According to a report by market research company Companies and Markets, the Australian skincare market has been forecast to increase at a compound annual growth rate (CAGR) of 2.51 % over the next five years, increasing from a valuation of around AUD 1.32 billion in 2012, to reach a total in 2017 of approximately AUD 1.5 billion.
Technological advancement in the skin care market combined with development of innovative products providing effective results and ease of use are contributing to the growth of this industry. The increasing demand for anti-ageing products and growing concern for the use of natural and organic skin care products are the major factors driving the skin care industry.
According to the report, The Future of the Skincare Market in Australia to 2017, Facial Care is the run away leader in the industry, with the Body Care sector a distant second. The fastest growing category in Australias skincare market is forecast to be the Hand Care sector, which is predicted to grow at a CAGR of 5.42 % through to 2017.
Within the beauty and personal care market, manufacturers invested the most in advertising skin care products, which represented a 39 % share of spending, or A$44 million. This was significantly higher than the next category, colour cosmetics, which only recorded a 21 % share of spending on advertising in 2011, the company pointed out.
The growing consumer concern for the use of natural and organic skin care products is encouraging new manufacturers to enter the market. Intense competition can pose a serious challenge to the growth of the skin care industry owing to reduction in quality to reduce the overall cost of skin care products.
LOréal Australia led skin care with an 11 % value share in 2011. It was followed closely by Procter & Gamble Australia and Estée Lauder, each with a 9 % value share, the market research company stated.