The World Spends Billions to Look Beautiful. How Big is the Beauty Industry?
As a constant shopper of beauty products, I am always amazed at how beauty departments are always so crowd (leaving only elbow room in most cases). This is the case in department and specialty store. After pushing and literally saying excuse me over 30 times, I finally made it out of Sephora last week. Once I got outside and started walking down the street I wondered to myself: “How big is the beauty industry and how much is being spend by the consumer?” Here’s what I found:Total sales in the beauty industry have reached approximately $426 billion. While the Western hemisphere accounts for most of the spending in the beauty industry, India and the rest of Asia is not too far behind! MAC sells 1 lipstick and 1 eyeshadow every 2 second, which is amazing to me, while Sephora rakes in over $636 million in revenue.
Breakdown of the Beauty Industry
Now, the beauty industry is made up of 5 segments. The percentage each segments contributes to worldwide sales goes as follows:
- Hair Care – 20%
- Skin Care – 27%
- Fragrance – 10%
- Make-up – 20%
- Other – 23%
Hair Care Market
Roughly 20% of all cosmetic products sold are for the hair. Shampoos make up the vast majority of this market. Other products in this segment include conditioners, styling products, hair color, and relaxers. Currently, the biggest players in this category are Procter & Gamble (Pantene) and L’Oreal.
Skin Care Market
The skin care market is one of the most diverse as it offers a variety of products. Skin care makes up about 27% of the total cosmetic industry and includes skin moisturizers, cleansers, facial products, anti-acne, and anti-aging products. Skin care products can be some of the most expensive with 2 ounces of product routinely selling for anywhere between $200-$500. When it comes to maintain young skin, many women don’t mind splurging! The biggest companies in this market include Procter & Gamble (Olay) and Unilever (Vaseline).
The Make-up market represents about 15% of the beauty industry and includes anything from lipstick to nail polish. Other products included are things like blush, eyeshadow, foundation, etc. This market is highly segmented, making it hard to name one dominant player. Maybelline, MAC and Sophora are just a couple of significant brands.
Fine fragrance has seen a decline over the last couple of years and makes up about 10% of the beauty industry. This is said the highest profit segment of the cosmetic industry, however, consumers are very picky when it comes to fine fragrances. Only a few brands (such as Beautiful by Estee Lauder and Chanel #5) have sustained in and are still profitable in this segment.
Other (Personal Care Products)
Other which is known personal care products represents 23% of the beauty industry. This segment is made up of toothpaste, deodorants, sunscreens, depilatories, etc. The dominant companies in this segment are P&G, L’Oreal, and Unilever who are also players in hair care (listed above).
Men’s Grooming Takes off at the Speed of Light
Another big player taping on the door of the beauty industry is men’s grooming. This segment has seen substantial growth over the last couple of years and has been predicted to be valued globally at $29 billion in 2014.
The great news about the beauty industry is that no matter what shape the economy is in, this industry will continue to pull in sizable profits. Consumers want to feel good about themselves and are always looking for ways to change or enhance their look.
By Lolita A. Alford