Emerging economies spend big on up-market beauty products, by Euromonitor International
Emerging markets are not just upping their consumption of staple and mass beauty products but are spending more on premium brands too, according to new research from Euromonitor International.
Cosmetics and toiletries have long been benefiting from growth in markets with low penetration rates such as the emerging economies of Latin America, Eastern Europe and Asia-Pacific, generating high value gains through increased demand for low-priced essential items. Yet these markets are not just catching up in terms of consumption of necessities but are aspiring to the comfortable Western lifestyle by increasingly splashing out on up-market, prestige products. Conspicuous consumption is all about leaving the tough economic times of the recent past behind and reveling in newfound wealth. It is also a mentality that links price with efficacy, as historically the low-priced beauty products available on these markets were predominantly of substandard quality.
Given this, it is not surprising that all of the top ten most dynamic markets for premium cosmetics by per capita value sales are from fast-developing economies, with all except Hungary and the Czech Republic still below the global average for per-head disposable income. Romania tops the list, according to Euromonitor International's research, with growth of more than 250% between 2001 and 2005, and is expected to hold onto this position as its economy benefits from EU membership in 2007. That China ranks highly, in second place, is similarly expected as the country continues to be one of the world's premier economic hotspots. The country also counts among the 10 largest total markets for premium cosmetics globally. Other markets that are expected to generate dynamism in premium cosmetics into the longer term include other EU accession countries, such as Poland and Bulgaria; the Latin American superpowers, including Brazil and Mexico; and South Africa, with its fast emerging black middle class.
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