Changing consumer preferences and fashion trends necessitated new products, and companies had to innovate.
(PRWEB) January 23, 2012
The Lipstick Manufacturing industry in the US has experienced long-lasting growth in the past five years. According to IBISWorld industry analyst Mary Gotass, “regardless of volatile consumer sentiment and disposable income, consumers still bought new lipstick. During the recession, consumers indulged themselves in smaller luxuries, such as lipstick, to lift their spirits. Then as the economy began to recover, they continued to buy new products to keep up with fashion trends. This growth did require effort from the manufacturers. Changing consumer preferences and fashion trends necessitated new products, and companies had to innovate”. From 2007 to 2012, industry revenue is expected to grow at an average annual rate of 2.8% to $2.1 billion. In 2012 alone, revenue will increase about 4.1% as consumer spending rises.
From 2012 to 2017, industry revenue will continue to remain lush. High disposable income and consumer sentiment will enable consumers to spend more on discretionary products such as cosmetics. In addition, the industry will continue to focus on innovation and new products will drive growth. “Profit margins will also rise since firms improved efficiency during the recession by cutting costs and as sales continue to increase”, added Gotaas. Although the industry experienced growing revenue, the industry has been consolidating. From 2007 to 2012, company numbers have decreased by about 1.4% per year to 69 companies. In order to gain more market in the saturated cosmetic market, larger companies have been acquiring smaller ones. As company numbers have dropped, employment numbers have followed. In the past five years, employment numbers have decreased an average 3.4% per year to $127.9 million.
Industry market share concentration measures the extent to which large companies dominate the industry. IBISWorld estimates that, in 2012, the top four industry participants will hold a combined share of about 73.8% of total industry revenue. The majority of market power is spread over a small number of operators. The level of industry concentration has been increasing over the past decade. While there are a number of small players in the industry specializing in product lines to serve niche markets, major players in the industry will continue to expand and gain greater market control. Major player L’Oreal, for example, has well-recognized brands in a variety of price points, including Maybelline, Lancome and Yves Saint Laurent. Other major players include Proctor & Gamble, Estee Lauder Companies and Revlon.
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Companies in this industry manufacture lipstick. Companies that make a wide variety of cosmetic products, however, only the manufacture of lipstick, primarily manufacture lipstick and lip stains are included within this industry (lip gloss and lip balm are excluded).
IBISWorld industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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