016, the market inflection point was ushered in, and the global market size rebounded to 441.66 billion US dollars, reversing the trend of global cosmetics development.

The global cosmetics market continued to grow in 2017, reaching a scale of US $ 464.8 billion, the highest level in five years, an increase of 5.2% year-on-year, and an increase of 4.2 pct compared to 2016. This is the second consecutive year after the global cosmetic growth rate has been bottomed for 15 years. A warm-up condition has occurred. It is predicted that the growth trend will continue, and it is expected to reach USD 487.1 billion by 2021.

The Asia-Pacific market is currently the world's largest consumer market for cosmetics, followed by Western Europe, North America, and Latin America. In 2017, the size of the cosmetics market in the Asia-Pacific region reached 79.81 billion euros, accounting for 37% of the global total. The size of the Western European market was 38.83 billion euros.

Accounting for 18%, the North American market size is 53.93 billion euros, accounting for 25%. As the country with the fastest average annual growth rate in the development of the global cosmetics market, China's market size in 2017 was 361.6 billion yuan, a year-on-year increase of 9.6%, which is much higher than the world's average growth rate of 5.2%. In 2016, China became the second largest consumer of cosmetics in the world.
Global Cosmetics Industry Forecast

Global cosmetics market scale and growth rate

   Related reports: "2019-2025 Special Investigation and Investment Prospect Forecast Report of China's Cosmetics Industry" issued by Zhiyan Consulting

2. The performance of China's cosmetics market is bright and the development potential is huge

 China is currently the second largest market for cosmetics worldwide, after the United States, accounting for 11%. After five years of sustained slowdown in 2012-2016, starting in May 2017, single-month online retail sales of cosmetics have continued to grow to double digits. As the country with the fastest average annual growth rate in the development of the global cosmetics market, China's market size in 2017 was 361.6 billion yuan, a year-on-year increase of 9.6%, which is much higher than the world's average growth rate of 5.2%. In 2016, China became the second largest consumer of cosmetics in the world.

Online retail sales in 2017 increased by 13.5% year-on-year to 251.37 billion yuan. The strong recovery continued into 2018, and the single-month growth rate in March 2018 reached 22.7%, the highest monthly growth rate in the past seven years.

    China's cosmetics market penetration and growth drivers. Although China is already the world's second largest market for cosmetics, compared with developed countries, China's cosmetics penetration rate is still low. Per capita cosmetics consumption in 2017 was only 38.5 US dollars, which is far from the US 264 US dollars.

 Room for growth

 As a very flexible consumable, the consumption of cosmetics has increased with the growth of residents' income and demand. The ceiling of the industry is very high. With the increase of income in the future, the penetration rate of cosmetics in China is bound to further increase.

Recent Asian Growth Rate of Cosmetic Market

Recent Asian Growth Rate

 From 2017 to 2018, the average monthly growth rate of cosmetics consumption of residents exceeded 13.5% year-on-year. The increase in consumption levels has laid the foundation for the development of the cosmetics consumer market. In 2017, the per capita consumption level of cosmetics in developed countries was about four times that of China's per capita consumption level, which indicates that the scale of China's cosmetics market is currently at a relatively low level, and there is still huge room for development in China's cosmetics market.
Monthly YoY Growth Rate of Cosmetics Consumption of Chinese Residents took place in the 1st Half of 2017-2018.

 Diversified channels and consumption upgrades have significantly increased the market share of domestic brands. In recent years, with the improvement of people's living standards and the drive of consumption upgrade, Chinese people's demand for cosmetics has increased significantly. Superimposed by the popularity of the new channel of e-commerce, domestic cosmetics have emerged again, showing signs of recovery. With the popularization of e-commerce, the consumption patterns and habits of Chinese people have started to change, and the income level of residents has increased, and the demand for cosmetics by residents in third- and fourth-tier cities has significantly increased. Per capita consumption of cosmetics in China increased from 169.4 yuan in 2011 to 2017 $ 261.5. With the diversification of sales channels and the increase in demand brought by consumption upgrades, the market share of domestic brands is expected to further increase.

3. Representatives of domestic cosmetics companies

 The cosmetics industry has now developed into a global industry mainly based on group operations and brand driving. The major cosmetics groups around the world have initially established a dominant position. The international giants are European and American departments: Procter & Gamble, L'Oreal, Estee Lauder, LVWH; Japanese and Korean Departments: Shiseido, Kao, Amore, LG live healthy, Kose. Of the above six international cosmetics giants, L'Oreal has the highest operating income and net profit, reaching 2015 billion yuan and 27.7 billion yuan, respectively, representing the highest level in the industry. Secondly, both Estee Lauder and Shiseido have revenues of more than 50 billion yuan, and Kose has more than 15 billion yuan in revenue.

    The rise of domestic cosmetics brands has steadily increased their performance. In the tide of global cosmetics development, China has also bred a number of highly competitive cosmetics companies, of which listed companies are: Shanghai Jahwa, Polaya, Lafang Jahwa. The domestic cosmetics industry is one of the industries with a high degree of marketization in China. During the rapid development of more than two decades, foreign giants have entered China to cultivate the market and educate a generation of consumers. Chemical companies have also experienced the test of blood and blood, and a large number of local brands have also risen in the cruel market competition. With the third-tier and fourth-tier consumption upgrades and the trend of local brands paying more and more attention to brand marketing, the performance of six local cosmetics companies has achieved steady growth in recent years. 
In 2017, Shanghai Jahwa's operating income reached 6.5 billion yuan, which is the sum of the other five revenues, but its net profit was only 400 million yuan, and there was still a lot of room for profit. In addition to the good looks of Shanghai, the revenue of the other four local cosmetics companies also exceeded 1 billion yuan, but the net profit was generally not high.

Revenue and net profit of international cosmetics giants in 2017

The domestic cosmetics market share has increased significantly. Among the top ten companies with a market share in the Chinese cosmetics market, there are only three Shanghai-based companies, Baique Ling and Jialan Group, which are among 6-10. However, in recent years, with the precise marketing of some cosmetics brands, the popularity of superimposed e-commerce and the consumption upgrade of third- and fourth-tier cities, the market share of some domestic cosmetics brands has increased significantly. Among them, the market share of Baique Antelope increased from 1.4% in 2014 to 2.3% in 2017, ranking second in the market share of brands, and the natural market share increased from 1.3% in 2014 to 1.7% in 2017, ranking the first in the brand market share. 5th, the rising trend of domestic makeup brands is obvious.

Because the cosmetics industry is an industry that is priced by brands and channels, not by production and manufacturing, brand owners generally have very high gross margins. From 2015 to 2017, Estee Lauder's gross profit margin was maintained at about 80%, and LG's life was relatively low, with a gross profit margin of about 60%. On the whole, the international giants ’gross profit margins have not changed much, and basically remain at a relatively high level. Compared with international giants, the level of gross profit margin of domestic enterprises in China is relatively low, and the highest level of gross profit margin is only 65%. From 2015 to 2017, the four listed companies were in the 50% -60% range. Among them, the gross profit margins of Shanghai Jahwa and Pollya are stable, and Yujiahui has declined year by year. In 2017, the highest gross profit margin was Shanghai Jahwa, which reached 64.9%; followed by Poreal, with a gross profit margin of 61.7%.

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