The Ethnic Skin Care Market
Ethnic companies are churning out more new products whie broad-based companies are using other methods to attract the ethnic consumer.
The U.S. ethnic population is on the rise and so is the spending power of the three key ethnic groups, African-Americans, Hispanics and Asians. This growth is causing a surge in products being developed for ethnic consumers and the personal care market is being affected by this trend for two reasons. For one, personal care products often need to be adjusted to fit the needs of ethnic skin so research and development teams are creating lines formulated specifically for these groups. Second, all three ethnic groups have a tradition of spending a larger percentage of their disposable income on personal care products.
“Corporate America is increasingly tailoring its products and messages to these consumer groups because of bottom line consideration,” said Jeffrey Humphreys, executive director of the Selig Center for Economic Growth at the University of Georgia. “These segments are experiencing the fastest growth in a mature market and they are easy to tap into because they are not saturated with messages.” Dr. Humphreys recently conducted three studies measuring the spending power of African-Americans, Hispanics and Asians in the U.S. He found that spending power for all three groups has outpaced that of the entire U.S. population.
In the skin care market, this growth has led several companies to offer race specific products to consumers that address their different skin care needs. “Even the marketers who are not going exclusively after the ethnic groups are developing products that could rope them in,” said Sharon Garment, vice president, marketing BioCosmetic Research Labs. “You might be targeting teens with a product for oily skin but you will also get ethnic, which is a bonus.”
While the the pace of acquisitions and mergers that shook up the ethnic market this time last year has slowed, there is no question that broad-based companies are watching the ethnic market and looking for ways to capture the loyalty of the ethnic consumer.
A Growing Presence
According to U.S. Census Bureau estimates, the population of the three main ethnic groups in the U.S., blacks, Hispanics and Asians, is expected to reach 87 million and comprise more than 30% of the population by 2005. And since industry tracking shows that members of these groups tend to spend a greater portion of their income on personal care products, more and more broad-based companies are paying more attention to the ethnic consumer.
For skin care companies, this trend means carefully selecting ingredients that are effective on ethnic skin and ensuring their shade range is suited for ethnic skin. Estée Lauder always considers a large range of skin types and colors when developing its range of skin and makeup products, according to a company spokeswoman. “Our skin care products are formulated to address varied and specific needs and our cosmetic products are available in wide shade ranges,” said Lauder spokeswoman Marie-Claire Katigbak. “In addition our beauty advisers are trained to help each customer find the products that are right for her individual needs based on lifestyle, formulation and preferences.”
Dallas-based BeautiControl has always targeted a mixed consumer base by placing models of varying races in its catalogs and offering product shades for all skin tones. “We have a very clear vision of catering to women of all ages and races,” said Gary Jones, a BeautiControl spokesman. “I think it’s crucial to keep a multicultural edge in mind and we’ve learned a lot by doing this.”
Companies that are not willing to turn their attention toward the ethnic consumer could be missing out on big sales. “Almost every large company has its marketing departments considering these groups,” said Dr. Humphreys. “There are two ways to go with this—adjustment or augmentation. Some are making new, race-specific forms while others are changing their messages to make them more all-inclusive.” Personal care products are prime for adjustment because they need to be tailored for different skin types, he added.
For Darker Skin
With the the larger, broad-based companies such as L’Oréal and Revlon purchasing some predominantly black brands in recent years, more research dollars are being poured into developing products for darker skin. For instance, when L’Oréal acquired Soft Sheen Products last year, it announced it would open a research center devoted solely to ethnic skin care. Thus, it is no surprise that the ethnic market is ripe with new product innovation.
Don Baldock, a spokesman for J. Strickland & Co., a privately-held ethnic skin care company, said the larger companies have helped the ethnic market get noticed. “The only changes that larger companies are bringing to our industry is increased visability to all of the ethnic hair and skin care categories, which is a bonus to all,” he said. “They will emphasize the importance for ethnic categories and maybe the larger chains will increase shelf space to draw the black consumer into their stores.”
J. Strickland, Chicago, markets several product lines that are mainstays in the ethnic skin care category including Nadinola Skin Discoloration Fade cream, one of the top selling skin bleaches in the world, and the Artra line of skin creams with SPF protection and vitamins A and E.
According to industry sources, the typical black consumer spends 1.5% of his or her disposable income on personal care products compared to 1.2% for the total population. This propensity toward purchasing personal care products coupled with the race specific needs of black skin, have made African-American personal care products big business in the U.S. While this market is typically thought to comprise mainly hair care companies, skin care has become a major category in its own right as more companies offer products specifically formulated for the needs of black skin.
“The major topics in this category are fading, blemishes and ashiness,” said Ms. Garment of BioCosmetic Research Labs, Garden City, NY. “That is why this market was created—to address the problems of black skin.” Additionally, black consumers need products that do not contain whitening agents such as hydroquinone and titanium dioxide, which are normally present in broad-based skin care products to lighten skin or protect it from sun damage.
BioCosmetic first entered the ethnic market with the introduction of a fade cream under the Black Opal brand. The cream remains the No. 1 skin care product for black skin on the mass market, according to Ms. Garment. This fall BioCosmetic will introduce Black Opal Advanced Dual Phase Fade Crème for Sensitive Skin, a mild, hydroquinone-free, dual-color cream featuring a botanical complex of natural plant extracts and a high-tech formula that lightens dark spots and patches without aggravating skin. The cream, with or without SPF protection, retails for $11.95.
Recognizing the need for an upscale brand targeting black women, BioCosmetic recently launched the Interface line of prestige cosmetics, which joins other prestige ethnic brands such as Flori Roberts and Iman. “Some black women are department store shoppers—that’s where they want to buy their cosmetics,” Ms. Garment said. “And these women want a makeup line with 14-18 shades specific to black skin. Our Interface consumer is more upscale; she’s an educated woman shopping in the better place.”
Clear Essence, Ontario, CA, also addresses the needs of black consumers such as fading, uneven skin tone and ashiness with its range of skin care products. This fall, the company added Advanced Complex Fade Gel with Sunscreen to its lineup. The gel is formulated with 2% hydroquinone to fade dark spots. Also new this fall is Lemon Plus Vitamin C Vanishing Crème, a face cream formulated with a blend of vitamin C, nourishing emollients, antioxidants and botanicals to enhance skin tone and texture. Both products are available in four shades: mahogany brown, caramel brown, chocolate brown and brown sugar.
The Hispanic population in the U.S. is shaking things up. From pop dynamo Ricky Martin to the emergence of new Latino-oriented magazines such as Nueva York, Latin culture has taken the U.S. by storm. The Hispanic population in the U.S. is expected to reach 36 million by 2005 when it will comprise 12.6% of the population. Also, Los Angeles is expected to become the second largest Spanish-speaking city in the world during the 21st century. “The Hispanic population in this country is growing at an amazing rate,” said Lisa Sikriloff, president Multicultural Marketing Resources, New York, NY. “Companies need to really target this group if they want to be successful.”
According to a survey conducted by the Selig Center, Hispanic buying power has increased 84.4% to $383 billion since 1990 and this growth is expected to continue into the next century. Denver-based Scott’s Liquid Gold recognized the potential of the Hispanic population when it introduced Belleza Latin, a skin care line developed exclusively for Hispanics. The Belleza Latina line includes perfecting AHA cream, conditioning toner, moisturizing cream, face wash and perfecting eye cream. All of the products are 100% natural so they won’t irritate sensitive skin and are lightly scented to appeal to Hispanic consumers. Still, attracting the Latin consumers has been challenging, according to sales manager Craig Snyder. “Hispanics are less trustful and more brand loyal than any other group,” he said. “Once a consumer becomes loyal to a brand, it’s hard to get them to switch. You have to remember that generation after generation has used the same product.”
The company has also faced the challenge of entering a new category as the first skin care line aimed exclusively at the Hispanic population. “Consumers are not ready for ethnic products; they are only ready for black hair relaxers,” Mr. Snyder said. “There is a myth that Hispanics are no different from anyone else because they aren’t black but within five years they will be the largest minority in the U.S.” Because of the low levels of interest, Scott’s Liquid Gold is trying to turn Belleza Latina, originally a mass market brand, into a direct selling brand. “We plan to make this successful any way we can because if we abandon it we are abandoning it on the forefront of the new millennium,” Mr. Snyder remarked.
East Meets West
Asian women have long been known for their commitment to beauty and their ability to enhance their natural beauty without altering it. Like the African-Americans and Hispanics, Asian women have different skin care needs than Caucasians, making it somewhat difficult for them to find effective products in the U.S. Five years ago Susan Yee started Zhen Cosmetics with the goal of providing cosmetics to meet the needs of women with yellow undertones in their complexions, particularly Asian women. The line also caters to the sensitive skin problems common among Asian women living in the Western Hemisphere. “There is a definite cultural difference in the way to market products to Asian women,” Ms. Sikriloff said. “Asian women want to enhance their beauty naturally. They don’t want to change it." Zhen products provide light, natural coverage in neutral, yellow-based shades.
According to Zhen spokesman Larry Weinberg, Asian skin tends to become oily when exposed to the Western Hemisphere. To address this problem, Zhen products contain no mineral oils. For instance, Zhen Sheer Foundation is hypoallergenic and oil-free to offer sheer coverage without irritating skin. Other new products include a tinted moisturizer with SPF 15, which features a light formula that is rich in botanicals to smooth and tighten the skin while protecting it from harmful UV rays, and Zhen Sheer Lipstick with SPF 15. Currently Zhen is sold only at J.C. Penney stores but the company is expanding its distributorship to include military outposts. Also, a deal in in the works to launch the line in Macys and Nordstroms next year, according to Mr. Weinberg.
The company has also recently added a Zhen for Men line, which includes a facial exfoliating scrub, a botanical shaving cream and an herbal moisturizer. Like Asian women, Asian men often have sensitive skin. “The question with men is how to reach them,” Mr. Weinberg said. “Once you reach them they are extremely loyal but you need to establish trust.”
Merging Two Worlds
As more broad-based companies such as Estée Lauder and L’Oréal discover ways to attract the ethnic consumer, the ethnic-specific companies will be forced to keep a step ahead, offering innovative products and creative marketing to keep the loyalty of their customer base. “The general market has seen a real influx of products,” said Gia Clinkscales, senior vice president of marketing for Revlon’s African Pride brand. “And a lot of the companies are using African-American models in their ads to attract the consumers. This has really created a challenge for the ethnic marketer.”
So with the spending power of ethnic groups growing quicker than their populations, companies large and small will be vying for their attention. “The relative youth of this population argues for continued strong gains in the future,” Dr. Humphreys said. “Many of these consumers are in the early stages of their careers and as they climb the corporate ladder their spending power will increase. This might limit the growth of the market today but it will help create gains for tomorrow.”