Essay Sample on Makeup Industry Booms With Rising Demand and Consumer Awareness

Introduction

The makeup industry can be cited as one of the fastest-growing industries in the business world. The growth has been contributed to by the growing demand for beauty and wellness beauty products. According to global market research, the base market size of the makeup industry as of 2018 was valued at about 12.2USD. It is projected to grow over the coming years due to a rise in consumer awareness and a desire for improved physical appearance. Various products are manufactured and sold to consumers including; Foundation, Concealer, Powder, Primer. The products are majorly used by women in boosting their physical appearance but companies have already started venturing in the production of make-up products for men and as a result, increased its target market and consumer base. The global market base share as of 2018 by-products in the industry is as in the pie chart below.

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Major Players / Companies

There are various companies in the industry from all over the world. The larges dominant in the market as of 2018, was the Asia Pacific region which according to statistics contributed about 30.5% of the total revenue. The region has experienced an increasing demand for various makeup products contributing to a vast increase in the industry. Major participant countries in this region include India, Asia, Japan, South Korea, and China.

The industry has experienced vast expansion as a result of mergers and acquisitions that have been taking place. Some of the major manufacturing companies in the industry include Chanel S.A, Mary Kay Inc., Louis Vuitton SE, L'Oreal S.A, Avon Products, and Estee Lauder Companies

Recent Trends

The make-up industry has experienced vast growth majorly due to increased consumer awareness. In this digital day and era, technology has played a major role in ensuring the growth and expansion of businesses. The make-up business has witnessed a growing trend of digital campaigns, which has played a major role in increasing consumer awareness and consequently increasing demand for products.

The products are advertised on various digital platforms including Instagram, Pinterest, YouTube, and Facebook. This is mainly done by the company's marketing department or individuals whom they have chosen as their brand ambassadors. Given the increase in the number of social media users, the industry has, therefore, managed to reach a large number of consumers on these platforms.

Another major trend in the industry is the introduction of natural cosmetics. Consumers have learned of the negative effects of the chemical-based product hence have a preference for natural products. This has prompted companies to use natural raw materials such as plant oils and mineral pigments in production to meet the increased demand.

E-Commerce has also been vastly growing in the industry with most products being purchased through online stores. This gives a chance for consumers to shop their products anywhere that they desire and at any time. The major online stores in the industry include Amazon, Sephora, and Strawberrynet. The online stores have made it easier for consumers to access a wide variety of products.

Competitive Structure

The market structure in the industry is projected to experience growth over the next few years in different regions around the world. With the Asia Pacific being the leading region by revenue, other regions such as the Middle East and Africa are also projected to experience growth in revenue. Middle-class consumers have increased demand for quality and affordable makeup products while high-income consumers demand luxury products. This has increased the market base of the products in the industry.

The market base of the industry in the United States has been increasing over the years as is represented in the graphs below:

Porters Five Forces

Competitive Rivalry

The industry has many manufacturers of products that consumers prefer to purchase. The companies have been changing their production to meet the changing preferences and tastes among the consumers. Every company is aiming at getting the appropriate products for the different types of skin tones for the consumers. Competition in the industry can, therefore, be rated as a high threat.

The Threat of New Entrants

There have been new entrants in the industry in the recent past hence it is clear that it is not too difficult to penetrate the industry. It, however, requires much cost as research is necessary on how to achieve the desired quality and affordable products. Nonetheless, most customers are already loyal to some brands hence would be difficult for them to change their preferences. The factor can, therefore, be termed as a moderate threat.

Threat of Substitution

If a company produces chemical-based products, it might be substituted by natural products that are preferred by most consumers. This factor can be rated as a moderate threat.

Supplier Power

Companies have suppliers in different regions of the world. Production in countries such as China with cheap labor and a large population of working women has now become cheaper. The factor can be rated as a low threat.

Buyer Power

Increased demand among consumers in different regions of the world. This has been attained due to the increased urge to boost physical appearance.

Summary

• Five forces Level of threat
• Competitive rivalry High
• The threat of new entrants Moderate
• Threat of substitution Moderate
• Supplier power Low
• Buyer power Low

Recommendations

The industry is a good investment to consider given the low threat by supplier power and buyer power. The threat of new entrants is also moderate which makes it worth to venture in.

To deal with the possible high competition, the company should ensure they produce natural products at affordable prices.

Works Cited

Porter, Michael E. Michael E. Porter on competition and strategy. Harvard Business School Press, 1991.Forbes, Kristen. "Examining the beauty industry's use of social influencers." Elon Journal of Undergraduate Research in Communications 7.2 (2016): 78-87.