The proportion of women members of the so-called “ethnic minorities” - such as African Americans, Asians, Hispanics, and mixed-race people - is increasingly important in the United States and they are expected to become the majority around 2040. According to Kline & Company, the rapidly growing ethnic populations have given way to intensified competition among beauty brands.

Blurred boundaries

Some multicultural beauty marketers are trying to break boundaries between general and multicultural beauty. For instance, brands such as Carol’s Daughter are positioning away from being an exclusive ethnic brand to target a broader audience, regardless of ethnicity. This holds particularly true in the natural personal care segment where ethnic hair brand Shea Moisture is now 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,” comments 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 mainstream brands have long reached ethnic consumers via the use of spokesmodels and targeted advertising, many brands now 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. Thanks to globalisation, some also launch products targeting certain ethnic groups in the United States that are simultaneously released in that group’s country of origin.

Smaller companies need to innovate

According to Kline, the movement of mainstream companies into the multicultural space will not only open possibilities of more mergers and acquisitions 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. Smaller multicultural companies will also need to innovate in order to gain sales and create a niche for themselves or position themselves for a potential acquisition.

In the Multicultural Beauty and Grooming Products: U.S. Market Analysis and Opportunities’ report, Kline forecasts the ethnic beauty market will continue to face intensified competition from general cosmetic and toiletry brands until the end of the forecast period in 2019, and the fine line between mainstream and multicultural markets will continue to blur.