Though salon demand waned, continued consumer purchases sustained revenue
Los Angeles, CA (PRWEB) May 09, 2012
The Nail Polish Manufacturing industry has benefitted from its products' small indulgence nature. Because nail polish represents a small portion of consumers' discretionary incomes, these purchases were not limited as drastically as many other consumer goods like apparel and shoes. Therefore, even when per capita disposable income fell 3.2% in 2009 – its first drop since 1991 – industry revenue only declined 0.6% and rebounded quickly the following year. “Consumers did shy away from salon visits, doing manicures and pedicures at home instead. As Americans flocked to drugstores instead of nail salons, the average purchase price of nail polish fell – professional-grade lacquers are typically more expensive than store-bought ones,” says IBISWorld industry analyst Nikoleta Panteva. As a result, industry profitability suffered in 2009. Still, revenue is expected to grow at an average annual rate of 2.3% over the five years to 2012, totaling $1.1 billion.
The export market has been a growing opportunity for industry operators. As major players have expanded their reach globally, demand for US-made nail polish has mounted. Furthermore, the depreciating US currency has made domestic goods less expensive and more attractive on the international market. Export values have grown over the past five years. This trend is likely to continue over the next five years as the dollar remains weak and global demand mounts. The Nail Polish Manufacturing industry carries a moderate level of market share concentration. The industry's top two firms are Coty Inc. and Revlon. The remaining share of industry revenue is split among small-scale manufacturing firms that typically produce a specialized polish or cater to a niche consumer base. Over the past five years, the industry's largest companies added to their dominance by acquiring growing or successful nail polish lines. For example, Revlon added the Mirage Cosmetics Company and its Sinful Colors brand of nail polishes. Sinful Colors had achieved rapid popularity growth from 2010 on. Additionally, Coty Inc. grew to achieve the industry's largest share of revenue in 2012 with its key additions of Sally Hansen and OPI.
Over the next five years, IBISWorld expects industry concentration to grow as the larger companies continue to leverage favorable economies of scale to acquire successful companies or brands to add to their nail care divisions. “As consumer purchasing power returns, salon visits will become more frequent. Additionally, shoppers will be more willing to spend on cosmetics. As a result, industry revenue is projected to grow,” continues Panteva. However, a recent investigation into the components of nail polish may force some companies to reformulate and rebrand their products to be safer for human use. This may cut into some players' profit margins because research and development undertakings can be costly. For more information, visit IBISWorld’s Nail Polish Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures nail polish. Nail polish is used as a cosmetic product that is applied to the nails for aesthetic purposes. Companies that manufacture nail polish typically do so alongside other cosmetic manufacturing.
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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