Cosmetics - Cosmetic Industry

Cosmetic Industry

The manufacture of cosmetics is currently dominated by a small number of multinational corporations that originated in the early 20th century, but the distribution and sale of cosmetics is spread among a wide range of different businesses. The market volume of the cosmetics industry in the US, Europe, and Japan is about EUR 70B/y, according to a 2005 publication. In Germany, the cosmetic industry generated sales of EUR 12.6 billion at retail sales, in 2008 which made of German cosmetic industry the 3rd in the world, after Japan and the United States. Also, it has been shown that in the same country, this industry has grown with nearly 5 percent in one year, from 2007 to 2008. The exports of Germany in this industry reached in 2008 EUR 5.8 billion whereas the imports of cosmetics totaled EUR 3 billion. The main countries that export cosmetics to Germany are France, Switzerland, the United States and Italy and they mainly consist of makeup and fragrances or perfumes for women.

The worldwide cosmetics and perfume industry currently generates an estimated annual turnover of US$170 billion (according to Eurostaf - May 2007). Europe is the leading market, representing approximately €63 billion, while sales in France reached €6.5 billion in 2006, according to FIPAR (Fédération des Industries de la Parfumerie - the French federation for the perfume industry). France is another country in which the cosmetic industry plays an important role, both nationally and internationally. Most products on whose label it is stated "Made in France" are valued on the international market. According to data from 2008, the cosmetic industry has risen constantly in France, for 40 consecutive years. In 2006, this industrial sector reached a record level of EUR 6.5 billion. Famous cosmetic brands produced in France include Vichy, Yves Saint Laurent, Yves Rocher and many others.

The Italian cosmetic industry is also an important player in the European cosmetic market. Although not as large as in other European countries, the cosmetic industry in Italy was estimated to reach EUR 9 billion in 2007. The Italian cosmetic industry is however dominated by hair and body products and not makeup as in many other European countries. In Italy, hair and body products make up approximately 30% of the cosmetic market. Makeup and facial care however are the first cosmetic products to be exported in the United States.

Due to the popularity of cosmetics, especially fragrances and perfumes, many designers who are not necessarily involved in the cosmetic industry came up with different perfumes carrying their names. Moreover, some actors and singers have their own perfume line (such as Celine Dion). The designer perfumes are, like any other designer products, the most expensive in the industry as the consumer pays not only for the product but also for the brand. Famous Italian fragrances are produced by Giorgio Armani, Dolce and Gabbana and so on.

Recently, Procter & Gamble, which sells CoverGirl and Dolce & Gabbana makeup, funded a study concluding that makeup makes women seem more competent. Due to the source of funding, the quality of this Boston University study comes into question.

The cosmetic industry worldwide seems to be continuously developing, now more than ever with the advent of the Internet companies. Many famous companies sell their cosmetic products online also in countries in which they do not have representatives.

Research on the email marketing of cosmetics to consumers suggests they are goal-oriented with email content that is seen as useful motivating them to visit a store to try the cosmetics or talk to sales representatives. Useful content included special sales offerings and new product information rather than makeup trends.