Despite variable economic conditions, the natural personal care market continues to see strong growth, according to Kline & Company, posting a healthy 10.6% increase globally to reach US$29.5bn at the manufacturers’ level in 2013. According to the Natural Personal Care: Global Market Brief, which was recently published by the consulting and research firm, Brazil and particularly China are the fastest growing natural personal care markets, with sales in China increasing nearly 24% in 2013 and challenging the US’ global market share.
Growth within mature markets is being driven by the large number of brands present competing on products, price and efficacy; the US market saw a 7% increase, while Europe grew 6%.
“Within the flourishing Chinese market, while both domestic and foreign brands are enjoying growth, domestic ones still claim an estimated 80%+ share of the market,” said Zachary Ferrara, Project Lead for Kline China. “Notably, of these local players, those offering mostly TCM (traditional Chinese medicine) products account for approximately less than two thirds of the Chinese natural personal care market. However, international natural brands are becoming more accepted by Chinese consumers as they are considered to be of a higher quality.” The last five years have seen several global brands enter the Chinese natural beauty market including Jurlique (2009), Kiehl’s (2009) and Origins (2010).
According to Kline, the strength of the Brazilian market is being driven by leading marketers Natura and O Boticário, which collectively claim an estimated 85% total market share. The Brazilian market is said to be well developed with regards to sourcing of organic and natural ingredients, but companies still have a high concentration of synthetics in their formulations.
Globally, Kline says the natural beauty market is extremely fragmented, with only six companies enjoying a share of 3% or more. The leading brands differ regionally with Aveeno and Bare Escentuals leading in the United States, L'Occitane and Saishunkan in Japan, Chando and Inoherb in China, and Yves Rocher and Oriflame in Europe.
The channel mix also varies significantly between regions. In Europe, pharmacies dominate the scene while mass outlets post the highest growth. Direct sales lead in Brazil, and health and natural food stores rank first in the US.
The research firm also notes that several companies are seeking to reformulate existing product lines to remove synthetic ingredients. With no strict government mandated directives and standards, various certifying agencies are taking initiatives to regulate the market, but Kline says the challenge is still to scan for its naturalness. Additionally, only a few marketers take the initiative to approach the certifying agencies to get their products certified.