The Beautification of the Ageing Baby

Analysts at Gikman Sachs estimate that the global beauty industry

is worth about US$100 billion a year and is growing at up to 7% a

year, more than twice the rate of the developed world's GDP. This

growth is being driven by richer, ageing baby-boomers and

increased discretionary income in the West, and by the growing

middle classes in developing countries. China, Russia and South

Korea are turning into huge markets. In India, sales of anti-ageing

creams are growing by 40% a year. Avon is expanding rapidly in

Eastern Europe and Russia as well as in South America. Brazil now

has more than 900 000 Avon Ladies.

Global competition in the market is becoming increasingly intense.

Unilever and Proctor & Gamble, facing maturity in many of their

traditional businesses, are devoting more resources to developing

global beauty brands. Luxury product manufacturers such as Dior,

Chanel and Yves St Laurent are moving into mainstream beauty

products and many of the global giants are growing by buying up

smaller brands. Japan's Kao have gone into the hair dye market by

buying John Frieda while Estée Lauder has acquired Stila, MAC and

Bobbi Brown, all of which are innovative and growing make-up

brands.

The traditional global beauty brands established by companies such

as L'Oreal, Arden and Rubenstein now have to fight hard in a global

market where traditionally they have earned hug margins and

enjoyed continuous growth for many years.