Kline study: Ethnic beauty market gives way to increased competition
PARSIPPANY, N.J. — The multicultural beauty market continues to outpace growth of the overall market for cosmetics and toiletries, posting a 3.7% increase in 2014, as many ethnic brands broaden their reach to target a wider audience, regardless of ethnicity, according to a report by global consulting and research firm Kline & Co.
According to Kline’s report, "Multicultural Beauty and Grooming Products: U.S. Market Analysis and Opportunities," rapidly growing ethnic populations have given way to intensified competition and catch multicultural beauty marketers breaking boundaries between general and multicultural beauty. On one end, there are such brands as Carol’s Daughter that are positioning away from being an exclusive ethnic brand to also target a broader audience, regardless of ethnicity. This holds particularly true in the natural personal care segment where ethnic hair brand Shea Moisture now is rebranding to become suitable for all consumers.
“This widening approach helps move multicultural brands beyond the ethnic section of the beauty aisle to sit side-by-side nationally advertised brands,” said Donna Barson, senior associate at Kline’s Consumer Products practice. “However, this audience expansion needs to be done without alienating long-time consumers who might feel deserted if they feel like their brand no longer speaks exclusively to them.”
Concurrently, mainstream brands continue to develop tactics to capture a growing percentage of the ethnic personal care market. While such mainstream brands as Revlon, Lancôme and CoverGirl have long reached ethnic consumers with the creative use of spokesmodels and targeted advertising, the approach for many brands has become even more savvy and genuine. Some marketers, including Estée Lauder and Shiseido, use beauty advisors who speak the language of the local ethnic community, whether it is Mandarin, Vietnamese or Spanish, to create a greater connection with these consumers. Some also launch products targeting certain ethnic groups in the United States that are simultaneously released in that group’s country of origin.
According to Kline, the movement of mainstream companies into the multicultural space will not only open possibilities of more M&A in the coming years, but it will also be beneficial for consumers as they will be provided with a wider array of products targeting their needs.
For smaller multicultural companies, this means a need to innovate in order to gain sales and create a niche for themselves or position themselves for a potential acquisition. In addition, the competition coming from the general market is also blurring the lines and having a challenging impact on the multicultural marketers, according to Kline.
During the forecast period through 2019, researchers project that the ethnic beauty market will continue to face intense competition from general cosmetic and toiletry brands, and the fine line between mainstream and multicultural markets will continue to blur. However, competition will give an incentive for a surge of innovative, quality products entering the market.