According to a new report from UK consulting firm EY, titled “Seeking sustainable growth: The luxury and cosmetics financial factbook 2015 edition,” the global cosmetics market has grown by 3.8% over the past 10 years to €181 billion.
 
The report also names L’Oréal as the largest luxury global brand, and predicts it will remain in that position, continuing to show continuous strong business growth as consumers seek higher quality and more innovative cosmetic products.
 
EY notes that the market’s stability over the past decade is due largely to consumer behavior around the need for cosmetics. Interest is now gaining on a focus on quality performance and perceived results, and consumers are open to new technology, more sophisticated dermocosmetic products and new retail distribution models. The research finds that the market is mainly supply-driven, and fuelled by innovation.
 
Demographics
The largest cosmetic good by type is the skin care market, according to EY, which accounts for 35% of total market share, followed by hair care at 23%. Makeup and fragrance make up the following two largest segments at 17% and 13% respectively. Hygiene items come in at 11%, while all other types make up 1%. In terms of growth rates, dermocosmetics comes in at 5.1%, followed by makeup at 5.0%. Most cosmetics are sold in the Asia/Pacific market, which represents 35% of the overall market. Western Europe comes in second at 22%, followed by North America at 21%. Latin America comes in with 12% of market share and Eastern Europe with 7%. Growth in Western Europe remains sluggish though, at a below average 3%. 
 
Top 7
He report states that L’Oréal continues to dominate the top seven brand retailers, and is larger than the rest of the top 7 put together, at €93 billion in market capitalization. Estée Lauder comes in second with market capitalization of nearly €29 billion and 2.5% growth. Beiersdorf is the third largest seller of cosmetics with a market capitalization of around €18 billion and just below median 2.3% growth. Coty comes in at number 4 with almost €7.5 billion and 1.8% growth. Shiseido tops off the top five with €6.7 billion and a WACC of 4.1%.