Premium Cosmetics Vendors See Growing Threat From Lower-End Market Rivals; Emphasize Brand Experience To Compete In Recession-Hit Market

The 2008–2009 recession hit the world’s leading premium cosmetics companies hard, with growth rates dropping sharply in 2009. Shiseido, for example, posted strong growth through its acquisition of Bare Escentual instead of organic growth. Premium cosmetics companies faced the double whammy of consumers limiting their purchases and growing competition from masstige beauty brands marketing their products made with sophisticated technology. As part of their efforts to compete with their lower-end market rivals, premium cosmetics companies focused on improving the brand experience to distinguish their brands from their lower-end counterparts. The top 10 vendors accounted for 62 percent of the high-end beauty market in 2012, compared with 62 percent in 2007, making premium cosmetics a highly consolidated market.