Article by: Perry Romanowski
As a cosmetic formulator or cosmetic industry entrepreneur, it is helpful to understand the market and where cosmetics are sold around the world. The challenge with market data is that it is difficult to collect and rarely given out for free. Companies like Euromonitor and IRI compile industry sales market data and typically sell them in expensive reports. But if you follow some of the industry magazines or dig up some other sources, you can find information that is relatively up to date. Here is some data about the cosmetic industry from 2012.
Size of the cosmetic market
Sales in the cosmetic industry were approximately $430 billion (US) dollars in 2012. To give you a sense of the size, the entire world economy is about $48 trillion (US). So while the cosmetic industry is large, it is only a small portion of the entire world economy. However, it is much bigger than industries like professional sports which is only about a $25 billion industry.
Who is buying the most?
In terms of percentage of sales, Asia-Pacific generates the most and Western Europe generates is in second. A complete list of the distribution of cosmetic sales is as follows.
- Asia-Pacific – 28%
- Western Europe – 23%
- North America – 18%
- Latin America – 18%
- Eastern Europe – 6%
- Middle East / Africa – 5%
- Australiasia – 2%
What cosmetics are people buying?
Another important thing to know about the cosmetic industry is how much of everything people are buying. If you are looking to get into the cosmetic industry it is a good idea to go where the money is. And right now, the money is in skin care products. Skin care cosmetics make up about $99 billion in sales. Hair care sales account for about $75 billion. Color cosmetics represent $54 billion and fragrances make up about $43 billion. The rest of the industry sales are made up of miscellaneous personal care products such as oral care and antiperspirant/deodorant.
While this overview gives you a sense of what people are buying, how much, and where, it is interesting to note that the distribution of sales is not equal across the world. The sales of skin care products in Japan are much higher than hair care products whereas in Latin America, the sales of hair care products are much higher than skin care. Different populations from around the world want different products. When you are formulating your cosmetics it is important to get local market data when deciding which type of cosmetic would best sell for your area.