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Industry Overview
Personal Care Industry Overview
Personal care products are generally used for personal health and hygiene. It includes products like body talc, body scrub, tooth paste, tooth brush, tongue cleaner, tooth powder, bathing salts, bathing gel, essential oils, moisturizer, skin creams, face wash, hair oil, hair shampoo, hair conditioner, soap, nail and cuticle care products. The personal care product market was a success on all counts in 2005-2006 with good performances from each of the Big 5 markets. In recent years, consumer health awareness has slowly been increasing and this has led people trying to take better care of themselves.


The major demand is for the products that are of basic need for the consumers like soap, shampoo, hair oil etc. The personal care products industry consists of four major sub-sectors manufacturing a range of products. These sub-sectors and their products are highlighted below:

  • Face Care Products- Face is the reflection of an individual’s physical appearance. Generally, the beauty of a person is described by the look of one’s face. Thus, to enhance the beauty of the face people use face care products whose market is growing at double digits. The industry manufactures products like astringent, face cream, face scrub, face toner, moisturizer, cleanser, etc. Some of these products are used for clarification and purification of the facial skin from dust and harmful rays of the sun while others are used for toning.

  • Hand and Foot Care Products- As the name suggest these products are used to enhance the beauty of hands and feet. The hand and foot care product market segment, grew 5.9% in 2005 to a total of 338.2 million dollars, and included many successful product introductions. These included herbal and organic products, as well as products for youthful skin. Men are also starting to take better care of themselves, resulting in growth in the men’s foot care products market segment. Hand and foot care products can be broadly categorised into cuticle care products, foot scrub, hand and foot cream, nail care products etc. The diagram below shows the various market segments:


    Figure 1: Global Market (segment) share in %

  • Hair Care Products- Hair care was the largest market segment, both in 2004 and in 2005 with sales reaching 350 million dollars. The price war has had its impact on the shampoo and styling categories. Sales in hair coloring products has stabilized while hair conditioners and hair repair products, showed significant growth. Consumers are willing to buy special, more costly, products because these products are used for many purposes like hair cleansing, hair conditioning and hair coloring. Some important hair care products are mentioned below:

  • Cosmetics- The global cosmetics market continues to benefit from a combination of strong macroeconomic trends creating opportunities for new product niches. The strongest growth in the global cosmetics market in 2005 was derived from developing regions such as Eastern Europe and Latin America and key markets in Asia-Pacific, with expansion linked to large populations, rising disposable incomes, modernising retail and distribution networks and increased industry awareness amongst consumers. Cosmetics are items to enhance or protect the appearance or odor of the human body. The products included in this category are:

Major Manufacturers and their Market Share
The major personal care products manufacturing nations include France, Germany, Italy, Spain, United Kingdom, United States, Russia and Brazil. The industry has a huge market and the demand for essential products like soaps, shampoos, moisturizers and lotions is the highest.

The personal care products industry is closely associated with two other industries, the health care industry and the chemical industry thus forming an important part of the value chain. It is also related to the petroleum industry as most of the raw materials used for making personal care products like Propylene Glycol and PVP/VA Copolymer are derived from petroleum products. As these products might contain some toxic elements, research and development is going on to make them less harmful and therefore healthy ingredients like herbal and other natural products are used. Now more and more companies are emphasizing on making products, using organic or herbal compounds instead of synthetic ones.

Global Trade Volumes and Trends
The personal care industry had an excellent growth rate in all the major markets of the world in 2005-2006. Since the past few years, people have become more conscious about their appearance and look, leading to a huge demand for these products in the whole world. New products are launched by the leading brands to attract consumers. The trends in all the leading personal care markets show that this industry is showing a massive potential for growth. The women’s beauty industry is growing at rate of approximately USD 202.254 billion every year where as the global market for cosmetics alone USD 30.33 billion. The global personal care products industry is growing at a very rapid pace; some of the factors responsible are:
  • Rise in consumer spending power,
  • Increased demand due to people consciousness,
  • Key demographic factors,
  • Entry of herbal and organic products,
  • Lifestyle and climactic changes, and
  • Massive advertising and promotiom strategy
Some of the growth statistics for France, Germany, Italy, Spain, United Kingdom, United States, Russia and Brazil for the year 2007 is presented below.


France
The personal care product market in France is becoming more diversified and fragmented. In the year 2006 the personal care industry in France grew at the rate of 2.7%, earning a revenue of USD 1,151.34 m according to the Fédération des Industries de la Parfumerie. The largest share among all the personal care products was of body moisturizers, with sales of USD 361 m, which was 2.4% more than the previous year.

Germany
The German personal care market has shown a rising trend in the year 2006 with a total sale of USD 983 m as reported in IRI Germany at the rate of 3.7%. In Germany the most popular personal care products are Gels, Lotions, moisturizers and creams.

Italy
According to the ECM calculations by Unipro, the Italian market figures for total sales of personal care products were USD 1,186.15 m in 2006, which was above 6.3% than the previous year.

Spain
Due to increasing awareness about personal care and beauty, a large number of Spanish people are demanding good quality personal care products, which has led to a growth in the development of this industry in Spain. Body lotion and body oil accounted for the largest share among other body care products.

United Kingdom
According to a study by TNS Worldpanel, the personal care industry in UK had the total sales of $312.77m in 2006, which was 9% higher than the previous year.

United States of America
Anti-aging creams and lotions have a huge demand in USA, and these products are pushing the rate of growth of this industry in this country. In USA, the personal care products market is almost USD$40 billion and according to estimates it will grow at the rate of 3.4% annually.

Russia
The Russian personal care market continues to grow and in several aspects, according to some marketing specialists, doesn’t conform to the European models.

Brazil
The personal care industry in Brazil is the sixth largest in the world, and had the sales of US$9.19bn in 2006, which is up 13.6% from $8.09bn in 2005.


Figure 2: Growth in Personal Care Industry in 2006

Body care products claiming to firm, tone and lift offer consumers a quick-fix solution for body woes. The industry turns over $100 billion every year & the cosmetics market alone is worth more than $15 billion worldwide. The UK market is worth $6.2 billion with a +5.3% growth rate. People in the UK spend on average $2,000 a year on beauty treatments & cosmetics. The cosmetics market is expected to be worth $351 million by 2009. Total expenditure on male grooming products in the is expected to reach $1.5 billion by 2008. Spending on own-label personal care products rose to $7.4 billion last year. The global personal care products industry is growing at a very rapid pace; some of the factors responsible are:
  • Rise in consumer spending power,
  • Increased demand due to people consciousness,
  • key demographic factors,
  • Entry of herbal and organic products,
  • Lifestyle and climactic changes, and
  • Massive advertising and promotiom strategies.
Future Prospects
The future for the personal care products industry is very prosperous, which can be analyzed by the rising growth trends of the industry. But there are many concerns related to the chemicals and toxins used as ingredients for making personal care products. These substances can affect our health and the environment also. They are absorbed through our skin and can enter our bloodstream thereby affecting our kidney and liver, and thus can have very harmful effects on our bodies and when these products are washed off from the body, they are released in to the environment.

Many companies are addressing these problems and are shifting their focus to the natural and organic products. These products are beneficial to our health as well as environment, because very less quantity of synthetic compounds and toxic elements are used in these products. In most of the countries the demand for organic products has been rising steadily. According to a study conducted by the Natural Personal Care Consumers: Unlocking Future Potential, the organic products market in UK alone will rise from USD 18.19 million in 2007 to USD 24.26 million in the year 2011. Organic and natural personal care products industry has profited much from the growing consumer awareness and their changing lifestyles. These developments have also helped in introduction of a lot of organic products in the market. Despite many sectors showing signs of maturation in the key, developed markets, innovation remains high and while economic prosperity continues many consumers are proving willing to make the trade up, signalling a positive future for value sales.




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