Professional Aesthetics Market

As producers of advanced cosmetic lasers and intense pulsed light aesthetic equipment used by dermatologists and plastic surgeons step into the limelight with their new-found alliances with beauty marketers to reach the general market beauty consumer, a better understanding of the professional aesthetics market and its potential is imperative.

Leveraging the skills and synergies of our Professional Skin Care and At-home Beauty Devices reports, Kline will be focusing on the under analyzed nonsurgical procedures market in the Professional Aesthetics: Global Market Analysis and Opportunities report.

The analysis will imminently address nonsurgical approaches employed by physicians, aestheticians, and other professionals to engage skin care concerns including acne elimination, facial firming/body toning, fine lines and wrinkles, hair removal, and hyperpigmentation. These approaches include the use of aesthetic lasers and light therapy, dermal fillers, microdermabrasion, and injectibles in China, Europe, and the United States.

Pertinent questions to be addressed by this research include:

• What’s new in laser and light device technology for the skin care market?
• Is there an opportunity to pair professional skin care products with these therapies for pre- or post-procedure use?
• Which skin care concerns are driving market growth?
• What opportunities might exist for the at-home use of professional devices?

The timeliness of this report is underscored by much talk at the American Academy of Dermatology’s recent South Beach Symposium in Miami Beach, which centered on the potential distribution gains for SkinMedica under its new parent, Allergan, the maker of injectibles Juvederm and Botox, and how to better to team up skin care brands with laser companies for pre- and post-procedure care. Similarly, adding a potential wrinkle to Allergan’s dominating Botox is an expected much-mooted alternative being developed by corporate giant Johnson & Johnson.

Rejuvenate your perspective, inject market intelligence, and confidently face the competition with Kline’s forthcoming Professional Aesthetics: Global Market Analysis and Opportunities report.

While candles could be found in all types of containers, shapes, and sizes, the driving force behind category growth was scent, scent, and scent. And there was plenty of scent to choose from.

Travel and destination scents gained some traction this year with mass-marketer Air Wick pushing hard on all fronts with its National Parks themed-scents. Masculine scents and containers seem to be making inroads with many brands. Party Lite launches Ebony Oud Square Pillar and Wooden Wick Candle, which features a rustic textured finish with a masculine appeal. The PaddyWax Library Collection of author-inspired scents and packaging, such as Charles Dickens and Jane Austin, had a masculine edge to it. Nest’s After Midnight candle collection of three different scents offers consumer heavily scented candles contained in a black glass holder.

From a distribution standpoint, Internet sales made a splash this year helping candle consumers forego the mall and purchase their favorite Yankee Candle or Bath & Body Works candle online. Another notable marketing development is the widespread use of social media as a promotional avenue for home fragrance candle marketers–both prestige and mass. Presence on social networking sites like Facebook and Twitter has become standard fare in the marketing strategy and an essential way for brand owners to stay in touch with existing and potential customers.

New product information and promotional offers are frequently posted by all the leading brands through their respective websites. Both mass and luxury marketers attempt to educate consumers about fragrance with a variety of brand website tools. Ribbon Wick’s website features a “Learn to Burn” video, which helps consumers to get additional candle care information. Air Wick’s website features “Find the perfect product for you,” a tool that helps consumers find the right fragrance and color based on their choices.

Early signs of consumer spending as indicated in the findings from our Home Fragrances Shopper Survey show that a healthy majority of consumers plan to spend more on home fragrance products than they did last year. Scent is also the driving force behind the vast majority of their purchases.

Two distinct paradigms are penetrating the Asian markets. Japan and South Korea are benefiting from male grooming, including the use of cosmetics, as an entrenched socially encouraged practice wherein men are seeking to retain a youthful appearance. By contrast, within China and India, male grooming as a trend has only recently been developing its significant potential and is being bolstered by greater disposable income among a large number of consumers.

Foreign brands increasing their cachet and expanding their distribution within the Asian markets -especially in the skin care category – are offering compelling images and spokes models to foster male grooming. Savvy male grooming product marketers, both foreign and domestic, have enlisted film and sports stars as brand ambassadors to attract new consumers to the segment.

Drawing upon the celebrated and highly influential Indian film industry, “Bollywood,” L’Oréal (Garnier Men) has recruited actor John Abraham as its brand ambassador while Emami (Fair and Handsome) has similarly appointed actor Sharukh Khan as the face of its brand.

Foreign brands, possessing technical expertise, facilities, and means to support innovation and marketing activities, are expected to capitalize upon these advantages and grow faster than domestic brands within China and India.

L’Oréal’s brands lead across Asia with the exception of Japan, where Mandom (Gatsby) claims the greatest market share and L’Oréal follows as the third largest.  Within South Korea HERA Homme (Amore Pacific) is the leading brand.

Popularized by local TV stars and the K-Pop music phenomenon and TV, the well groomed male is invigorating the South Korean male grooming market, growing at over 10% in 2012. The South Korean male grooming market is considerably advanced, and with the use of cosmetics a culturally accepted practice. The localization of imported brands is a significant trend in the South Korea as exemplified by Biotherm Homme signing Daniel Henney, an American actor and model whose mother is a Korean-American, as a brand ambassador.

The Japanese market remains subdued due to long-term factors including an increasingly low birthrate and an aging society. In fact, the entire Asian region is aging fast. China, for example, is seeing a faster median age increase than almost any other large country in recorded history. This might translate into the market being stimulated by older men who seek to mitigate the signs of aging.

The consumer component of Kline’s male grooming market research, with insights from over 1,500 males between the ages of 15 and 69 and spanning six core countries, reveals a major cultural shift observed across all age groups in countries where previously male grooming consisted of little more beyond basic cleaning and shaving.

The vibrant powerhouse that is Asia has huge untapped potential in the male grooming space and is forecast to post the strongest growth globally through 2017. The rising cultural acceptance of using male-specific products is certain to drive the growth of the male grooming market globally in the coming years.

Gain a complete picture of the market with Kline’s Male Grooming Products: Global Market Brief.

Skin cancer is an ever-growing concern, particularly among the fair-skinned. Aging is the leading skin care condition in the United States, followed by hyperpigmentation. With both of these skin care conditions exacerbated by overexposure to the sun, it is telling that market segments addressing these conditions posted solid gains in 2012, growing by over 4%, according to Kline’s research on the professional skin care market.

Increasing awareness among consumers about the potentially harmful effects of UV rays has helped boost the sun care category’s sales in 2012. Manufacturers’ sales in this category grow 6.5% in 2012 in the United States finds Kline’s Sun Care Products Market in the United States.

Given consumers’ near universal desire for value and products with multiple benefits, sun care marketers are diversifying their product offerings. Recently, a common trend emerging among many up-market sunscreens is to include tint, as exemplified by Anthelios 50 Tinted Mineral Ultra Light Sunscreen Fluid newly introduced by L’Oréal under its La Roche Posay brand, and Eclipse SPF 50+ PerfecTint by Innovative Skin Care.

Due to the volatile nature of product formulations, packaging is of utmost importance to marketers of sun care products. With the evolution of the sun care market, marketers are introducing complex formulations that require innovative packaging solutions including airless packs, foams, sprays, and dispenser tubes. Although spray-on sun care products are popular, there are rising concerns among consumers about the dangers associated with the inhalation of the nano particles released when these products are sprayed. However, companies such as The Honest Company, Aubrey Organics, Babo Botanicals, and California Baby are consequently offering nano particle-free sun care products.

Natural and organic products continue to gather momentum in the sun care products category and although natural ingredients, such as broccoli extracts, totara and manuka tree extracts, jojoba byproducts, cordyceps fungus extracts, and turmeric, have proven themselves as effective ultraviolet filters, there are currently no 100% natural sunscreen formulations in the market.

New U.S. regulations, which came into effect in December 2012, mean that companies can no longer employ terms like “waterproof,” “sweat proof,” “sunblock,” and “all day protection” on product labeling and formulations. Additionally, products must pass UVA and UVB protection tests in to claim “Broad Spectrum” protection. These regulations are likely to lead to changes during the coming years.

Taking the biggest cut, the hair-care segment continues to keep ahead of the United Kingdom’s professional beauty market with a 65% total market share, generating £370 million (USD 560 million) in sales at the retail level in 2012. However, consumer visits to hair salons continue to decrease, particularly in the lower-end segment.

A particularly strong boom in the number of nail salons is being seen, with many introducing skin care services. The number of popular high street in-store beauty institutes is also progressively increasing. Nail care, although claiming the smallest share of the British professional beauty market, has seen a meteoritic 30% increase in sales through 2012. More readily lending itself to constant innovation and novelty, the professional nail care market has successfully tapped into these advantages and continues to invite faithful consumer spending.

Skin care is another area experiencing growth and, with the second largest professional skin care market in Europe after France, accounts for over 16% of European sales in 2012, the United Kingdom is showing up some particular market tendencies.

What especially differentiates the 2012 British professional skin care market from the Continent is the predominance of the medical care providers channel, which continues to be the best performing channel in the United Kingdom, with sales soaring at nearly 13% – far ahead of the retail stores channel. By contrast, both the beauty institutes and salons and spas channels are seeing slight sales declines.

With approximately 25% of all dispensing physicians in Europe, the United Kingdom has the greatest number of physicians dispensing professional skin care products to consumers. This combined with an increase in the number of medical care providers, particularly with dermatologists and plastic surgeons typically dispensing skin care products within their private consultancies, and with the market enjoying more relaxed oversight compared to Continental Europe, have all contributed to the United Kingdom continuing to be one of the fastest growing markets in the European region.

Reflecting high cultural diversity, as well as a burgeoning minority market, whitening/hyperpigmentation is claiming 11% of take-home face care sales, significantly higher than the European average of 7%. Sales size and growth are primarily driven by the medical care providers channel and an increase in demand from ethnic minorities, particularly from South Asia.

Further powering the British skin beauty is the market for at-home beauty devices. With strong marketing strategies, companies are building up consumer awareness of these products and generating keenness on integrating them into consumers’ at-home beauty regimes.

The U.K. market is currently fragmented, especially in the hair removal segment due to the entrance of the new products filling the void left by the withdrawal of the Cyden brand. Cyden had held 45% of the market share in hair removal devices when it ceased manufacturing at the end of 2011. This has left room for established brands such as Tria and No!No! to set up subsidiaries in the United Kingdom to compete with the new market leader Philips’ Lumia.

These and other insights from the global professional beauty market can be found only with Kline’s in-depth analysis available for countries within the regions of Asia, the Americas, and Europe. Please click here for details.

Among the highlights of Monday’s activities included a panel discussion moderated by Cosmoprof’s Pat Neville. Panel participants included Reuben Carranza, CEO of Wella, The Salon Professional Division of P&G North America; Martin Flaherty, Senior VP of Business Development at Colomer Beauty Brands USA; and Kristin Firrell, VP of Product Development and Education at John Paul Mitchell Systems.

Here are some of the highlights from the panel discussion:

On the next big trend:

Reuben:  Products for thinning hair.

Martin: Styling products that act as a perm.

On product sales via the internet:

Martin: The industry has had its head in the sand.

On YouTube:

Kristin: Have you seen the “Girl Who Burned Her Hair” video?

Reuben: Some of what is out there is really inspiring and some is scary as hell.

On building service revenue:

Kristin: Having little menu items makes the difference.

On differentiating salon products from others:

Reuben: The basis of differentiation is the service experience in the salon or spa.

Martin: We distinguish ourselves by respecting the craft.

The Bed Bath & Beyond chain of home goods stores isn’t the first place one might think of as a key retail channel for beauty and grooming products, but that may be changing in the future. Since the company purchased the Harmon health and beauty care chain in 2002, it has been putting Harmon departments in its other stores. The company is becoming more aggressive with acquiring new companies, as well as opening new locations, and is further focusing on a cross-pollination strategy, bringing themes from one type of store into another.

Bed Bath & Beyond acquires Cost Plus World Market, as well as Linen Holdings, in 2012. In the past year, the company opens a total of 41 new stores while continuing to add Harmon departments. Even Cost Plus World Market, which has traditionally focused on edible goods and eclectic décor, now has cosmetics and toiletries in some locations. Kline expects that the company will continue to integrate additional departments within its stores with merchandise obtained via relationships with vendors from sister concepts. Therefore, it is likely that more Harmon departments will open in most or all of the retailer’s stores.

This strategic move could prove a game changer for the cosmetics and toiletries industry if Bed Bath & Beyond continues adding such departments in all of its locations, which now include 1,004 Bed Bath & Beyond stores, 74 Christmas Tree Shops stores, 82 buybuy BABY stores, and 264 Cost Plus World Market stores (acquired in 2012). Of the 1,471 total stores the company currently operates (which include 47 Harmon stores), 1,437 are located in the United States, plus the District of Columbia and Puerto Rico, while 34 stores are located in Canada.

In 2010, Bed Bath & Beyond opened up the first ever L’Oréal boutique within a store, at its East 61^st St. and 1^st Avenue location on the upper east side of Manhattan. It has beauty advisors trained by L’Oréal. This experiment has been successful and the boutique is flourishing today. With cosmetic and toiletry departments rolling out within Bed Bath & Beyond’s other stores make a very real possibility of the company owning over 1,400 cosmetics and toiletries retail locations within the United States.

These insights, with much greater detail and analysis can be found in Kline’s soon-to-be-released Beauty Retailing USA: Channel Analysis and Opportunities report. The study gives sales figures of every cosmetic and toiletry category across all sales channels and sub-channels, such as direct sales broken out by Internet, infomercials, person-to-person, etc. It also contains detailed channel profiles and profiles an array of retailers including Amazon.com, Ricky’s, and Bed Bath & Beyond.

However, with the Chinese economic growth tapering from a GDP of 9.2% in 2011 to 7.8% in 2012, consumers have become more price-sensitive and have reduced their salon and spa visits. That said, Chinese consumers determined to tackle their beauty concerns and desires are still willing to spend. Offering worthy challenges, despite lessened traffic, the professional market in China is seeing a steady increase.

Posting a solid 5% growth, the professional skin care market is seeing foreign brands experiencing faster growth than local ones with the exception of local Chlitina, which posts above-average market growth due to its mature sales network, strong brand reputation, and strong senior management.

In general, the Chinese are inclined to perceive foreign products as more desirable, associating them with higher quality and the cachet of a premium purchase. Foreign products are particularly popular within the younger, trend-setting, demographic and foreign brands are expected to continue to outpace domestic brands through 2017 according to Kline’s recent Professional Skin Care: Global Series report.

The top skin care concerns in China include dehydration, skin whitening, and anti-aging. Anti-dehydration products are popular typically during the fall and winter, and the demand is larger in the northern China region, where the climate is more arid than the southern area.

Seeking lighter colored skin remains an ongoing trend persisting across most demographics, but youth in particular. Lighter colored skin is traditionally perceived as a sign of an elevated social status and appears firmly established within the Chinese market’s concept of beauty, this being borne out by a CNY 940.9 million (USD 149.6 million) spend on skin whitening products in 2012 alone.

With a CAGR exceeding 6% between 2007 and 2012, the salon hair care market is largely being driven by increasing salon doors and rising incomes. Hair coloring is the most dynamic category, thanks to educative marketing, celebrity-driven fashion trends, and consumers being more image conscious, reveals Kline’s latest Salon Hair Care report. Increasing consumer concerns with hair and scalp health, including issues such as hair loss, are boosting the growth of shampoos and conditioners. Of particular note is that consumer written salon reviews are growing in importance as savvy consumers are increasingly using review sites, such as Dazhong Dianping (similar to Yelp), to read about and comment upon salons.

To polish things off, Kline’s Professional Nail Care report reveals that China is the second largest market for professional nail care products, accounting for over 20% share of the Asia-Pacific regional market according Kline’s Professional Nail Care report. Again, the price-conscious consumers hold away with low-cost brands widely available in salons, including premium nail salons, to successfully attract a greater clientele.

China’s changing skin, hair, nail care needs, and consumer behavior patterns are comprehensively assessed in Kline’s Professional Segment.

With its near quarter-of-a-billion-strong population, a median age of less than 28, and growing spending power and awareness, Indonesia has the means and energy to spend on looking attractive. This is widely promoted by the Korean pop phenomenon known as K-pop. In K-pop, the visuals and looks matter as much as the music does. The striking hair styling and makeup, encapsulated by K-pop idolatry, is storming the cosmetics and hair industry, resulting, among other trends, in a hair coloring boom among the country’s youth. Of particular note, the cultural acceptance of K-pop-inspired hair coloring and styling is one of several significant and telling changes in consumer behavior, and this also leads to an increasing demand for salon products and services.

Right after the strong demand for hair coloring products, straightening and perming products are the second largest category, with a sizeable market share. Traditionally, hair straightening products have performed very well in the Indonesian market, as Indonesian women tend to have a strong preference for straight hair.

Muhamad Chatib Basri, Chairman of the Investment Coordinating Board of the Republic of Indonesia, notes “Even though they [foreign investors] have to deal with the problems of bureaucracy and infrastructure, the returns are higher than if you invest in Europe and the U.S. now.”

Radiating consumer confidence and trusted by foreign investors, Indonesia offers a vast potential for the cosmetics and hair care industry. Get a heads-up on this market with this comprehensive report from Kline: Salon Hair Care Global Series: Market Analysis and Opportunities.

According to Kline’s soon to be published Global Professional Pest Management Markets for Pesticides: Market Analysis and Opportunities, total non-agricultural pest control service sales in China in 2012 alone are estimated at CNY 3 billion to CNY 4 billion (USD  476 million to USD 635 million), with pesticides sales expected to grow annually by 6.7%.

With a view to improving product quality, public health, and environmental safety, China’s Pesticide Registration Law, overseen by China’s Institute for the Control of Agrochemicals, Ministry of Agriculture (ICAMA) is continuously imposing stricter standards with upgraded implementations expected in the second quarter of 2013. The impending directives with potentially the most impact concern the withdrawal of temporary pesticide registration certificates, and the mandating of formal pesticide registration certificates, which requires up to CNY 1 million (USD 158,647) per new product (a five-fold cost increase) and a certification period of up to two years.

The effect of this will lead to market consolidations or the shutting down of smaller pesticide control operators (PCO) with larger, better resourced players gaining more market share through better product development ability and economies of scale.

Presently, the vast majority of PCO firms in China are small local players with annual service revenues below CNY 300,000 (USD 47,594). Most of these firms are run by ex-employees of larger pest control operators, or from the Ministry of Health’s Office of National Patriotic Health Campaign Committee’s (PHCC) pest control teams. These small PCOs tend to service only one city, and serve smaller clients.

Larger PCOs are either foreign-owned such as market leader Ecolab, or Rentokil Initial, or local players, such as Shenzhen Jieke and MarsBro, who draw on strong government relationships.

Within the Chinese PCO market there is a trend towards non-chemical control alternatives and fewer sprays. Glue boards are used for cockroach and rodent control, especially in food processing areas due to food safety concerns. In populated areas, PCOs tend to employ bait stations to prevent non-target animals from mistakenly ingesting rodenticides. Similarly gel or granule products use is increasing for both their more environmentally-friendly aspect and their comparative efficiency given that the pesticide application area tends to be much smaller than liquid sprays, while achieving the same effect. More conventionally, pyrethroids, which are widely-used in the PCO market, continue to dominate the professional pest control market, due to their high effectiveness and low toxicity.

China is growing inwards and insisting upon higher standards. Needs are to be met and this vast market is cracking open. Assay opportunities and formulate diligent business-plans with Kline’s forthcoming Global Professional Pest Management Markets for Pesticides: Market Analysis and Opportunities.