Essay About Traditional Businesses And Global Beauty Industry

The Beautification of the Ageing Baby
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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 worlds 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. Japans 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 LOreal, 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.