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More Cosmetics Marketers Set Their Sights Overseas

November 22, 2005

In an attempt to compensate for weak sales in their domestic regions, leading cosmetics and toiletry companies are turning their attention toward developing markets in Asia, Eastern Europe and South America in search of growth, according to the 2003 edition of “Cosmetics & Toiletries USA” from Kline and Company, Little Falls, NJ.
According to the study, the U.S. cosmetics & toiletries market advanced just 1.7% in 2003, with dollar growth at its lowest level in 10 years. Sluggish economic conditions in Europe and Japan have also resulted in stagnant or declining growth rates for companies such as Shiseido and Henkel in their home regions.
In response, major C&T companies have shifted their attention overseas, the study said. L’Oréal has made its presence in Asia a priority by acquiring Chinese brands Mininurse and Yue-Sei. L’Oréal also purchased a majority interest in Japanese skin care brand Shu Uemura and recently launched Shu Uemura and its Matrix line in China. The acquisition of Dial and Advanced Research Labs last year gives Henkel a much broader reach beyond Europe, and Shiseido has continued its overseas expansion with product launches in Europe and North America.
However, developing countries such as China can present as many challenges as opportunities, Kline executives said. “With such a large area, sales channels and distribution are critical issues that need to be explored,” said Lenka Contreras, vice president for Kline and Company’s consumer products arm. “In some provinces, certain C&T product classes aren’t even being used, much less sold. This means that companies will be building rather than entering markets for their products, and they need reliable and consistent market information to make this work.”
To accurately examine leading markets for C&T products, Kline is currently organizing a comprehensive market research analysis. “Global cosmetics & toiletries” will cover 16 countries across North America, Latin America, Asia and Europe. The report will examine 20 product categories and provide detailed company profiles.
More info: www.kline group.com/y559.htm.
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