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The worldwide market for cosmetics in 2006 is estimated to have been more
than $200 billion (retail level). The total world value (at the chemical manufacturer’s
level) of the 2006 market for the cosmetic chemicals described in this report
is estimated at less than $10 billion. This estimate excludes natural soaps
(salts of tallow and coconut fatty acids), fragrances, solvents, and most filler
or bulking materials.
The following pie chart shows world sales of cosmetics at the retail level:
The average annual growth rates for consumption of cosmetic chemicals
on a value basis for 2006–2011 are expected to be 1.9% in North America,
1.9% in Western Europe, 15% in China and only about 0.5% in Japan. These growth
rates reflect the relative maturity of the markets in these areas. It is expected
that the high-growth regions of China, Russia, Brazil and India will gain greatly
in importance in the next five years. By 2011, China will be the largest market
worldwide on a volume basis. By 2011, Japan will lose its position as third-largest
on a value basis, as the value of the Chinese, Brazilian and Russian markets
increases.
There are a very large number of suppliers of cosmetic chemicals worldwide,
but about twenty major multinational companies control at least half of the
business. In most segments, between two and four companies dominate the market
in a given geographical region. The great majority of sales in North America
and Western Europe are directly to the cosmetics industry, but agents and distributors,
in addition to some small specialty formulators, still account for a significant
share. In Japan, distributors and specialty formulators play a much larger
role.
The growing need for higher-performance, higher-purity products, and data
documenting their safety and efficacy has improved the competitive position
of the large multinational companies. These companies have greater resources
available for R&D, technical service, and expensive, time-consuming health
and safety tests. They can also use these resources to supply the large multinational
cosmetic companies on a worldwide basis, further increasing their position
as the dominant suppliers to cosmetic companies.
Worldwide, several driving forces have emerged that have created key market
needs. These include human health and environmental regulations or issues (e.g.,
regulations requiring lower volatile organic solvent levels); the preferences
of a small but significant (and growing) segment of consumers for mild, natural,
and non-animal-based products; and a growing desire by increasingly sophisticated
consumers for ingredients with documented benefits. These issues have accounted
for much of the recent new product development work and are likely to determine
many of the future changes in the cosmetic chemical industry.
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