COSMETIC INDUSTRY

Cosmetic Industry

Cosmetic and personal care products used in Europe is a by far a vast majority of more than 500 million customers. These cosmetics include antiperspirants, fragrances, makeup and shampoo, soaps, sunscreens, and toothpaste. The use of these products is associated with improved healthy lifestyles and improves self-esteem

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Economic Overview

The European cosmetic market was valued at 77.6 billion Euros in 2017, this makes Europe the largest market in the world. Consequently, Germany has the largest market at 13.6 billion Euros, followed by France, the UK, Italy, and Spain respectively. In the same way, skin care and toiletries are the best selling products having sales of approximately 20 billion Euros in 2017. Additionally, retail sales for hair care products (14.8 billion), perfumes (11.9 billion) and decorative cosmetics (11.2 billion) follow.
The cosmetic industry also contributes significantly to Europe’s GDP. It is estimated that cosmetic manufactures contribute 11.05 billion Euros in GDP to Europe’s economy.  Additionally, indirect activities contributions to the European economy were estimated at 18.14 billion in GDP in 2015.

Social-economic Impact

It is also estimated through direct, indirect or induced employment, that the European cosmetic industry supports over 2 million jobs. Approximately 1.64 million workers are indirectly employed, 165,750 workers are directly employed while around 366,200 to 549,400 workers are induced employees in the European cosmetic industry. Moreover, slightly more than 5.1 billion Euros are paid in wages to direct employees and 12.0 billion paid in wages and salaries to those indirect employed in the supply chain for cosmetics.

 

Additionally, the wages earned contribute to at least 5.3 billion Euros in social security direct or indirect workers. The salaries also contribute to social growth as it is used to buy good and service completing the salary calculation cycle. Moreover, the number of females employed in the European cosmetic industry supersedes males with the workforce providing 61% females compared to 39% males.

The cosmetics value chain

The value chain in the cosmetic industry is divided into five different stages. The first stage is the input to production. These are companies responsible for the provision of raw materials to make cosmetic products. They include companies producing ingredients and packing components for the cosmetic products. Next is the manufacturing stage; companies engage in supporting activities such as accounting, business administration and legal services and produce a finished cosmetic product. Next, the product moves for distribution and/or wholesale. Finally, the product moves to retail sales and purchase of cosmetics. The end-customer later buys the product from selling channels like online stores, pharmacies, supermarkets or beauty salons.

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Science and Cosmetics

The cosmetic industry is driven by science and research. Moreover, cosmetic companies spend 5% of their sales on research. Additionally, 77 innovation facilities have been established in Europe to carry out research related to cosmetics. These centers focus on product development, market research, and legal and regulatory compliance. Development on antiperspirants, perfumes and skin-related technology is strong and take over 5 years of research and formulation to introduce a new product in the market.