A targeted beauty approach pays off for brands
Brands focusing purely on the beauty sector, rather than diversifying into other areas, are more likely to fare well in today’s competitive market, according to market analyst firm Euromonitor International.
Being able to concentrate research and development (R&D) resources on product innovation as a result of their more targeted focus gives these brands a competitive edge, according to the research body.
Oru Mohiuddin, beauty and personal care senior research analyst at Euromonitor, said: “It’s becoming more and more clear that manufacturers with a more streamlined beauty focus are in a better position to take advantage of the growth potential in the market.”
Mohiuddin added that: “This is because they are able to dedicate more resources, in proportional terms, to R&D, to drive growth through product sophistication.”
Euromonitor compared L'Oréal, which is known for its focus on research and development and saw a 5% growth in the first six months of 2013, with Procter & Gamble.
The latter, which also has a presence in the homecare market, experienced a 1% loss in the first half of 2013, with Mohiuddi commenting that this could be attributed to the fact that “its resources are more diluted when it comes to investing in R&D.”
The outlook for the beauty and personal care industry for 2013 is, Euromonitor states, less positive than the figures for 2012 – a development set to make product innovation more crucial than ever.
Mohiuddin, explained that: “Emerging markets are slowing down and western markets continue to be volatile, which means it’s even more important to drive growth through product sophistication. Manufacturers will have to invest in R&D and try to develop new ingredients.”