deep dive: global male grooming market · pdf filethe global male grooming market was valued...

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March9,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Deep Dive: Global Male

Grooming Market

Deborah Weinswig

Managing Director,

Fung Global Retail & Technology

[email protected]

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

KeyTakeaways:

1) Theglobalmarketformalegroomingproductsisbooming.ItisprojectedtoreachUS$60.7billionby2020,accordingtoEuromonitor.ValuedatUS$17.5billionin2015,maletoiletries—whichincludesmen’sbathandshower,deodorant,skinandhaircareproducts—isexpectedtooutpacethatofshavingproductsandfragrances.

2) Brick-and-mortaraccountsforover80%ofmalegroomingproductsalesglobally.Anumberofretailershavedesignedtheirstorelayoutstomeetmaleconsumers’needsinthiscategory,whilesomehaveincorporatedgroomingservicesattheiroutlets,enhancingthecustomerexperienceandcreatingopportunitiesforcross-selling.

3) Althoughmostofthebeautygiantshavealreadycreateddedicatedbrandsorsub-brandsfortheirmalegroomingproducts,severalmalegroomingstartupshaveemergedinrecentyears,successfullytappingintotheunmetneedsandgrowingtrendsinthisfield.

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TableofContentsExecutiveSummary.........................................................................................................................................3

MaleGroomingisa$47BillionMarket............................................................................................................4MaleGroomingHasGoneBeyondShavingandFragrances...............................................................................4AsiaPacifictobetheGrowthEngine..................................................................................................................4

Brick-and-MortarAccountsfor80%ofSales....................................................................................................5RedesigningStorestoMeetMaleGroomingNeeds...........................................................................................6GroomingExperienceataRetailOutlet..............................................................................................................7Pop-UpStoreatChangiAirporttoCaptureMaleCustomers.............................................................................8

MajorPlayersintheMaleGroomingMarket...................................................................................................9

EmergingMaleGroomingBrandsandRetailers..............................................................................................10

KeyTakeaways...............................................................................................................................................15

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ExecutiveSummaryTheglobalmarketformalegroomingproductsisbooming,andisprojectedtoreachUS$60.7billionby2020,accordingtoEuromonitor.Whilesomemayattributethistothegrowthinshavingproductsandfragrances,thestrongestgrowthisactuallyinthelargestcategory,maletoiletries.ValuedatUS$17.5billionandcomprising37%oftotalsalesin2015,thiscategoryincludesmen’sbathandshower,deodorant,skinandhaircareproducts.

ThelargestmalegroomingmarketisWesternEurope,valuedatUS$12.4billionin2015.AsiaPacificisthehighestgrowthmarket,forecasttogrowatacompoundannualgrowthrate(CAGR)of8.1%to$11.5billionby2020fromUS$7.8billionin2015,accordingtoEuromonitor.

Brick-and-mortaristhemaindistributionchannelformalegroomingproducts,accountingfor81%oftotalsalesin2015.Groceryretailersandnongroceryspecialists—mostlyhealthandbeautyspecialistretailers—arethetwomajordistributionchannels,accountingfor37%and36%sharegloballyin2015,accordingtoEuromonitor.

Someretailershavedesignedstorelayoutstomatchmen’sshoppingneedsinthiscategory,includingspecialtybeautyretailerKiehl’s,aswellasdepartmentstoressuchasMacy’sandNordstrom.TheArtofShaving,apremiumgroomingomnichannelchainstore,isofferingbarbershopsinselectedoutlets,deliveringgroomingexperiencestoitscustomers.L’OréalandPhilipscollaboratedinDecember2016andlaunchedapopupbarbershopatSingaporeChangiAirport,showcasingtheirproductsinabidtowidentheircustomerbase.

Whilemostofthemajorbeautyandpersonalcareproductcompanieshavealreadycreateddedicatedbrandsorsub-brandsfortheirmalegroomingproducts,anumberofmalegroomingstartupshaveemergedinrecentyears,successfullytappingintotheunmetneedsandgrowingtrendsinthisfield.

Source:Shutterstock

Whilesomemayattributethistothegrowthinshavingproductsandfragrances,thestrongestgrowthisactuallyinthelargestcategory,maletoiletries.

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MaleGroomingisa$47BillionMarketTheglobalmalegroomingmarketwasvaluedatUS$47.2billionin2015,and,accordingtoEuromonitor,isprojectedtogrowataCAGRof5.2%toreachUS$60.7billionby2020.

Men’stoiletries,whichincludemen’sbathandshower,deodorant,skinandhaircareproducts,wasthelargestcategory,valuedatUS$17.5billion,andcomprised37%oftotalsalesin2015.ItisexpectedtoseethelargestabsolutegrowthofUS$6.4billiontoreachUS$23.9billionby2020,andrisingto39%oftotalsales.

Thenext-largestcategories,shavingproductsandfragrances,werevaluedatUS$14.9billionandUS$14.8billion,respectively,in2015.FragrancesareexpectedtoreachUS$18.7billionand31%oftotalsalesby2020tobecomethesecond-largestcategorywithinmalegroomingproducts,whileshavingproductsareexpectedtoreachUS$18.1billionby2020,andaccountfor30%oftotalsales.

MaleGroomingHasGoneBeyondShavingandFragrancesThegrowthofmen’stoiletriesoutpacingthatoffragrancesandshavingproductsindicatesthatthetrendofmalegroominghasgonebeyondthebasicsofshavingandfragrance.Inrecentyears,moremenarepayingattentiontotheirappearance,boostingthegrowthofmale-specificskincareandhaircareproducts.

Figure1.GlobalMaleGroomingMarket,2015–2020(USDBillion)

Source:Euromonitor

AsiaPacifictobetheGrowthEngineAmongthetop-fourmalegroomingmarkets,AsiaPacificisexpectedtoseethelargestabsolutegrowth,expandingataforecastCAGRof8.1%to$11.5billionby2020fromUS$7.8billionin2015,accordingtoEuromonitor.

ThestronggrowthintheAsiaPacificregioncanbeattributedtotheincreaseindisposablehouseholdincome,whichincreasedtoUS$13,415in

17.5 18.119.4

20.822.4 23.9

14.8 14.8 15.6 16.517.6

18.7

14.9 14.8 15.5 16.2 17.118.1

0

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2015 2016E 2017E 2018E 2019E 2020E

Men‘sToiletries Men‘sFragrances Men‘sShavingProducts

TheglobalmalegroomingmarketwasvaluedatUS$47.2billionin2015,andisforecasttogrowataCAGRof5.2%toreachUS$60.7billionby2020.

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2015fromUS$11,025in2010,exhibitingaCAGRof4.0%,higherthantheglobalaverageof0.6%inthesameperiod.

Korea,theleadingmalegroomingmarketintheAsiaPacificregion,isexpectedtoreachUS$825millionin2016,accordingtotheKoreaTimes.Koreanmenareasobsessedwithbeautyastheirfemalecounterparts,,asillustratedinourreport“KoreanInnovationInBeauty”;acosmeticU&AsurveyconductedbytheKoreaMinistryofFoodandDrugsSafetyin2015revealsthatKoreanmenuseanaverageof13.3beautyitemspermonth,and35.5%ofKoreanmenintheir20susemoisturizer.

ThelargestmalegroomingmarketisWesternEurope,valuedatUS$12.4billionin2015.EvenwiththelowestprojectedgrowthCAGRfor2015–2020of3.0%,itisexpectedtoremainthelargestmarket,reachingUS$14.4billionby2020.

Figure2.MaleGroomingMarketSizebyRegion,2015–2020(USDBillion)

Source:Euromonitor

Brick-and-MortarAccountsfor80%ofSalesBrick-and-mortaraccountsforover80%ofmalegroomingproductdistribution,andinWesternEurope,theshareis91%,thehighestamongalltheregions.

Groceryretailersandnongroceryspecialists—mostlyhealthandbeautyspecialistretailers—arethetwomajordistributionchannelsformalegroomingproducts,with37%and36%sharegloballyin2015,accordingtoEuromonitor.GroceryretailersarethetopchannelinAsiaPacificandLatinAmerica,withashareof39%and38%,respectively.NongroceryspecialistshavethehighestshareinNorthAmericaandWesternEurope,accountingfor32%and45%,respectively.

DirectsellingisamajordistributionchannelformalegroomingproductsinLatinAmericawitha27%share,muchhigherthanotherregions.Itiscommontopurchasebeautyandpersonalcareproductsviadirectselling,

7.89.3

11.112.4

11.5 11.6

13.614.48.1%

4.5%4.1%

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3%

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AsiaPacific NorthAmerica LamnAmerica WesternEurope

2015–2020CA

GR

MarketS

ize(USD

billion)

2015 2020E 2015-2020CAGR

Groceryretailersandnongroceryspecialists—mostlyhealthandbeautyspecialistretailers—arethetwomajordistributionchannelsformalegroomingproducts.

https://fungglobalretailtech.com/research/deep-dive-korean-innovation-beauty/

https://fungglobalretailtech.com/research/deep-dive-korean-innovation-beauty/

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asover50%ofcolorcosmeticsand40%ofskincareproductsweresoldviadirectsellinginLatinAmerica.Furthercoverageregardingdirectsellingofbeautyproductsiscoveredinourreport“TheBeautyMarketinBrazil.”

Internetretailingaccountsfor5%ofmalegroomingproductdistribution.Althoughstillanichechannel,someonlinestoreshavereportedrapidgrowth.Forinstance,mrporter.comrecorded300%growthinsalesinmalebeautyandgroomingproductsin2015,accordingtoareportbyTheIndependent.

Figure3.MaleGroomingMarketbyMajorDistributionChannel,2015

Source:Euromonitor

RedesigningStorestoMeetMaleGroomingNeedsRetailershaverespondedtothegrowingdemandformalegroomingproductswithstoredesignsmatchingmen’sneeds.Forexample,asearlyas2012,somedepartmentstoreshadcreateddedicatedsectionsformalegroomingproducts.AccordingtoareportbyTheWallStreetJournal,Macy’sopeneda“men’sgroomingzone”atitsdowntownPhiladelphiastore,featuringfacewash,moisturizerandothermaleskincareproducts.Nordstrommadeasimilarmovebyrelocatingthemen’sgroomingcounterinsidethemen’sfurnishingsarea.

Kiehl’s,anupmarketskincarebrandownedbyL’Oréal,hasasignificantmalecustomerbase.CompanypresidentChrisSalgardoestimatedthatone-thirdofitscustomersaremen.Thebrandhasover300stand-aloneshopsinover40countries,andthestoredesignsaremadetomakebothmenandwomencomfortablewhentheyshop,accordingtoSalgardo.

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2932

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0%

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20%

30%

40%

50%

GroceryRetailers NongrocerySpecialists DepartmentStores DirectSelling InternetRetailing

World AsiaPacific NorthAmerica LamnAmerica WesternEurope

https://fungglobalretailtech.com/research/beauty-market-brazil/

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Source:Kiehl’sFacebookPage

GroomingExperienceataRetailOutletTheArtofShavingisahigh-endmalegroomingbrand,withproductsrangingfromshavingandskincaretofragrances.Apartfromitse-commerceplatform,ithasover100retaillocationsacrosstheUS,ofwhich,56featurea“BarberSpa,”whichprovidesshaving,haircuttingexpressfacialservicesusingthebrand’sproducts.Accordingtothecompany’swebsite,it“offersmenanindulgentgroomingexperienceinamasculineandluxuriousenvironment.”Thiscorrespondswellwiththegrowingexperienceeconomy,whereconsumersareshowingawillingnesstoincreasetheirspendingonleisureservicesmorethanonretailcategories.

TheArtofShavingwasacquiredbyProcter&Gamblein2009,aftertheconglomeratehadalreadyacquiredGillettein2005.ThishasextendedtheFMCGgiant’scoverageinthemalegroomingmarketfromthemasstothepremiumsegment.

Source:TheArtofShaving

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Pop-UpStoreatChangiAirporttoCaptureMaleCustomersL’OréalandPhilipspartneredinDecember2016tolaunchaMaleGroomingClubatSingaporeChangiAirport.Attheshop,professionalbarbersprovidedarangeofshavingandgroomingservicesusingPhilips’shavers,aswellasskincareproductsbytheL’OréalParisMenExpertrange.Groomingadvisorsatthestorehadone-on-oneconsultationswithmaletravelersontheskincareandshavingproductsthatbestsuittheirneeds.

Theaimofthepop-upstorewastohelpthetwobrandstobettercapturemalecustomers.Asmentionedinourtravelretailreport,beautyproductshavethelargestshareinthisretailchannel.AccordingtoL’OréalTravelRetailManagingDirectorVincentBoinay,customersarealsomorelikelytotryoutnewbrandswhentheytravel,andbecomeloyalcustomersofthesebrandslater.Thispop-upstorethusprovidedthetwobrandsanopportunitytowidentheircustomerbaseastheyshowcasedtheirproductstomaletravelers.

Source:RoyalPhilipsandL’OréalGroupe

Thispop-upstoreprovidedthetwobrandsanopportunitytowidentheircustomerbaseastheyshowcasedtheirproductstomaletravelers.

https://fungglobalretailtech.com/research/travel-retail-report/

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MajorPlayersintheMaleGroomingMarketMostofthemajorbeautyandpersonalcareproductcompanieshavecreateddedicatedbrandsfortheirmalegroomingproducts,suchasUnilever’sAxeandP&G’sGillette;orsub-brandssuchasCliniqueforMen,L’OréalMenExpertandBiothermHomme.

Figure4.MaleGroomingBrandsofMajorBeautyCompaniesBrand Company Toiletries Fragrances Shaving

Axe/Lynx/Ego Unilever ✓ ✓ ✓

BiothermHomme L'Oréal ✓ ✓ ✓

CliniqueforMen Clinique ✓ ✓ ✓

Gillette Procter&Gamble ✓

Kiehl’s L'Oréal ✓ ✓ ✓

L'OréalMenExpert L'Oréal ✓ ✓

NeutrogenaMen Johnson&Johnson ✓ ✓

NiveaMen Beiersdorf ✓ ✓ ✓

ShiseidoMen Shiseido ✓ ✓ ✓Source:CompanyWebsites

Althoughamongthethreemalegroomingproductcategories,shavingisprojectedtoseetheslowestgrowthoverthenextfiveyears,itistheanchorpointformalegroomingroutines.Mostofthemalegroomingbrandsoffershavingproducts,andtheyveryoftenpositiontoiletriesasapre-orpost-shavingprocedureinordertohelpcross-selltoexistingmalecustomers.

Forinstance,Niveahasintroducedafacegroomingguideknownas“GetYourPhDinShaving,”whichincludesthreesimplesteps—cleansing,shavingandaftercare.Thisregimeintroducesmalecustomerstoproductssuchascleansers,after-shavelotionsandmoisturizers.

Source:Nivea

Althoughamongthethreemalegroomingproductcategories,shavingisprojectedtoseetheslowestgrowthinthenextfiveyears,itistheanchorpointformalegroomingroutines.

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Aswithotherproductcategories,celebritiesplayanimportantroleininfluencingconsumers.Anonlinesurveyconductedin2014revealedthat13%ofmenintheUKclaimedthattheywereinspiredbycelebritiessuchasDavidBeckham,JoeyEssexandDavidGandy.Forinstance,BiothermHommeandSevenGlobal,DavidBeckhamandSimonFuller’sjointventurewithGlobalBrands,havesignedalong-termpartnershiptodevelopamalegroomingline,whichwillbelaunchedin2017.

Source:BiothermHomme

EmergingMaleGroomingBrandsandRetailersAnumberofmalegroomingbrandsandretailershaveemergedinrecentyears,successfullytappingintotheunmetneedsandgrowingtrendsinthisfield.Theyhavegrownrapidlydespitefiercecompetitionfromtheestablishedbeautygiants.

Anthonyhasaseriesofmulti-functional,multi-benefitmalegroomingproductsrangingfromskincareandshavingtobathandbody.Theproductsfeaturenaturalingredientsandutilizethelatesttechnology.OriginallyknownasAnthonyLogisticsForMen,thecompanyrenameditsbrandin2014toreflectitsgrowingpopularityandreachtofemalecustomers,adoptinganewslogan“Developedformen.BorrowedbyWomen”.

Source:BeautyBridge

AnthonySosnick,thefounderofthecompany,wasarealestatedeveloperfrustratedbythelackofqualitygroomingproductsformen.Recognizingthisasanopportunity,hefoundedAnthonyin2000.

Anumberofmalegroomingbrandsandretailershaveemergedinrecentyears,successfullytappingintotheunmetneedsandgrowingtrendsinthisfield.

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BevelisaSiliconValleystartupthatsellsshavingproductsprimarilytargetedatpeoplewithcoarserhairwhooftenfacethefrustrationofirritatedskinandrazorbumps.

Source:Bevel

TristanWalker,thefounderofBevelwhohimselffacesthisproblem,hasturneditssolutionintoabusinessbylaunchingashavingproductlineforthisskintype,theBevelShaveSystem.Itwasdesignedspecificallytohelpreducerazorbumpsandirritation.Thestartupcurrentlysellsitsproductsonitswebsite,andhasexpandeditsbrick-and-mortarpresencetoTarget.

Asof2016,thestartuphasraised$33millioninfundingfromventuresincludingInsightVenturePartners,AndreessenHorowitzandGoogleVentures.

DollarShaveClubwasfoundedin2011.TheUSstartupoffersamonthlymembershipserviceforrazorbladeshomedeliveryforafeeaslittleas$3amonth.In2014,itexpandedtoothergroomingcategoriessuchaspost-shavemoisturizerandhairstylingproductsinresponsetogrowingdemandfortheseproducts,andsurpassedUS$150millioninsalesin2015.

Asthestartupsellssolelyonline,itsmarketingeffortsaretargetedattheinternet-savvymillennials.Thestartupcreatescontentonsocialmediathatclickswithmillennials—themessageisauthentic,directandwithatouchofhumor.In2015,DollarShaveClubhada0.9%marketshareinmen’sshavingproductsglobally,farfromGillette’sshareat55%,accordingtoEuromonitor.However,DollarShaveClubistheleaderonsocialmedia,whereithasover3million“Likes”onFacebook,1millionmorethanGillette’spage.

DollarShaveClubwasacquiredbyUnileverin2016forUS$1billion,accordingtoaBloombergreport,theFMCGgianthadaneyeonitscustomerrelationskills,especiallywiththemillennials,aswellasaccesstothedataandanalysisofitscustomers.

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DollarShaveClub’sFacebookpostpriorto2016Valentine’sDaySource:DollarShaveClub

Harry’sisashavingstartupfoundedin2011.Itofferscustomizedsubscriptionplansbasedonthefrequencythatoneshaves,aswellastheshavingproductsneeded.Customerscanalsopurchasetheirproductsonaone-offbasis.

In2013,Harry’sopenedacornershopinNewYork.Itservesasbothabarbershopandaretaillocation,withacollectionofHarry’sshavingproductsandlifestyleitems.TheshophelpstoextendtheHarry’sbrandexperiencefromonlinetooffline,providingtheopportunitytocross-sellproductsasbarbersgiveadviceorrecommendationstocustomers.Italsohelpstobuildrapportwithcustomers,whoallneedtovisitabarberregularly.

AccordingtoaBusinessInsiderreportinJuly2016,thecompanyhasmorethan2millioncustomers.AsofJuly2015,Harry’shasraisedUS$287millioninsixroundsoffundingfrom16investors,accordingtoCrunchbase.

Source:Harry’s

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TheManCompanyisasubscriptione-commerceplatformformalegroomingproductsbasedinIndiathatlaunchedin2015.ThestartupoffersproductswithanaveragepriceofUS$9–10,amid-marketpricepointthaturbandwellerscanafford.Customerscanfreelychooseabasketofproductsandhavetheproductsdeliveredtothemonaregularbasis.

Thestartupcaterstomenwhoneedawiderangeofqualitygroomingproductsattheirconvenience,accordingtocompanyfounderMohitSaxena.AsreportedbyInc24,TheManCompanyisoneofthefirstentrantstooffermalegroomingproductsbysubscription,whichhasnotbeenattemptedbyanyothercompanyyet.

Source:TheManCompany

MrPorterisasubsidiaryoftheItalianonlinefashionretailerYOOXNet-a-PorterGroup.Itwaslaunchedin2010,positionedasaglobalhigh-endmensweare-tailer.Itcurrentlyhasatotalof2.5millionuniquevisitorseachmonth,andshipstoover170countries.In2015,itrecorded300%growthinsalesofmalebeautyandgroomingproducts.

Source:MrPorter

https://fungglobalretailtech.com/news/yoox-net-porter-group-bit-ynap-fy16-trading-update-strong-sales-growth-geographic-regions/

https://fungglobalretailtech.com/news/yoox-net-porter-group-bit-ynap-fy16-trading-update-strong-sales-growth-geographic-regions/

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Tailor&Spruceisapremiumgroomingbrandlaunchedin2015,targetedmainlyatmaleprofessionals.Ithasreleasedaluxurykitthathelpsmentokeeplookingsharp,with15essentialgroomingproducts,includingrazor,deodorant,comb,toothbrush,pocketmirrorandmore.Thecompanycurrentlysellsdirect-to-consumeronitsofficialwebsite.

Source:Tailor&Spruce

TuroSkinisanemergingmaleskincarebrandthatproducesmulti-beneficialandsimplifiedskincareproductsformen.Understandingthatmostmenarereluctanttousealotofproducts,TuroSkinhascreateda3-in-1showergelthatcombinesshampoo,cleanserandmoisturizerintoonesingleformulathatonecanuseontheface,hairandbody.

Source:TuroSkin

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KeyTakeawaysTheglobalmalegroomingmarketisbooming,asmoremenarepayingattentiontotheirappearanceandskin.Growthofthemen’stoiletriescategory,whichincludesmale-specificskincareandhaircareproducts,isexpectedtooutpacethatofshavingproductsandfragrances.However,webelievethatshavingproductswillremainanimportantcategory,asitistheanchorpointformalegroomingroutines,wheretoiletriesproductsaremarketedaspost-orpre-shavingproducts.

Brick-and-mortarwillremainthemaindistributionchannelformalegroomingproductsinthenearfuture.Someretailershaveredesignedorsetupstoresthatspecificallycatertotheneedsofmalecustomers,whileothersaredeliveringgroomingexperiencesattheiroutlets.Webelievethistrendwillcontinuewiththegrowingimportanceofthemalegroomingmarket.

Anumberofsuccessfulstartupstargetingthesemalecustomershaveemergedinrecentyears.Whilemostinternationalbeautybrandshavealreadyestablishedmale-specificgroomingbrandsorsub-brands,thesuccessofthesestartupsmayinspirethemindevelopingorenhancingtheirbrandsandproducts,suchasidentifyingtheuniqueandunmetneedsofmalecustomers—i.e.,developingsimpleandmultifunctionalproducts,orfindingwaystoengagethemactively.

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DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comEddieWongSeniorResearchAssociate

HongKong:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017

FungGlobalRetailTech.com

deep dive: global male grooming market · pdf filethe global male grooming market was valued...

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