“The takeaway message is that there is no one-size-fits-all strategy for success,” said Carrie Mellage, director of consumer products research for Kline, citing information from the company’s Beauty Retailing Global Series report.
“The unique features of each country require marketers to think globally but act locally to capitalize on specific opportunities,” Mellage added.
Even within specific developing countries there are key differences in consumer patterns, a phenomenon that is particularly emphasized by the stark contrasts found between urban and rural populations in some of the biggest and fastest growing markets, including India, China and Brazil.
Big difference between urban and rural consumers
As a specific example of this, Mellage underlined how in Brazil the rural population is largely dependent on direct person-to-person sales, whereas consumers in densely populated urban areas such as Sao Paulo and Rio de Janeiro are better enticed with exclusive offers, discounting and social media connections.
The growth of the developing market is also running parallel with the development of new or evolving retail channels, including direct sales and the internet.
Mostly driven by huge growth in the developing markets, Kline says the global market for direct sales of beauty products is currently registering annual growth of 8.6 percent, a figure that is nearly double that for the overall market.
Internet and beauty-related websites proving more important
Likewise the internet has also contributed to growth, with Kline estimating that increased comfort and ease of use has meant that the channel more than doubled in size during the past five years.
Urbanites in both the developing and developed markets have proved highly receptive to websites such as You Tube, that show how to apply beauty products, together with interactive try-before-you-buy applications for PC and iPhone and sampling programs like New Beauty’s members-only Test Tube, used to diversify customer base.
“Savvy brands are employing a mix of complementary channels, including online sales, catalogs, and social networking to maximize their reach and target consumers in the format that’s most comfortable for them,” said Karen Doskow, industry manger for consumer product research at Kline.
Retail stores adapting to consumer patterns
Retail stores in developing markets are also adapting to the changing consumer patterns. In China beauty retail growth is being driven by mass international retailers such as Walmart, whereas in India, the traditional convenience store, known as a kiranas, is also adapting to western style retail concepts.
Meanwhile, the chain drug store concept has expanded dramatically on a global basis, which in turn has meant more shelf space devoted to beauty products thanks to a more up-market retail environment and service levels akin to specialty stores.
Kline estimates that worldwide beauty sales from chain drug stores have grown by 5.4 percent, ahead of general global beauty sales growth of 4.7 percent.