The cosmetics market - France

1.2 The global cosmetics market

The global cosmetics market is valued at over $*** billion in **** according to Grand View Research, and is expected to continue growing at an annual rate of *.*% in the years ahead. This gives us the following estimates:

World cosmetics market World, ****-****, in billions of dollars Source: Grand View Research * forecasts

Historically, the market is doing well, recording the following annual growth rates in recent years according to market leader L'Oréal: *.*% in ****, *.*% in **** and *.**% in ****. Despite a drop in growth in the context of the global pandemic in ****, the market has picked up again in **** to record growth of *%.

Annual growth rates for cosmetics World, ****-**** Source: ****

According to Grand View Research, the Asian market will be the leading market in terms of consumption, accounting for around **% of global consumption in ****. This is due to the large number of people living in the region, the development of the Asian middle classes, notably in China, and the cosmetics market in certain countries, such as Korea, which has been expanding in recent years.

The U.S. market, meanwhile, is also likely to see strong growth, with an expected CAGR of *.*% over the ****-**** period. The market is driven by a particular focus on ...

1.3 Europe, the world market leader

In ****, the European cosmetics market is estimated at ** billion euros. [***]

European cosmetics markets Europe, ****, in billions of euros Source: ****

The most buoyant segments in the European market are :

Skin care and toiletries Hair care Fragrance Make-up

The weights of these different segments are represented in the graph below, with the skin care segment in first place, followed by toiletries and hair care products.

Market size of cosmetics sub-segments Europe, ****, in billions of euros Source: ****

The global market is particularly concentrated, with * players alone accounting for over **% of the global market: L'Oréal (***). [***]

Cosmetics production in Europe represents * million jobs, including over ***,*** direct employees. *.** billion euros are dedicated to research in the sector. [***]

France is the country with the most SMEs in the cosmetics sector, with over *,*** companies in ****, followed by Poland and Italy.

Number of SMEs in the cosmetics market by country Europe, ****, in number of units Source: ****

1.4 France, a leader in European and global markets

The French cosmetics industry benefits from strong foreign demand. French cosmetics exports will reach $**.* billion by ****. Roughly three-quarters of the sector's exports will be for skincare and fragrances.

While French exports of cosmetics are destined for countries all over the world, exports to Asian markets are particularly strong exports to Asian and North American markets are the most dynamic. Most French exports go to the United States, followed by Germany, China and Spain.

Main export destinations for cosmetics France, ****, in Source: ****

Imports amounted to * billion euros in ****, giving a very large trade balance surplus of **.* billion euros in value for the year.

1.5 The impact of COVID-19 on the cosmetics market

Perfumes and color cosmetics have seen a sharp decline in ****, but overall demand for beauty products remains strong, as consumers turn instead to the skincare, hair care and personal care categories in ****, all of which are less disrupted by new Covid-** routines and lend themselves well to online discovery and purchase.gories in **** (***), all of which are less disrupted by the new Covid-** routines and lend themselves well to online discovery and purchase. Covid-** has transformed not only the cosmetics market in ****, but also the habits of both men and women, in more or less lasting ways. [***]

The main transformations in this market during the crisis are as follows:

less make-up, more skincare products increasingly digital distribution channels a growing focus on natural products

However, according to the same McKinsey report published at the end of ****, the beauty industry is expected to regain its dynamism in ****, faster than the fashion industry, which is not expected to return to growth until ****. The recovery will be led by China, where sales have already rebounded. [***]

In the graph below, we can clearly see the decline of the make-up and perfume segments, while the skincare and hygiene segments are on the rise.

CAGR for cosmetics ...

2.1 Cosmetics consumption in France

Almost all women are consumers of cosmetics, which is not necessarily the case for men. Around **% of women say they have already used a common cosmetic product (***), while the penetration rate of cosmetics among men was only **% in ****. [***] Yet products for men are booming, as we'll see in the rest of the study.

Beauty and skincare products, as well as fragrances, account for the lion's share of sales, **% and **% respectively. [***]

Breakdown of cosmetics sales by category France, ****, in Source: ****

A study conducted by IFOP also reveals the rate of use of each product by women, bearing in mind that the variety on offer is greater for them than for men. Facial and body care and hygiene products are the most frequently used, with around **% of women saying they currently use these products.

Rate of cosmetics use by women France, ****, in Source: ****

On average, French women spend ** minutes cleaning and moisturizing their face, ** minutes putting on make-up in the morning and ** minutes removing make-up in the evening. They use * products on average every day, compared to a worldwide average of * products. Mascara and moisturizer are respectively the make-up and cosmetics products they use most every day. [***]

2.2 End consumers increasingly sensitive to product composition

Consumers are increasingly wary of the cosmetics and food industries, and are paying more and more attention to product quality and the sustainability of the value chain. The Yuka start-up responds to consumers' need for transparency by, for example, enabling cosmetics and food products to be scanned and classified according to their harmfulness to the body. It had ** million users by January ****. This application recommends products that are better for your health.

Buying beauty products guided by transparency France, ****, in % Source: ****

According to a survey conducted by Klarna in February ****, the French are increasingly demanding transparency from beauty companies (***). In addition, **% of those surveyed said they buy and use natural and organic products. This trend is on the rise, as the new generations are the ones who use the most products in this category.

Share of consumers using natural and organic beauty products France, ****, in Source: ****

2.3 The development of "home-made" products

Alongside the trend for organic products, the fashion for "homemade" cosmetics is attracting more and more consumers, and represents a new threat to traditional players in the cosmetics industry [***]. numerous beauty blogs and YouTube channels promote this "Do It Yourself" practice, inviting users to master the manufacture of their own products and skincare products. This trend has been reinforced by the pandemic, which forced many consumers to stay at home. according to research firm Toluna in an article for Valeurs Actuelles, **% of French people are now involved in "home-made" beauty.

This trend is benefiting new players, particularly in the sale of raw materials used to make beauty and skincare products. Aroma-Zone is the market leader in this area, and its extensive expansion in France bears witness to this new trend. In ****, the company will have achieved sales of ** million euros, the vast majority of which will come from e-commerce (***). [***]

Aroma-Zone sales France, ****, in millions of euros Source: ****

2.4 Men's cosmetics market on the rise

According to a report by Persistence Market Research, the global market for men's skin care products is expected to grow at a compound annual growth rate of *% between **** and ****. The following global estimates can be provided:

Evolution of the global men's cosmetics market World, ****-****, in millions of euros Source: ****

In France, between **** and ****, sales of men's skin care products rose by *.*%, reaching **.* billion euros. This corresponds to a volume increase of *.*%, with sales of *.* million units. [***]

This segment of the largest cosmetics market is still small, with a low penetration rate (***), but the rise augurs a promising future for a market with great potential, which the major brands have built on in recent years. [***]

Breakdown of the men's cosmetics market France, ****, in % [LSA conso Source: ****

Facial care accounts for the vast majority of this growing market, but it's the beard care segment that has grown the most in ****, according to LSA conso. Sales have thus increased by **% between **** and ****, driving growth in the men's cosmetics market, while facial care is down by around *%. [***]

The market is dominated by L'Oréal Men Expert, with **% market share, followed by Nivea Men (***).

Men's cosmetics market share France, ****, in Source: ****

3.1 A fragmented market with an international reputation

A dense industrial fabric fueled by an international reputation

France has a reputation for excellence in terms of know-how and product quality in the cosmetics production sector[***]

On the one hand, subsidiaries of major groups with large production sites and R&D centers, such as L'Oréal and Pierre Fabre, both leaders in the dermo-cosmetics sector. On the other hand, a multitude of SMEs and ETIs with between ** and *** employees, working in particular as subcontractors for major brands and private labels, such as Lorcos, Laboratoires Prevost and Alpol.

A fragmented market, with players grouped geographically into competitive clusters

Changing demand for healthier, more natural products is driving manufacturers to innovate at a rapid pace, as illustrated by the Réotier brand developed by L'Occitane en Provence, named after the Alpine village where the spring water used to make these products is drawn.

According to LSA conso , French cosmetics manufacturing is supported by a dense industrial fabric of over *,*** companies .

The cosmetics manufacturing market is particularly fragmented, and most of its players have joined forces within the Cosmetic Valley and Parfums Arômes Senteurs Saveurs competitiveness clusters. Cosmetic Valley, a technology park specializing in the production of cosmetics in Chartres, is home ...

3.2 Specialized players bound by demanding specifications

In addition to the production subsidiaries of major groups, whose business is sustained and boosted by the brand's image, the many industrial cosmetics manufacturers who subcontract on behalf of the various brands and distributors are bound by ever more demanding, rapidly evolving specifications.in addition, the many industrial cosmetics manufacturers who subcontract on behalf of the various brands and distributors are bound by ever more demanding, rapidly evolving specifications, requiring production to be highly adaptable to demand. For most market players, this means :

Expertise or even specialization, new or historically built up, in a particular type of cosmetic product or in a particular stage of product shaping. This is the case for Alkos Cosmétiques, which supplies make-up pencils for major luxury brands, from the design of the pencil lead to the packaging of the product. Other companies include Technature which has rapidly established itself as a leader in peel-off masks and white marks in general. Total control over the entire industrial process to meet customer requirements. This presupposes geographical proximity of the various production sites and the development of solid skills in the various stages of production, from design to product packaging, including the production of the various components prior ...

3.3 Investments in innovation and modernization of production tools

Whether they are subsidiaries of major groups or SME subcontractors for distributor companies, all market players, bound by the requirements mentioned above, logically focus their biggest investments on two key competitive factors:

Innovation and R&D, enabling them to offer a flexible, tailor-made product range, adapted to distributors' requirements and evolving with end-customer demand[***] The efficiency and modernity of production tools: faced with ever more demanding and fluctuating demand, production facilities need to be at the cutting edge of technology, capable of producing large quantities of products very quickly, while guaranteeing increasingly closely monitored quality. The manufacturer SICAF, which was looking to double its production capacity by ****, has invested nearly * million euros in the construction of new offices and a manufacturing site comprising * new packaging lines, in addition to the existing **. [***]

This is also the case for manufacturer Technature, whose production site was ravaged in ****, which has invested heavily in the construction of a new **** m² production site. Technature sought to specialize its two production sites, with the historic site focusing on powders, while the new one would be dedicated to white cosmetics. To coordinate the two activities, a *,*** m* logistics platform was also built.

3.4 Cosmetics production

The costs

The cost of the cosmetic shapingprocess depends on a number of factors. The nature of the formula chosen is essential, since it will determine a series of factors influencing the price charged by the shaper:

The choice of raw materials; The choice of natural or organic products; The quality of the raw materials selected; Choice of supply chain (***).

The production price of the cosmetic products thus manufactured also depends on factors such as the R&D effort involved, and the manufacturing minimums below which it is unprofitable for a subcontractor to sell.to these must be added a series of operational costs (***) which influence the price charged by the shaper to the end customer.

Particularly noteworthy is the rise in the price of essential oils, driven in particular by a steady rise in the price of argan oil. In France, in April ****, producer prices for essential oils were **% higher than in ****.

Producer price index for essential oils France, ****-****, index base *** in **** Source: ****

Subcontracting for shaping involves a production process developed by a subcontractor, or shaper, on behalf of a customer who will handle the marketing of the finished product and the rest of the logistical and strategic operations ...

3.5 A decline in cosmetics sales in supermarkets and hypermarkets, which remain the leading distribution channel

Distribution of finished cosmetics is generally handled by the customer, not the manufacturer.

To do this, cosmetics groups rely on several distribution segments, targeting distinct customer groups depending on the nature and range of their products. Supermarkets and hypermarkets (***) account for around half of cosmetics salesof cosmetics sales, offering a full range of products, generally entry-level or mid-range, including beauty and skincare products as well as fragrances.

Selective distribution networks are the second most popular channel for cosmetics sales (***). Selective distribution is the most sensitive to fluctuations in tourist activity in France, given the marketing importance of this distribution network.

Pharmacies (***) represent an ideal distribution network for the growing market for pharmaceutical cosmetics such as "cosméceutiques" or "dermocosmetics", for which the advice of a pharmacist can be a valuable guide to their customers. [***]

Breakdown of cosmetics sales by distribution channel France, ****, in Source: ****

Since the Covid-** crisis, there has been a decline in sales of hygiene and beauty products in large and medium-sized food retailers in France. According to NielsenIQ, by ****, sales in this sector will have fallen by *.*% compared with ****. Deodorants, hair styling products, blades and razors, lip make-up and facial products are among the products that will lose ...

4.1 The different categories of cosmetics

Cosmetics converting covers all the products traditionally associated with the sector. In fact, groups using subcontractors for their finishing activities do so indiscriminately for different types of products:

Skincare products (***), which include moisturizers, anti-wrinkle creams, suncare products, hand and foot creams and body moisturizers; Make-up, including eyeshadows, foundations, powders, nail polishes, mascaras and lipsticks; Perfumes and eaux de toilette.

In addition to these products traditionally covered by the "cosmetics" appellation, there is a growing share of the pharmaceutical shaping market, due to the boom in "dermocosmetic" products. dermocosmetics" or "cosmeceuticals", where the product's pharmaceutical properties and efficacy are becoming essential. [***]

4.2 Innovations in cosmetics production

While the major cosmetics groups distinguish themselves by marketing top-of-the-range products, players in the shaping industry are trying to stand out by establishing themselves in niche markets, of which the following are a few examples:

The medical aesthetics sector

At a time when cosmetic surgery operations are costly and have recently been the subject of intense controversy calling into question their safety, soft technologies - laser, injections, hyaluronic acid, etc. - are becoming increasingly popular.

According to Clarivate data relayed byImcas (***), the market could reach **.* billion by ****. Indeed, despite a dip in growth in ****, the market has now regained momentum, posting growth of +**% in ****. In ****, growth is estimated at +*.*% compared with ****. The most dynamic segments are body contouring and injections. They will post respectable CAGRs of *.*% and *.*% over the ****-**** period. [***].

Organic cosmetics sector

The organic cosmetics segment remains dynamic, with growth driven by new consumer concerns about the environment, health and safety, and the potential dangers of synthetic products. Against a backdrop of inflation in ****, with organic product consumption declining, particularly in the agri-food sector, organic cosmetics are an exception, with remarkably stable sales. [***]

The men's cosmetics market

The men's cosmetics market represents a potential on which the biggest cosmetics ...

4.3 Consumer prices for cosmetics

With regard to the price of cosmetics in France more generally, the consumer price of beauty products has already been rising for several years according to Insee figures, and, like many consumer goods, has also undergone inflation in ****.

Consumer price index for cosmetics (***) France, ****-****, base *** in **** Source: ****

Consumer prices for body care products and articles, which since then have included all cosmetic products, are falling, a fall which is however tending to diminish, with prices holding steady at the level of prices charged in ****. [***]

Consumer price index for body care articles and products France, ****-****, index base *** in **** Source: ****

5.1 Regulations governing products from manufacture to distribution

Pre-marketing regulations

These are detailed by :

The French National Agency for the Safety of Medicines (***) and health products; Regulation (***) n°****/**** of the European Parliament and Council of November **, **** on cosmetic products since July **, ****; The French Public Health Code (***).

Before a cosmetic product can be marketed, it must be able to meet certain specific requirements. Even if prior authorization is not a prerequisite for marketing, you must declare your manufacturing activity to the Inspection Department of the French National Agency for the Safety of Medicines and Health Products (***).

The ANSM proposes a list of some of the elements that govern the manufacture of a cosmetic product:

- The composition of cosmetic products;

- Cosmetic product information file (***);

- Labeling rules for containers and packaging;

- Notification to the European Commission;

- Declaration of establishment to ANSM;

- Manufacturing.

Post-marketing regulations

As the ANSM states, " each cosmetic product placed on the market has an associated responsible person (***). This person may be a natural person or a legal entity. This person has many obligations and responsibilities, in particular :

That of ensuring that the cosmetic product placed on the market and with which it is associated is safe for human health when used under normal ...

6.1 Segmentation

The following segmentation of market players is used:

• Robertet
• Alkos Cosmétiques Groupe
• Alpol Cosmétiques
• Codexial Dermatologie
• Fareva
• Laboratoires Lebeau
• Laboratoires Prevost
• Laboratoire Science & Nature
• Lorcos
• Phytocosma
• SICAF
• Skinlys
• Technature
• Sephora
• Nocibé (Douglas Groupe)
• Marionnaud France
• Caudalie
• Pierre Fabre
• Galderma
• Weleda
• Revlon
• Groupe Rocher (Yves Rocher)
• Rituals Cosmetic
• Clarins Groupe
• Beiersdorf
• Berdoues
• Sisley
• Unbottled
• Rogé Cavaillès
• Cofatech
• Gilbert Groupe
• Aesop (L'Oréal groupe)
• Vabel Groupe - Sarbec Cosmetics
• La Prairie
• Anjac Health and Beauty
• Lorience Groupe
• Darphin (Estée Lauder)