SKINCARE IN UK-2013

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AGENDA Market Overview

Broad Segments Facial Care Market Preferences of Men and Women in Facial Care Market Potential for Men Facial Care Market

Major Players Growth Drivers and Challenges PEST Analysis Porter’s Five Forces

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THE MARKET

Global Skincare Market -$82 Billion in 2013.

UK Skincare Market -$3.6 Billion- 4% of Global market in 2013.

UK Skincare Market estimated to reach $4.05 Billion in 2017.(3% CAGR- Optimistic from 2013).

UK Premium Skincare Market -$1.01 Billion- 24% contribution in 2013.

Category of Market Segments: Premium Market- Grew at 14.45% in

2013 from 2012. Mass Market- grew at 0.9% in 2013

from 2012.

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Premium Skincare Market

24%

Mass Skincare Market

76%

Market Share of Categories

BROAD SEGMENTS

Broad Segments: Body Care Facial Care Sun Care

Market Size in 2013: UK’s Facial Care Market in 2013-$ 1.86

Billion UK’s Body Care Market in 2013-$ 0.86

Billion UK’s Sun Care Market in 2013-$ 0.572

Billion

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Facial Care54%

Body Care24%

Hand care7%

Sun Care16%

Market Share of Segments

Skincare

Body Care Facial Care Sun Care

FACIAL CARE Contributes 53% of UK’s Skincare

Market. To reach $2.17 Billion in 2016-17 at

the CAGR of 4%. Categories

Men’s Facial Care Women’s Facial Care

Sub-Segments: Face moisturizers Face Cleansers Face Exfoliators Anti-aging creams Lip Care Eye Care

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Facial Moistur-

izers57%

Facial Cleansers

32%

Lip care11%

Women's Facial Care Market

Facial Moistur-izers/Exfolia-

tors35%

Facial Cleansers23%

Lip Balm20%

Facial wipes3%

Eye Creams8%

Anti-aging Creams10%

Men's Facial Care Market

GENDER PREFERENCES IN FACIAL CARE

Men’s Facial Care Products Preferences:

I. Face MoisturizersII. Facial CleansersIII. Facial ExfoliatorsIV. Anti- aging creamsV. Eye Care

Women’s Facial Care Products Preferences:

I. Anti-aging creamsII. Lip careIII. Acne treatmentsIV. Face cleansersV. Face moisturizersVI. Eye Care

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MARKET POTENTIAL OF MEN’S FACIAL CARE-2013

7

16-3

9

16-3

9

16-3

9

40-5

0

Abov

e 16

Abov

e 16

Face Moistur-izers

Facial Cleansers

Facial Exfo-liators

Anti-aging creams

Eye Cream Lip Creams

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

0.85

1.06

0.85

0.56

1.81

1.36

Realistic estimate - 20% of Men's Population consume-2013

Target Age Group/ Product Categories

Billion USD

MAJOR PLAYERS-SKINCARE

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Anti-Aging Cream for Women Facial Moisturizers/Exfoliators for Women

Men’s Skincare Players- Moisturizers /Exfoliators Eye Care Players

Lip Care Players

Sun Care Players

DRIVERS & CHALLENGES

Men's increasing awareness on facial care.

Aging Population – opportunity for anti-aging products to thrive in the market.

People with high income levels prefer natural skincare and organic products. Lot of scope for differentiation.

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High inflation in food and energy prices in all of UK.

Reactive attitude of male population to skincare products.

Recovery in the economy happening in jobs and not in wages.

Raising skepticism of women towards facial care products.

GROWTH DRIVERS

CHALLENGES

Reduced interest in soaps.

The rise in hypermarkets, discount stores has led to price deflation of the products, squeezing profits for retailers.

PEST ANALYSIS

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VAT has been increased to 20% in 2013 from 17.5%.

Parliamentary Elections are going to be held in 2015.Business Climate would depend on the Political Climate.

Skin Care Market in UK-2013

PoliticalP

GDP growth was 1.7% in 2013 from 0.2% in 2012.

GDI of Households has increased to $473.2 Billion in 2013 from approx. $465 billion in 2012.

Household Expenditure has increased from $397.95 Billion in 2012 to $405 Billion in 2013.

Savings ratio has decreased from 10% in 2012 to 6% in 2013 .

EconomicE Consumers going for

natural and organic skincare products are on the rise.

Consumers look more at value in a product before making a purchase decision.

Social S

Online forums like Social Media play a major role in influencing the buying decisions of the consumers.

E-commerce sales are growing at 31% compared to brick and mortar sales. 6% of the whole of Skincare market is from online sales.

Technological T

PORTER’S FIVE FORCES

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Bargaining Power of Suppliers

Bargaining Power of Consumers

Threat of Substitutes

Threats of New Entrants

Competitors Rivalry

Large Players invest heavily in R&D. They dictate the products to Suppliers.

Players are moving towards sustainable Supply Chain. Pressure on Suppliers to comply with the standards.

Consumers have a variety of choices. Bargaining power is low w.r.t prices but high w.r.t value.

It is inevitable to concentrate on the value proposition of the Products.

No natural alternatives are present for Skincare products in the market .

Private Label products from experts pose as alternatives for big brands.

This industry requires expertise for any new entrant to

sustain in the market. Marketing expenditure is huge.

Unilever-Simple, L’Oreal, Procter and Gamble spend heavily in R&D and Marketing.

Private Label Products form 40% of the retail sales and the contribution is on the rise .

Low

Moderate

Moderate

Moderate

High