Cosmetic Seminar 2012 - Kantar Worldpanel

© Kantar Worldpanel

Cosmetic Seminar 2012

Beauty the future - The Question of Growth -

Copyright© 2012 INTAGE Inc. All Rights Reserved. 2

Cosmetics Market in Japan

Buying behavior highlights

2011 sales 1,506.5 billion yen (around US$18B) twice the size of Korea, BUT a decrease of 6% vs 2010.

Average annual spending per woman 35,510yen (~US$430) & 17 items bought (Korea $420, 22 items!)

Top 3 channels: Drugstore 37%, mail order/Internet 21%, and supermarket 11%.

Development highlights :

Cream segment grew by 1.6% in value, 6.5% in unit Growth is contributed by the positive sales of ALL IN ONE type.

Growth also in lower-tier skincare, major manufactures all launched brand under 1000 yen.

In makeup categories, blush has increased for seven consecutive years; Mineral face makeup also growing; self segment especially shows a remarkable growth both in value and unit.

Korean cosmetics are now very popular in Japan; beauty mask especially and the secret behind the popularity is a wide range of items and reasonable pricing (~ 100 yen per mask).

NOTE: Cosmetics market referred to in this material includes the following category segments: Skincare, Makeup and Perfume.

Data source: Intage Japan


Taiwan: flat 2% $ growth

- Mass sector continues trading up through launch premium, same efforts made on counter sector

- Whitening function flat and anti-aging sector grow

- Micro cosmetic surgery getting popular - 8% of the 40’s now receiving the treatment on a regular base

3

China: 20+% $ growth

- Trading up brands on Tier 1 cities premiumlize my identity

- Building consumption journey on lower tier cities adding cosmetic items into the shopping basket: huge potential


Vietnam

- Quite a ride on the market in 2010 (30%+ growth) but 2011 down to flat (3%), we suspect it’s due to the impact of high inflation rate (18%) as low/mid income decline the buying

- Whitening definitely but also anti-aging benefit grows

- Traditional trade still the key channels and continue growth

4

Indonesia

- Beauty is fair skin and make them affordable so whitening and small sachet packs (photo as 8ml sachet whitening pack)

- Very mainstream dominate market, and the development is whitening also anti-aging function


5

How can I come back/continue the growth of beauty market?


6

•One Asia provides you many new consumers opportunity.

•Within mature markets, balance play on promotion and innovation support you the growth of consumers but both require good thinking on benefits/value balance.

• China market requires “trust” image building as a base, but the continuous investment on brand awareness and a break through of accessibility are critical.

•And you must live as one of the emerging Asia consumers to be able to ride on the whole journey of beauty me consumption growth!


CHINA : WAY TO THRIVE IN LOW TIER CITIES



Global View: China market is still full of opportunities despite we see the sign that economic growth is slowing down in 2012

8

Data Source: Europanel

-5

0

5

10

15

20

25

302009 2010 2011

FMCG Year On Year Value Growth Rate (%)


16%14% 14%

17%19% 18%

15%

2%

11%

15%

29%

23%

CHINA 4 Key Cities

(BJ/SH/GZ/CD)

A Cities

(Provincial

Capitals)

B Cities

(Prefecture-

level Cities)

C Cities

(County-level

Cities)

D Cities

(Counties)

TOTAL FMCG

COSMETICS

FMCG Value Growth Rate ( 2012Q1 Vs 2011Q1)

2012 China is still running: Low tier cities are next growing engine


If B+C+D city consumer spending matches A cities, annual opportunity equals…

RMB 877.6 Billion

For point of comparison, total Urban China’s FMCG spend was 1082.2 Billion RMB in 2011

growth rate (%)

13%

13%

12%

13%

17%

14%

Low tier cities will catch up top tier cities spending level in next 3 years if keep same growth rate

6,868

10,466

7,915

6,282

6,369

5,553

Urban CN

Top 4 Cities

A Cities

B Cities

C Cities

D Cities

Annual FMCG Spend (RMB) per HH


13.8 14.4

20.8 23.1

24.125.5

20.820.0

13.412.0

7.1 4.9

0

20

40

60

80

100

Captial Cities Low Tier Cities

6+

5 benefits

4 benefits

3 benefits

2 benefits

1 benefit

Buyer % in total skin care

In low tier cities, consumers primarily purchase for basic functions, like moisturizing and whitening.


4.5

0.50.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

52

w/e

20

10

-01

-01

52

w/e

20

10

-01

-29

52

w/e

20

10

-02

-26

52

w/e

20

10

-03

-26

52

w/e

20

10

-04

-23

52

w/e

20

10

-05

-21

52

w/e

20

10

-06

-18

52

w/e

20

10

-07

-16

52

w/e

20

10

-08

-13

52

w/e

20

10

-09

-10

52

w/e

20

10

-10

-08

52

w/e

20

10

-11

-05

52

w/e

20

10

-12

-03

52

w/e

20

10

-12

-31

52

w/e

20

11

-01

-28

52

w/e

20

11

-02

-25

52

w/e

20

11

-03

-25

52

w/e

20

11

-04

-22

52

w/e

20

11

-05

-20

52

w/e

20

11

-06

-17

52

w/e

20

11

-07

-15

52

w/e

20

11

-08

-12

52

w/e

20

11

-09

-09

52

w/e

20

11

-10

-07

52

w/e

20

11

-11

-04

52

w/e

20

11

-12

-02

52

w/e

20

11

-12

-30

Capital Cites

Low Tier Cities

B.B Cream Penetration (%)

Low tier city consumers catch up new product trend quickly…


“I get products information from friends, which influence me most”

“Advertizing is attractive” ranked as

least important factor for people chose store/products


17.2 15.2 19.5 16.423.0

18.9 23.7 17.312.2

8.3

26.5 2012.4

13.7 7.4

5.56.6 8.4

6.64.7

6.26.9 4.7

6.27

9.812.7

10.0

4.77.9 14.6 17.3 25.0

13.4 16.2 13.6 13.6 12.6

5.6

4 KEY CITIES A CITY B CITY C CITY D CITY

OTHERS

SPECIALIST STORE

DIRECT SALES

ONLINE

GROCERY

OVERSEA

GIFT

HYPERMARKET

SUPER/CVS/MINI

You will face much more complicated retailer environment in low tier cities. Specialist Store/ Direct Sales / Online play more important role where you can start the business.

Total cosmetics include skin care and make up

CHANNEL VALUE IMPORTANCE IN TOTAL COSMETICS BY CITY TIER in 2011


Low tier city is a big market, which you can’t ignore!

Develop basic function products on brand entry stage, but also take care growing sophisticated needs

Make your brand accessible: Multi- channel strategy including Specialty Shop / Online / Direct

Sales

Make your brand trustable: word of mouth maybe better than

advertisement


Cosmetic Seminar 2012 Welcome to Amazing Thailand! Are you from Korea? -Thailand Skin Care & Make Up Market Entry Plan-


Population

in Mil

GDP

in US Mil

GDP per Capita

in USD

GDP per Capita

in PPP USD

Thailand 67 264,323 3,951 8,072

Indonesia 231 546,865 2,364 4,180

Philippines 92 161,358 1,750 3,525

Vietnam 86 96,317 1,120 3,111

Myanmar 60 24,973 419 1,093

Malaysia 28 193,108 6,822 13,594

Cambodia 15 10,359 693 1,801

2010

Thailand is attractive market to many due to Relatively higher purchasing power than other ASEAN countries with sizable population

The PPP dollar takes into account differences in purchasing power of the US dollar in the countries. Take GDP per capita of Thailand and Singapore as example: even if the GDP per capita of Thailand is only around one-ninth that of Singapore ($3,951 compared to $36,631), if the purchasing power of the US dollar is taken into account, the GDP per capita of Thailand would be around one-sixth of Singapore ($8,072 compared to $49,766), because one US dollar in Thailand can buy more goods and services than one US dollar in Singapore.

Sources: ASEAN Finance and Macroeconomic Surveillance Database and IMF-World Economic Outlook April 2010


Thailand Cosmetic Market

Make up

4% Skin Care

8%

2011 vs.

2010*

Estimated Market Size In 2014**

15. 7 Bil THB 55 Bil THB

Sources: *Kantar Worldpanel Thailand Household Panel, ** Euromonitor International report September 2010


Major Channels in Thailand

Skin Care is revenue generator

for modern trade In urban hypermarkets

is major channel in Rural provision Stores

Make UP Department Store is

main channel for Premium

For Mass brand, Health & Beauty Store


Major Brands in Thailand Market

Skin Care is led by

International Brands like

Beiersdorf Unilever L’Oréal

Make Up Is led by

Local Brands like

ICC Better Way


Price Promotion

Distribution Visibility

Product Line

Advertisement Awareness

55 Countries including partners

How to sales


Skin type claimed by Korean Ladies

1 10 18 26 3 38 4

Very Oily Oily Normal Dry Very Dry Mixed Sensitive

40 9.3 21 2.3 16.5 11

Oily Normal to Oily Normal Nomarl to Dry Dry Mixed

Skin type claim by Thai Ladies

Almost half of Thai ladies feel that their skin is oily or Normal to Oily

Sources: *Kantar Worldpanel Usage Korea, 2008 ** Kantar Worldpanel Usage Thailand, 2008


66

61

45

43

41

36

34

33

25

18

15

54

47

36

18

29

37

29

22

17

13

29

Email via computer (laptop, desktop)

Chat on internet/mobile phone

SMS/MMS via mobile phone

Use of Facebook

Posting comments/opinion on web boards

Use of Hi5

Email via mobile phone

Own a blog

Receiving and sending messages on Twitter

Chat via BB

Not interested in the above communication methods

2010 2009

Source: TNS-RI 2011 Consumer Trend Survey

Thais would like to be up to trend and love to chat by internet/mobile phone


Construction boom since 2010 due to low interest and high consumer confidence

Large Scale Shopping Mall

Community Mall Store Format Expansion


Some of Korean cosmetic brands are more expensive than Mistine and at similar price range as some other Thai brands

Avearge Price per Unit in 2011 (Unit: THB)

243 236

299

7490

225245

165

243

EtudeHouse

Skin Food BSC Sheene' Mistine Giffarine OrientalPrincess

Maybelline Revlon

Sources: Kantar Worldpanel Thailand


Price Affordable Price

w/ Acceptable Quality

Distribution Community Mall/Shopping Mall/

Store format Extension

Awareness Visitor to Korea/

Internet/SNS

Product Line Skin Type/Whitening/

Anti-Aging/Packing

Thailand Market


Korean Body Care Market Trend – SMART Consumer



Category Definition

28

*(%) 11년 Q4 금액 중요도

Total Body Care

Moisturizer

56.1%

Body Washing

43.9%

Reg. Moisturizer

51.4%

Cleanser

26.3%

Soap

12.9%

• Firming Care • Bust Care • Sliming Care

Functional Moisturizer

4.5%

• Moisturizer • Hand Care • Foot Care

Scrub

2.1%

Hand Wash

2.4%


The growth of body care products focused on 2 segments: Moisturizers and Cleansers

29

50.3 54.3 56.1

23.324.2

26.3

19.515.9 12.9

2009 2010 2011

Hand Wash

Scrub

Soap

Cleanser

Moisturizer

구매액%, 전체 바디 시장(선물포함)

Value Importance(%) Growth(%) by Segment

3.1 6.6

11.7

-16.7

Total Body Moisturizer Cleanser Soap


30

Keywords 2011

S

M

A

R

T

elective Channel

ich Baby

oisturizer in Growth

ge 2030

exture change


31

Selective Channel SMART


Body Moisturizers are being used individually however, Body Cleansers are being shared with family

2012-08-01

32

Department

St., 5.9

One

Brandshop,

6.3

Internet

Mall, 31

Hypermaket

35.7

구매액%, 직접구매, 2011년

Direct Sales,

5.6

Supermarket,

11.2

Internet

Mall, 24

Hypermaket,

43.7

Importance of Moisturizer(%) Importance of Cleanser(%)


Buyers tend to spend the most internet mall for Body products. They spent the least at brand shops for Body Moisturizer and supermarket for Body Cleansers, respectively.

2012-08-01

33 직접구매, 2011년

Avg. Price/Unit of Moisturizer (Won) Avg. Price/Unit of Cleanser (Won)

32,879

25,295

35,447

16,908

TOTALMoisturizer

Hypermaket Internet Mall One Brandshop

16,253

10,494

19,879

19,245

Total Cleanser Hypermaket Internet Mall Supermarket


34

Moisturizer in Growth SMART


The number of body care products buyers are decreasing, and yet the overall money spent on them is steadily going up as each consumer spends more than before.

2012-08-01

35

44.947.2

50.354.3

56.1

2007 2008 2009 2010 2011

Importance(%) Penetration(%) Avg.Price/Unit(KRW)

구매액%/구매자%/가격(원), 바디 보습(선물포함)


36

Age 2030 SMART


The major buyers of Body moisturizers are the people in their 20s to 30s

37

Penetration (%)

바디 보습, 직접구매 전체 바디 보습 구매경험율 대비 각 연령별 구매경험율INDEX

40.1

51.0

38.2

21.5

47.4

TOTAL 20s 30s 40s 50s

INDEX 118 127 95 54


These two groups both prefer Internet malls, and the 20s mostly go one brand shops

38

2012-08-01 구매액%, 바디 보습, 직접구매

Channel Importance (%)

35.728.6

38.8 38.143.6

31.0 43.135.2

15.910.2

6.3

9.2 3.4

7.5 3.1

5.9

3.3 5.9

8.87.1

전체 20대 30대 40대 50대

Others

TV Homeshopping

Multi Brand shop

Specialty St.

Supermarket

Direcr Sales

Department St.

One brand shop

Internet Mall

Hypermarket

2030 buyers 4050 Buyers

Hyper- Market

Internet Mall One Brand Shop

Direct Sales Supermarket


39

Rich Baby SMART


The number of newborns does not go up rapidly as much as expected. Yet, the size of the baby goods market keeps growing.

2012-08-01

40

390,000

400,000

410,000

420,000

430,000

440,000

450,000

460,000

470,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

09년 1

0월

09년 1

1월

09년 1

2월

10년 1월

10년 2월

10년 3월

10년 4월

10년 5월

10년 6월

10년 7월

10년 8월

10년 9월

10년 1

0월

10년 1

1월

10년 1

2월

11년 1월

11년 2월

11년 3월

11년 4월

11년 5월

11년 6월

11년 7월

11년 8월

11년 9월

11년 1

0월

11년 1

1월

11년 1

2월

Value of Diaper Maket(Mill.Won)

#of Newborns

출처: (1)통계청, 2011년 인구동향 (2) 칸타월드패널 베이비 패널 2011Q4


Body care market for babies shows healthy growths as Buyers spend more money on premium products.

41

2012-08-01

Consumer Behavior INDEX**

2009 2010 2011

Total Baby Body

Baby Moisturizer

Baby Cleanser

Value Trend (Mill.Won)*

2009 2010 2011

Penetration(%) Frequency

Vol/Occ Avg.Price/Unit

유아용 바디, 직접구매 **09년 각 지표 대비 해당 기간 지표 Index

100


42

Texture Change SMART


Non lotion type of body moisturizers show higher growth than lotions, which have dominated the market so far.

2012-08-01

43

36.3 41.5 42.6

63.7 58.5 57.4

2009 2010 2011

Non Lotion/Milk

Lotion/Milk

구매액%, 바디 보습, 직접구매 ‘로션/밀크 아님’ 포함 유형: 크림, 오일, 에센스/세럼, 젤 기타

Importance by Type(Val%) 10 Vs. 11

GR% of Total Body

+10.6%

10 Vs. 11 GR% of Lotion/Milk

+8.6%

10 Vs. 11

non lotion/Milk

+13.4%


Oil and essence has contributed to growth of non lotion type

2012-08-01

44

10.6 8.6 7.6

25.7

21.0

0.7

TOTAL Body Lotion/Milk Cream Oil Essence/Oil Gel

57.4

27.9

5.02.23.2

2011

Others

Gel

Essence/Serum

Oil

Cream

Lotion/Milk

Importance by Regimen (Val%) Growth% by Regimen (Val%)

구매액%, 바디 보습, 직접구매


45

Strategy toward further growth in Body care

Considering new texture type to offer appeal young consumers

Selective Channel

Rich Baby

Moisturizer in Growth

Age 2030

Texture change

Considering different channel strategies in Moisture and Cleanser

Considering launching add-valued products in Moisture

Focusing on on-line and Brand Shop in order to capture 20s&30s.

Considering product line extension of Baby products


Korean Cosmetic Market Trend – SMART Consumer

Cosmetics Seminar 2012


48

Keywords 2011

S

M

A

R

T

elective Choice

e-applicable Sun

ale Grooming

qua

ipping Point


49

Selective Choice SMART


“Value-driven Consumption” trend was reflected in the cross-segment purchase growth, and the market became increasingly driven by Smart Buyers.

50

14% 5.6%

38.5%

25%

98.6% (Total Market Penetration%)

3.8%

Luxury

6.7%

Brandshop

10.5%

Reg. Mass

Cosmetics Market Penetration 2011 (%)

Total Cosmetics, Buyer.

Cross-segment Purchase


Widespread of SMART Shopping behavior led to an increase in Luxury buyers, but decrease in Avg. purchase amount; purchases became more focused around

Functional Care products.

58

61

64

2009 2010 2011

`

7.65

7.41

7.29

2009 2010 2011

`

Purchase in Luxury Segment

► Luxury Penetration (%)

► Luxury Avg. Vol/Buyer (Unit)

Facial Mask

Cream

Essence

Lip Makeup

Base Makeup

+16%

+13%

+11%

+9%

+4%

Total Cosmetics, Luxury Segment, Buyer & Volume.


52

Male Grooming SMART


60% of Men typically spends around 100,000 KRW in 6 months.

54

28%

31%

17%

9%

5%

10%Under 50K KRW

60~100K KRW

110~150K KRW

160~200K KRW

210~250K KRW

More than 250K KRW

Avg. of KRW129,000 Spending in 6 Months

30s KRW139,000

40s KRW131,000

20s KRW116,000

Avg Spending in Personal & Cosmetics

Male Grooming Omnibus Survey 2010. 20~40Yrs.


55

Aqua

SMART


Aqua is the 3rd biggest benefit after Anti-aging and Moisture,

and It is the Fastest Growing of them all.

56

35%

19%

12%

9%

3%

2%

2%

8%

2%7% 1%

Antiaging

Moisture

Aqua

Whitening

Pore

Acne

Exfoliate

Anti-UV

Nutrition

Multi-function

Others

+25%

Skin Care by Benefit

Total Skin Care, Value, Exc. gifts & giveaways..


Aqua’s growth was attributed from rapid Buyer Inflow, which in part was

switched from Moisture a benefit of similar nature.

57

Penetration (%)

7

12

17

22

27

32

Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11

Aqua & Moisture Buyer Trend

MOISTURE Annual GR%

-2%

AQUA Annual GR%

+25%

Aqua & Moisture, Buyer, Exc. gifts & giveaways..


58

Re-applicable Sun SMART


44%

56%

Sun Care

UV-block

Makeup

Sun market is rapidly growing through a steady buyer inflow.

59

Sun Buyer in Steady Growth

Penetration (%)

69% 73%

75%

Sun Market Composition

Designed primarily for UV-block benefit, and comes in many different forms, with or without color

Designed primarily for covering facial skin imperfection, but also has UV-block benefit

Sun Care & UV-block Makeup.


UV-Block Makeup

Sun Care

Sun market is being driven Skin Care Sun

2012-08-01

60

+8%

-1%

Sun Market Penetration Change

27%

25%

2011 Penetration

+2%

26%

Sun Care & UV-block Makeup.


61

Tipping Point SMART


Cosmetics market growth is slowing down

62

-2

0

2

4

6

8

10

12

14

16

18

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11

Aqua

Y-o-Y Growth Trend (%)

Growth vs. 10Q4

Stagnation

Cosmetics market

evaded a hit from

the economic

downturn in 2009

Cosmetics Market Growth Trend

Total Cosmetics.


Brandshop Promotion (%)

Cosmetics market evaded a hit from the economic downturn in 2009… But with its growth slowing down in 2011, Brandshop launched into “Price War” to attract more buyers in 2012.

2012-08-01

63

0

0.5

1

1.5

2

2.5

3

3.5

39

40

41

42

43

44

45

46

47

Q1/09 Q2/09 Q3/09 Q4/09

Economic Downturn in 2009

★ Brandshop buyer increase ★ Luxury buyer increase through Kiehl’s

0

5

10

15

20

25

30

35

40

45

50

Q1/11 Q2/11 Q3/11 Q4/11 Q1/12

Economic Downturn in 2012

★ Promotion-driven buyer inflow to Brandshop ★ “Price War” within the Brandshop segment

Brandshop

Kiehl’s

Penetration (%)

Total Cosmetics.

Cosmetics Market Growth Trend

Cosmetic Seminar 2012 - Kantar Worldpanel

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