Along with fragrances, colour cosmetics is the most fashion-led category within the beauty market, influencing palette choice and demand for certain types of make-up over others.
But increasingly manufacturers are exploring new ways to compete, applying trends from other categories to colour cosmetics.
While the fast-growing emerging markets are the key source of dynamism within the global category, this approach is helping to encourage growth, albeit at a more modest rate, in the more developed markets.
The US$35.7 billion colour cosmetics category lagged behind the beauty market average in value sales gains between 2001 and 2006. Over the 2006-2011 forecast period, however, the outlook is somewhat more optimistic with a predicted annual growth rate of around 3%.
Eye make-up (US$9.4 billion) will see the strongest increases in percentage terms (almost 4% a year), narrowing the gap on the largest colour cosmetics sector, facial make-up (US$13 billion).
Dramatic, smoky eyes and nude lips, the mod-look dominating make-up trends across Western markets, continue to propel the category, and mascara is an important focus for innovation within the wider category. Lip products, on the other hand, is both the smallest colour cosmetics sector at US$3.3 billion in 2006 and the least promising in terms of forecast sales gains.
The emerging markets are the seats of growth in the global colour cosmetics category. Eastern Europe and Latin America together accounted for over a quarter of the US$6.1 billion in absolute growth achieved by the global category over 2001-2006, and going forward the Asian-Pacific markets of China and India are set to become important sources of growth.
China's colour cosmetics market will expand by almost US$600 million over 2006-2011 according to Euromonitor International forecasts and India's will be the most dynamic in percentage terms.
Yet even the more mature markets are not thought to have reached saturation point; Western Europe alone will see value sales increases of around 2% a year to 2011. Colour cosmetics is one of the beauty market's most innovative categories, and new product development is helping to lift unit prices and encourage limited volume growth as well.
Natural ingredients, so central in driving up value in other beauty categories such as skin care and bath/shower products, have found their way into colour cosmetics and are offering women a range of added benefits aside from chemical-free formulations.
Mineral make-up delivers important nutrients to the skin, provides a natural sunscreen, long-lasting coverage, and is suitable for sensitive skin types. Bare Escentuals, a pioneer in mineral make-up, saw sales reach almost US$400 million in 2006, although its market niche is increasingly being penetrated by the big-name brands.
Maybelline, L'Oréal Paris, Revlon and Almay are just some of the mainstream labels that have launched mineral make-up lines while private label presence is growing too.
Attracting new users
Reaching out to new consumer groups is becoming another priority for many cosmetics companies and the category is becoming increasingly segmented. One of the most recent areas for innovation is within the ethnic niche.
In the US, the largest market for colour cosmetics, Hispanics, African-Americans and Asians account for around a third of the population and their numbers are growing at more than twice the rate of the population as a whole.
It is, therefore, no surprise that they are becoming a target for new colour cosmetics launches. In 2006, Procter & Gamble's CoverGirl launched its Queen Collection in the US in partnership with singer/actress Queen Latifah. Prescriptives now offers Colorprint to suit ethnic skin tones and MAC has used Missy Elliot, Mary J Blige and Little Kim as spokesmodels.
Men have become a more unlikely target. In January 2007, three years after Jean Paul Gaultier made the first steps into men's make-up, Swedish clothing chain H&M launched a mascara for men. There is also an array of niche brands including KenMen.
While it is unlikely that the men's segment will find widespread appeal, segmentation by age holds more promise. Bratz mascara and the marykateandashley make-up line are just two examples of brands trying to capture some of the estimated US$250 million teen consumers spend globally on consumer products each year.
With an estimated buying power of US$2.1 trillion in the US alone, the baby-boomer generation is an even more tempting draw for cosmetics brands. However, the dramatic failure of Revlon's Vital Radiance, aimed at the 50+ woman, suggests that this consumer segment can be a difficult market to tap into.
Faster or improved application is a growing priority for women and is the main thrust behind the extensive innovation in mascara brushes in recent years. More recently it has filtered into the nail products sector, with the launch of improved brushes to make applying nail polish faster and more accurate.
Maybelline's newest line extension, Express Finish 60 Second Nail Colour, uses an exclusive control-flow brush which is said to dispense the optimal amount of colour for smooth, even application that resists chipping and peeling. The recent global launch of Bourjois 1 Seconde boasts a patented fan-effect brush which adapts to the size of each nail to provide one stroke application.
Sampling and single-use packs are also a growing trend in colour cosmetics, providing convenience, portability and a low-cost way to experiment with new colour combinations. Canadian make-up firm Cargo leads the way in this trend, offering products such as single-use eye shadow ColorCards and DailyGloss lip colours packaged in individual tear-away pouches.
Niche brands expand their presence
With innovation so central to colour cosmetics, the category is increasingly being penetrated by niche brands offering eye-catching new approaches to tempt consumers away from the big-name brands.
Kiss My Face (which offers natural cosmetics), Duwop (with functional products including lip plumping Lip Venom), Taxi (with its portable cosmetics range) and ModelCo (a make-up artist brand) are just some of the labels that are pouring into the market.
Their prominence within the category is also being helped by the growing willingness of retailers to stock niche brands as a way to differentiate their product ranges and cater for growing consumer sophistication.
Space.NK, Sephora and Beauty and Main are just some of the speciality chains that are key providers of niche brands. However, it is not just newer or specialist chains that are making room for niche brands. UK department store John Lewis' newly revamped beauty hall in Oxford St, London also stocks novel and specialist brands, such as a portable cosmetics range.
All this is potentially bad news for the established labels in what is already a fragmented category where only the top eight global brands have a market share of 3% or above. The leading brands are expected to ramp up their efforts to cater for niche demands going forward as a way of surviving in an increasingly competitive category.
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