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In: Economics

How does geography affect the emergence of the organic cosmetics industry?

How does geography affect the emergence of the organic cosmetics industry?

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Expert Solution

As far as the geographic dimension is concerned, this market can be divided into leading regions-whose share of global revenues is most important-and peripheral regions, whose share is very small. The following regions stand out among the former with the highest global revenue shares: North America, Latin America, Asia-Pacific and Western Europe. The cosmetic markets of the BRIC countries (Brasil, Russia, India, China) have developed very rapidly since the turn of the century. There the markets for beauty and personal care gradually develop and thereby contribute significantly to the overall growth of the global economy.

Such four countries alone accounted for 21% of the global beauty industry in 2010 and their share is projected to grow to 25% of the overall market size in 2015 Most of the major foreign cosmetics manufacturers are currently concentrating on increasing their presence in the BRIC's

Asia-Pacific is the world's second-largest market for cosmetic products and also remains a potential market for organic skin care products. In the forecast period the Asia-Pacific region is expected to see the fastest growth. The driving force for organic skin care in this area is an aging population and an growing number of millennials, with more working women. China has dominated the market studied in Asia-Pacific, led by Japan, and others.

The global demand for the organic skin care product is highly fragmented. L'Oreal is the industry leader in skincare products, led by Unilever, Procter & Gamble, Johnson & Johnson, Estee Lauder, Beiersdorf and others. Mainly since top brands such as Procter & Gamble (P&G), Unilever and Johnson & Johnson have very little presence in the organic and natural product market, the big organic skin care brands differ marginally from the overall cosmetic field.


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