Cosmeceuticals Put a Fresh Face on Cosmetics: IBISWorld Identifies a Growth Opportunity in a Mature Industry.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- While the $60.37 billion cosmetics industry is on track to decline 1.2 percent in 2009, the niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. of cosmeceuticals is expected to increase 7.7 percent, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. industry research firm IBISWorld. Now accounting for $3.5 billion in revenue, cosmeceuticals have become a prospective growth area for businesses operating in the mature cosmetics industry. "The development of new product categories like cosmeceuticals and dermocosmetics has grown considerably in the last five years, driven by America's obsession with anti-aging and wellness," said Toon van Beeck, senior analyst with IBISWorld. "Companies are taking the opportunity to manufacture more of these high-margin products which typically generate profits greater than the industry average of 10 percent." As a result of the burgeoning growth and demand for cosmeceuticals, retailers from department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. to big box stores have looked to shelve shelve v. shelved, shelv·ing, shelves v.tr. 1. To place or arrange on a shelf. 2. products like anti-wrinkle creams, bleaching agents and medicated medicated /med·i·cat·ed/ (med´i-kat?id) imbued with a medicinal substance. medicated contains a medicinal substance. lotions. The existence of these niche products means that small retailers like SkinCeuticals, Her Walk, and Dermelect Cosmeceuticals can enter and successfully operate in an environment that is exhibiting strong growth and observes less competitive pressures. Additionally, cosmeceuticals command a premium price because consumers perceive the ingredients as being expensive and uniquely manufactured, with research and development (R&D) accounting for the majority of costs. However, R&D only represents about two percent of the industry's cost structure, while the selling, general, and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. (mostly marketing) represent a staggering 21 percent. "Because the profit margins are higher on cosmeceuticals, companies have more money to spend on marketing," adds van Beeck. "Businesses must continually convince buyers of the product's benefits and break through competitive clutter to increase their sales." By 2011, IBISWorld predicts the industry will rise beyond $4 billion, and will continue to grow at near double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" rates for quite some time. Growth will continue to revolve around the perceived health advantages of cosmeceuticals in addition to the traditional cosmetic benefits. "Manufacturers and retailers will continue to fuel demand for cosmeceuticals by developing and marketing a steady stream of new products," said van Beeck. "New products in the pipeline present solid opportunities to bolster bottom lines and build customer loyalty, re-inventing the mature cosmetics industry." Additional links * Follow us on Twitter A Web site and service that lets users send short text messages from their cellphones to a group of friends. Launched in 2006, Twitter (www.twitter.com) was designed for people to broadcast their current activities and thoughts. : http://twitter.com/ibisworld * Cosmetics & Beauty Product Manufacturing: http://ibisworld.com/industry/retail.aspx?indid=499&chid=1 * Beauty, Cosmetics & Fragrance Stores: http://ibisworld.com/industry/default.aspx?indid=1055 * Global Toiletries toi·let·ry n. pl. toi·let·ries An article, such as toothpaste or a hairbrush, used in personal grooming or dressing. toiletries npl → artículos mpl de aseo (= and Cosmetics Manufacturing: http://ibisworld.com/globalindustry/default.aspx?indid=730&rcid=0 About IBISWorld, Inc. Recognized as the nation's most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every U.S. industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information visit www.ibisworld.com or call 1-800-330-3772. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion