What is the Recipe for Success?

Transcription

1 The Flourishing Personal Care Market in Asia: What is the Recipe for Success? A presentation at: Bangkok, Thailand October 30, Kline & Company

2 Contents Introduction ti to Kline & Company Overview of the Global l Personal Care Industry The Global Personal Care Ingredients Market Focus on Asia 2013 Kline & Company 1

3 Contents Introduction ti to Kline & Company Overview of the Global l Personal Care Industry The Global Personal Care Ingredients Market Focus on Asia 2013 Kline & Company 2

4 Introduction to Kline Kline is a leading global management consulting and market research firm offering to its clients the complete spectrum of services. MARKET RESEARCH REPORTS CUSTOM RESEARCH MANAGEMENT CONSULTING Identify market opportunities and create action plans with the offthe-shelf reports Customized service Managed flow of providing accurate, cost people, ideas and data effective within tight timeframes Individual client work to solve business issues and help implement solutions One-way flow of people, ideas, and information. Relaying vital information to help you reach your potential Kline & Company 3

5 Introduction to Kline We have office locations across the globe, covering key developed and developing regions. Parsippany, NJ (HQ) Brussels London Prague Delhi Hyderabad Tokyo Shanghai São Paulo 2013 Kline & Company 4

6 Introduction to Kline Active since the 1960s, Kline s personal care domain expertise covers the entire value chain. Personal Care Value Chain Basic Chemical Supplier Personal Care Raw Material Supplier Personal Care Raw Material Distributor Contract Manufacturer Brand Owner Finished Goods Distributor Retail Consumer Examples include: Antimicrobials Conditioning polymers Emollients Film formers Hair fixative polymers Rheology control agents Skin whitening agents Specialty actives Specialty delivery systems Specialty and commodity UV absorbers Fragrances Hair care Makeup Nail care Oral care Skin care Toiletries Department stores Direct sales Drug outlets Food stores Mass merchandisers Pharmacies/perfumeries Salons Spas/beauty institutes Specialty stores 2013 Kline & Company 5

7 Introduction to Kline Kline s emphasis on primary research and rigorous analysis methodology results in high quality and insightful reports. PRIMARY RESEARCH Unstructured interviews with: Personal care ingredient manufacturers Distributors Formulators and brand owners Government agencies Industry organizations SECONDARY RESEARCH Trade journals Analysis of public data Corporate financial reports and literature Non-confidential data from Kline s databases RIGOROUS ANALYSIS/CROSS CHECK 2013 Kline & Company 6

8 Contents Introduction ti to Kline & Company Overview of the Global l Personal Care Industry The Global Personal Care Ingredients Market Focus on Asia 2013 Kline & Company 7

9 Overview of the Global Personal Care Industry Personal care is a highly attractive segment of the consumer products market. Personal Care Market Characteristics Global sales of close to USD 350 billion (retail level) Realizing at least 4.5% global annual growth Ability to weather recessions better than other businesses Highly sustainable industry drivers, such as demographics Low-capital intensive asset base High return on capital 2013 Kline & Company 8

10 Overview of the Global Personal Care Industry Anti-aging is the single largest product type in the global personal care market and is a key growth engine for the entire industry. Global Personal Care Share by Product Class Skin Care by Category Facial Treatments by Type Fragrance, 11% Oral care, 9% Makeup, 15% Skin care, 29% Toiletries, 15% Hair care, 21% Facial treatments Hand/body lotions Sun care Baby Men's Anti aging Other 2013 Kline & Company 9

11 Overview of the Global Personal Care Industry Anti-aging is the #1 skin care concern in Europe and the United States, as well as growing the most in Asia. Europe United Statest Asia Anti-aging Hyperpigmentation Acne Rosacea Dehydration All other 2013 Kline & Company 10

12 Overview of the Global Personal Care Industry In the United States, growth of skin care brands is led by luxury and professional brands. Luxury brands Professional brands Total U.S. market Mass brands Direct sales brands Specialty brands -10% -5% 0% 5% 10% Change, %, Kline & Company 11

13 Contents Introduction ti to Kline & Company Overview of the Global l Personal Care Industry The Global Personal Care Ingredients Market Focus on Asia 2013 Kline & Company 12

14 The Global PC Ingredients Market With 40% of raw material consumption in differentiated positions in a $14 billion to $18 billion market, this is also an attractive chemical industry segment. Ingredient Market: $14 billion to $18 billion Undifferentiated Differentiated 25% 35% 40% Commodities Fine Chemicals Specialties By Application Oral care, 10% Hair care, 40% Skin care, 50% 2013 Kline & Company 13

15 The Global PC Ingredients Market Personal Care Ingredients: Market Analysis Personal Care Ingredients: Database is an easy-touse and powerful interactive database containing data on over 130 personal care ingredients in key regional markets. Geographical coverage: United States Europe China India Japan Southeast Asia Adding Brazil in the analysis in 2013 Base year 2012, forecasts As an attendee, enjoy a 10% discount on this indispensible service until September 30, Kline & Company 14

16 The Global PC Ingredients Market The program covers more than 130 ingredients within the eight main product groups of a personal care formulation Product category Antimicrobials Conditioning polymers Emollients Emulsifiers Hair fixative/styling polymers Rheology control agents Surfactants UV absorbers Product examples Parabens, imidazolidinyl urea, Quaternium 15, Phenoxyethanol Cationic Guar, Polyquaterniums, Proteins, Silicones Emollient esters, natural oils Alkyl esters, ethoxylates, vegetable-based emulsifiers Amphomer Fixative Polymers, Resyn Fixative Polymers, VP/VA Copolymer, PVP Styling and Fixative Polymers Hydroxypropylmethyl cellulose, Carboxymethyl cellulose, Glucose derivatives Acyl isethionates, Eh Ether carboxylates, Sulfosuccinates, Alkyl l polyglucosides Octyl methoxycinnamate, Benzophenone-3, Avobenzone 2013 Kline & Company 15

17 The Global PC Ingredients Market Europe and the United States remain the leading consuming regions of specialty ingredients. Personal Care Ingredients Value Share by Region, 2012 Southeast Asia India China Europe Japan United States 2013 Kline & Company 16

18 The Global PC Ingredients Market Surfactants account for 31% of volume sales of specialty ingredients within the regions covered. Personal Care Ingredients Volume Share by Product Category, 2012 UV absorbers Hair fixative polymers Antimicrobials i Surfactants Emulsifiers Rheology control agents Emollients Conditioning polymers 2013 Kline & Company 17

19 The Global PC Ingredients Market Specialty surfactants account for a large volume share in all key regions. 100% Volume Breakdown for Personal Care Ingredients by Product Category, % Europe USA China Japan South East Asia India Surfactants Emollients Emulsifiers Conditioning polymers Rheology control agents Antimicrobials Hair fixative polymers UV absorbers 2013 Kline & Company 18

20 The Global PC Ingredients Market The top 10 leading suppliers of specialty ingredients accounts for about half of the total market volume. Market Share by Volume Market Share by Value BASF Croda Rhodia Novecare Momentive Huber Other suppliers Dow Corning Evonik Clariant Ashland Wacker BASF Croda Rhodia Novecare AkzoNobel Clariant Other suppliers Dow Corning Ashland Evonik Dow Chemical Lonza 2013 Kline & Company 19

21 The Global PC Ingredients Market The highest growth is expected in India, with a forecast CAGR of 8.6% in the next five years. Total Volume Growth by Region, 2012 to 2017 Japan Average industry growth = 3.4% Europe USA China South East Asia India Growth rate, % 2013 Kline & Company 20

22 The Global PC Ingredients Market Conditioning polymers will be the fastest growing product category, with a growth estimated at over 5% per year. Total Volume Growth by Product Group, 2012 to 2017 Conditioning polymers Emollients UV absorbers Rheology control agents Antimicrobials Surfactants Emulsifiers Average industry growth = 3.4% Hair fixatives Growth rate, % 2013 Kline & Company 21

23 Contents Introduction ti to Kline & Company Overview of the Global l Personal Care Industry The Global Personal Care Ingredients Market Focus on Asia 2013 Kline & Company 22

24 Focus on Asia China Southeast tasia 2013 Kline & Company 23

25 Asia > China China is one of the world s largest, fastest-growing economies, home to an increasingly urbanized population with growing incomes. China 11% PCI Value Share by Region, 2012 Beijing Shanghai Chongqing Guangzhou Population (2012) 1,343,239,923, up 0.5% yoy Urbanization rate: ~53%, up from 39% in 2002, est. CAGR 2.85% to 2015 Major cities include: Shanghai (>16MM), Beijing (>15 MM), Chongqing (>9 MM), Shenzhen (~9 MM), Guangzhou (~9 MM) GDP (2012) USD 8,400 per capita (purchasing power parity) USD 11.3 trillion, up 9.2% yoy Industry: 46.6% 6% Services: 43.3% Agriculture: 10% SOURCE: CIA World FactBook, National Bureau of Statistics China Kline & Company 24

26 Asia > China Conditioning polymers, surfactants, and rheology control agents are the leading product categories in China. China Breakdown for Personal Care Ingredients by Product Category, % Emulsifiers UV absorbers Antimicrobials Hair fixative polymers Emollients Rheology control agents Surfactants 0% Volume Value Conditioning polymers 2013 Kline & Company 25

27 Asia > China The market in China is led by multinational companies, with the top three suppliers accounting for roughly a 30% volume share. China Personal Care Ingredients Volume Market Share, 2012 Dow Corning, 14% Guangzhou Tinci, 7% Other 51% Momentive, 7% BASF, 6% Rhodia, 6% Croda, 5% Huber, 4% 2013 Kline & Company 26

28 Asia > China The competitive landscape in China is very different from one product category to another. China Market Share of Leading Three Suppliers, 2012 Company rank 1st 2nd 3rd Volume share, % Antimicrobials Lonza Zhejiang Thaizhou Regen Chemical Kunshan Shuangyou 53 Conditioning polymers Dow Corning Momentive Guangzhou Tinci 82 Emollients Croda Yihai Kerry BASF 50 Emulsifiers Croda BASF Dow Corning 43 Hair Fixative Polymers Ashland BASF East Asia Compound Chemical 44 Rheology control agents Huber Danisco Ashland 61 Surfactants Rhodia Guangzhou Tinci Zhongshan Kemei 47 UV absorbers BASF Ashland DSM Kline & Company 27

29 Asia > China Growth in the consumption of personal care products in China remains the most significant driver for consumption of ingredients. Key Market Drivers and Restraints Influencing Growth in China Key market drivers Impact on market development Short term Medium term Long term Growth in the consumption of personal care products in China Opportunities for some ingredient categories, such as conditioning gpolymers and UV absorbers + ++ Switch from commodities to specialties +++ Key market restraints Price sensitivity of the Chinese market slows adoption of specialty ingredients Regulations could make use of new ingredients difficult Kline & Company 28

30 Asia > China In China, all categories will enjoy healthy growth rate, with conditioning polymers expected to grow at double-digits digits to Total Volume Growth by Product Group In China, 2012 to 2017 Avg. North America = 2.4% Conditioning polymers 11.6 Surfactants UV absorbers Antimicrobials Emollients 4.8 Hair fixative polymers Emulsifiers Rheology control agents Growth rate, % 2013 Kline & Company 29

31 China Southeast tasia 2013 Kline & Company 30

32 Asia > Southeast Asia Southeast Asia is one of the fastest-growing regions in the world, home to a rising population with increasing purchasing power. PCI Value Share by Region, 2012 Southeast Asia, 6% Markets Thailand, Malaysia, Indonesia, Vietnam, Singapore, Philippines ASEAN Harmonized Cosmetic Regulatory Scheme sets the standard for regulating cosmetic products among all ASEAN countries Population (2012) 610,000,000, up 1.4% yoy SOURCE: CIA World FactBook. GDP (2012) USD 3,538 per capita (purchasing power parity) USD 2.2 trillion, up 5.3% yoy Services: 45.2% Industry: 37.5% Agriculture: 17.3% 2013 Kline & Company 31

33 Asia > Southeast Asia Increasing purchasing power and awareness of personal care products amongst consumers are driving i the ingredients market. Consumer Trends in Personal Care Products in Southeast Asia Application All markets Skin care Hair care Key trends Increasing purchasing power in the region Specially designed products, such as those for curly hair, straight hair etc., and similar trends in the skin care and other markets Increased consumer knowledge on skin care applications Strong desire for fair skin, including use of sunscreen actives in major skin care lines, particularly facial treatments and daily wear lotions Interest in natural ingredients within skin care products Young customers think prevention better than cure Usage of skin care products by men in the region is increasing The frequency of usage of hair care products is expected to rise, as purchasing power increases, and the emphasis on looking good intensifies in urban areas Consumers want more from hair styling gels than just hold and stiffness more innovative hair styling products, such as mousses and hair sprays 2013 Kline & Company 32

34 Asia > Southeast Asia Conditioning polymers, surfactants, and rheology control agents are the leading product categories in Southeast Asia. Southeast Asia Breakdown for Personal Care Ingredients by Product Category, % Emulsifiers Hair fixative polymers Antimicrobials Emollients UV absorbers Rheology control agents Surfactants Conditioning polymers 0% Volume Value 2013 Kline & Company 33

35 Asia > Southeast Asia BASF, Rhodia, and Dow are the major suppliers of personal care ingredients both by volume and value in Southeast Asia. Market Share by Volume Market Share by Value BASF, 11% BASF, 10% All other, 46% Rhodia, 6% All other, 41% Dow Chemical, 9% AkzoNobel, 2% Clariant, 3% Ashland, Dow 4% Chemical, 4% Croda, 6% Dow Corning, 6% Momentive, 6% Galaxy Surfactants, 6% Clariant, 2% Momentive, 3% Dow Corning, 3% Ashland, 7% Croda, Galaxy 6% Surfactants, 4% Rhodia, 8% AkzoNobel, 7% 2013 Kline & Company 34

36 Asia > Southeast Asia The personal care ingredients market in Southeast Asia is quite concentrated, with foreign suppliers occupying most of the leading positions. Market Shares of Three Leading Suppliers in Southeast Asia by Ingredient Category, 2012 Company rank 1st 2nd 3rd Volume share, % Antimicrobials Lonza Ashland Clariant 40 Conditioning polymers Dow Corning Momentive Dow Chemical 53 Emollients Croda BASF Sophim 52 Emulsifiers Imperial Industrial Inolex Lonza 33 Hair fixative polymers BASF Dow Chemical Ashland 65 Rheology control agents Ineos CP Kelco Rhodia 33 Surfactants BASF Galaxy Surfactants Rhodia 54 UV absorbers DSM Ashland BASF Kline & Company 35

37 Asia > Southeast Asia The personal care product ingredients market in Southeast Asia is likely to be driven by various factors. Key Market Drivers of Growth in Southeast Asia Impact on market development Short term Medium term Long term Key market drivers Involvement of governments, academia, and cosmetic associations in the development and implementation of the road map for the personal care products industry Increasing per capita income of the consumer in Southeast Asia Demand for multifunctional products ++ Improving consumer knowledge of personal care products Cosmetic producers are using natural resources base and cultural wisdom, to develop unique products in this region Kline & Company 36

38 Asia > Southeast Asia Various factors impede growth of the personal care product ingredients industry in Southeast Asia. Key market restraints Key Market Restraints to Growth in Southeast Asia Impact on market development Short term Medium term Long term No standardized di d quality and quantity in supplies --- Compliance with market requirements; e.g. ASEAN regulations require manufacturers to submit scientific reasons for the claims made to the consumer --- Most of the personal care product ingredients are imported into Southeast Asia: distributors play a major role -- Extreme weather conditions require testing formulation compatibility and stability for new personal care ingredients -- No sustainable sourcing or traceability that can demonstrate the sound use of biodiversity Kline & Company 37

39 Asia > Southeast Asia In Southeast Asia, all categories will enjoy healthy growth over the next five years, with emollients outperforming. Total Volume Growth by Product Group in Southeast Asia, 2012 to 2017 Avg. North America = 2.4% Emollients 8.9 Surfactants Hair fixatives Rheology modifiers Conditioning polymers Emulsifiers UV absorbers Antimicrobials Growth rate, % 2013 Kline & Company 38

40 Introduction to Kline Another key research for ingredient suppliers Specialty Actives in Personal Care Covers: Botanical actives, proteins and peptides, biotechnology products, and other types of active ingredients. Regional Coverage: Europe United States South Korea Japan Brazil Data is also accessible via an interactive online database 2013 Kline & Company 39

41 Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit CONTACT INFO: Nikola Matic Industry Manager, Chemicals & Materials Nikola.Matic@klinegroup.com Americas Asia Europe Kline & Company, Inc. 35 Waterview Blvd., Suite 305 Parsippany, NJ Phone: Fax: Kline & Company 40