A strong but short lasting crisis

French exports of cosmetic products declined sharply at the beginning of the fourth quarter of 2008 in a context of global crisis, but this situation did not last long, as recovery began in the second quarter of 2009 with a confirmation in the third quarter, notice the French Customs.

In 2008, French exports of cosmetics (perfumes, beauty products, hair preparations, other cosmetics) amounted to 9.6 billion Euros. They have grown steadily since 1998, with an annual average of 6.2%, against 4% for all French exports.

The dynamism of this sector results from its innovation capabilities, its high-end positioning, aging of population and rising living standards. In the context of recent crisis, the resilience of the French industry is also explained by "a successful positioning in emerging markets.".

Growth in emerging markets

According to Customs, "strong sales in cosmetics is explained in part by favorable positioning in fast growing emerging markets, while the EU plays a less important role in French exports (50% against 64%). Between 1998 and 2008, sales growth in emerging countries is two times faster than it is for all exports of cosmetics".

The share of emerging countries in total sales of cosmetics rose from 14.9% in 1998 to 24.6% in 2008, with particularly strong sales in China and Russia

A trend confirmed by Jean-Paul Agon, the Managing Director of the L’Oreal Group, in an interview to the French newspaper Le Monde, dated November 6: "In the ten coming years, our customers will mostly be Chinese, Indian, Brazilian or Indonesian." While the group L’Oreal already achieves 60% of its business outside Europe, this proportion is expected to rapidly rise to 90%, according to Jean-Paul Agon "Sooner or later sales catch up on demography", he claims.

État Libre d’Orange, une illustration du succès des jeunes marques françaises

Diversification of operators

The Department of Customs also notes that the number of exporting companies in the cosmetics industry evolves against the national trend: while the overall number of French exporters tends to decrease, the situation is quite different in the cosmetics industry where the number of companies venturing into international markets continues to grow. The companies concerned are mostly SME. "Companies exporting cosmetics are less concentrated than the national average. There are relatively more companies with 20 to 250 employees or with more than 250 employees in cosmetics than there is for the whole economy (41% of operators against 26%), with in both cases, about 80% of sales exported", notes the Department of Customs.

French exports, however, remain in the hands of large groups. "For perfumes, the top ten exporters account for almost 60% of sales, two large groups being behind a quarter of all sales. For beauty products, the top ten exporters draw half of all sales, including one fifth initiated by just one big group" say the Customs.

In the end, France retains its leading position in the global cosmetics industry, with nearly 25% market share worldwide, followed by Germany, the United States and the United Kingdom.