Personal Care & Cosmetics Products

France
Executive Summary

The cosmetics industry is one of the rare sectors in which France continues to be a world leader. French
perfumes and cosmetics are among the best French “ambassadors” abroad, where “made in France” has
a cachet of quality and desirability. Two key players, L’Oréal and LVMH (Louis Vuitton Moet Hennessy),
dominate this very competitive market.

The high level of demand is matched by constant innovation in the French cosmetics market. France
spends more on cosmetics research and development than any other European country.

France’s Cosmetic market is truly a dynamic market – the domestic cosmetics market accounts for USD
$11.7 billion. 2015 sales were high within all categories. The three leading categories of the market were
the “Beauty and Skincare” category leading with 24.8% (USD 2.9 billion) followed by 20% (USD 2.4
billion) for “Perfume” and 18.4% (USD 2.2 billion) for “Hair Care”.

New trends and brands are continuously entering the French market aiming to attract and acquire new
consumers. This is why, companies should put enormous importance on product updates and presentations
with a high level of quality. Although this is a very difficult and competitive market, there are some market
opportunities for U.S. niche brands.

Overview of the Domestic Market

Size and Growth Trends in the Domestic Industry:

Domestic Production

With around 430 establishments, made of small and medium-sized companies composed of about
42,000 employees, the French market for cosmetics is still remaining a prospering industry in the French
economy.

After 1970, major perfumers and cosmetic companies decided to move out of the Paris region. This is
why, a great number decided to set up production south of the Ile-de-France (south of Paris) in the Loire
Valley near the city Orleans.

The presence of these major industrials is encouraging more and more SMEs to set up in the region,
working with the big brands.

Likewise, foreign investors in the sector are choosing to establish their European bridgeheads in the
heart of this region where the strong links between beauty businesses and the presence of numerous
professionals make it easier for them to start up operations (like the Japanese firm Shiseido and the
Korean company Amore Pacific and the German company Reckitt Benckiser ).
Cosmetics, Toiletries and Skincare Market Overviews 2015

Market Size

In 2015, the total market size was estimated at USD $11.7 billion and France stands out through its
technological lead, its marketing skills and the image and cultural capital it inherited from the
Renaissance. Therefore, the French industry enjoys a position of market dominance with 25% of the
global market. This performance is more than evident in the export sector as cosmetics is France's
second biggest export, after aviation construction products and has the second largest trade surplus.

Beyond the core business of perfumery and cosmetics, cosmetics products require supplies from
packaging, primary materials and testing industries. The majorities of these suppliers are specialists in
the perfumery cosmetics market and contribute to research and innovation of cosmetics products.

The cosmetic industry is one of the rare sectors in which France is a global leader since French products
are sold in around 200 countries and French companies have continued to gain market shares
worldwide, particularly in emerging countries. Over the past few years, French exports to Africa, China,
and to Singapore have registered good results. These results are anticipating to grow in the following
years to emerging countries.
Consumer Profile

French consumers, both men and women, take meticulous care of their body and face and strive to
maintain an image of youthfulness and beauty.

French Market
Annual Family
Expenditures (USD million)

USD 829 USD 22.694

Market and Expenditure in Health and Beauty

Annual expenditure on hairdressing USD 232 USD 6.352

Annual Expenditures on Beauty and Related

Institutes USD 128 USD 3.517

Annual Expenditures on Body and Face Products USD 126 USD 3.564

Annual Expenditures on Body Hygiene Products USD 120 USD 3.281

Annual Expenditure on Perfumery USD 84 USD 2.289

Annual Expenditure on Hair Products USD 54 USD 1.498

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Cosmetics, Toiletries and Skincare Market Overviews 2015

Annual Expenditures on Makeup Products USD 46 USD 1.275

Annual expenditure on Dental Hygiene Products USD 25 USD 685

Annual Expenditures on Hair Styling Products USD 6 USD 175

Annual Expenditures for Men's Shavers USD 3 USD 95

Annual Expenditures on Female Hair Removal USD 2 USD 70

Source: https://www.monemplacementcommercial.fr/etudes-de-marche/potentiels-de-depenses-
2015/

Distribution Channels and Marketing

The cosmetic distribution is mainly done through the selective distribution including the key players
Sephora belonging to the leader LVMH, Marionnaud, Nocibé, Douglas, followed by the mass distribution
market, department stores and pharmacies.

In order for U.S. firms to succeed in France, they need to consider the following strategies:

Advertising - One of the key factors in establishing a brand in France is providing an adequate advertising
budget. Therefore, U.S. firms will need to be able to effectively promote their image and reinforce their
position. New products should be aggressively marketed to appeal to French tastes and to influence fashion
preferences. An effective advertising strategy will use various media outlets (television and print press).

Packaging - A key component of having a successful product is its package presentation. French women and
men tend to choose products that are neat and tightly packaged but that are also creative and eye-catching.
Because there are so many existing products on the market, a new U.S. firm will have to match and/or
surpass French packaging.

Price - Price is also a key factor. If prices are competitive, U.S. manufacturers will be able to penetrate the
French market much more successfully.

Adaptability - Since the cosmetic industry is following fashion trends, U.S. companies should be able to
anticipate the fashion tendencies in order to adapt their products.

Partnership - One way to achieve success in France is for U.S. manufacturers to enter the French cosmetic
market through partnership agreements with a U.S. manufacturer already established in France and
distributing its own line of cosmetic products.

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Cosmetics, Toiletries and Skincare Market Overviews 2015

Product Trends

According to market specialists, the following products are in a high demand in France:

Organic cosmetics are a booming market in France. Initially, many organic cosmetics were designed for
people suffering from skin problems, such as eczema or allergies. Increasingly, organic cosmetics are
positioned as high quality and premium products and draw a wide range of consumers.

Sun care products have become much more complex, now including spot-prevention, tinted creams in
addition to the expected UVA and UVB protection. The competition between manufacturers has increased
over the past few years in order to gain market shares. In this context, manufacturers are obliged to find
ways to stimulate their performances.

The ethnic cosmetic market appears to be a great opportunity in France due to an increase in the purchasing
power of ethnic communities. The well-known brands are beginning to dedicate more products to this
growing market.

Men’s products: more men are purchasing beauty products and anti-aging treatments. The male grooming
market has experienced double digit growth rates in several segments over the past decade.

Spa and wellness products still remain one of the most dynamic markets with a significant increase over
the past few years.

Foundations, which are being shifted towards BB and CC creams are also very successful

Pricing:

The French importer is responsible for paying the Value Added Tax (VAT) and custom duties. The VAT of
19.6 percent is calculated on import value and custom fees. Custom duties are amounting to about 7
percent.

For further details on VAT, see the European Union Web page on Value Added Tax:
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/rates/index_en.htm

Representative retail prices for the following products:

Products Mass Market Premium

Low (NYX) High Low High
(Monoprix) (Sephora) (Galeries
Lafayette)
Perfume N/A USD 31 USD 69 USD 253
Brand: NUXE Brand: Brand:
Philosophy Frederic
Malle
Lipstick USD 8 USD 15 USD 33 USD 90

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Cosmetics, Toiletries and Skincare Market Overviews 2015

Brand: NYX Brand: Revlon Brand: Nars Brand:

Christian
Louboutin
Beauty
Eye Shadow USD 5 USD 15 USD 20 USD 47
Brand: NYX Brand: L’Oréal Brand: Brand: Tom
Urban Ford Beauty
Decay
Mascara USD 9 USD 13 USD 21 USD 66
Brand: NYX Brand: L’Oréal Brand: Tarte Brand:
Sisley Paris
Sunscreen N/A USD 31 USD 47 USD 168
Brand: La Brand: Brand:
Roche Posay Cover FX Sisley Paris
Bronzer/Blush USD 7-9 USD 16-20 USD 44 USD 65
Brand: NYX Brand: L’Oréal Brand: Nars Brand:
Hourglass
Skin Cream USD 10 USD 18 USD 31 USD 168
Brand: NYX Brand: La Brand: Brand: La
Roche Posay Clinique Mer
Shampoo/Conditioner N/A USD 4 Brand: USD 28 USD 42
L’Oréal Brand: Brand:
Bumble & Vernon
Bumble François
Hair Styling Product N/A USD 10 Brand: USD 24 USD 38
OGX Brand: Brand:
Drybar Vernon
François
Deodorant N/A USD 9 USD 20 USD 27
Brand: Roge Brand: Fresh Brand:
Cavailles Donna
Karan
Nail Polish N/A USD 10 USD 13 USD 21
Brand: Bourjois Brand: Brand:
Paris Formula X Deborah
Lippmann
Shaving Prep N/A USD 5 USD 5 USD 23
Brand: Gillette Brand: EOS Brand:
Satin Care L’Occitane

Emerging Product Niches and Trends:

Cosmeceuticals are a new category of cosmetics that have appeared on the French market. It is not an
official term, and the controversial position of the term cosmeceutical is based on the fact that such
products are considered hybrids of a cosmetics and pharmaceuticals. Other expressions used to describe

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Cosmetics, Toiletries and Skincare Market Overviews 2015

the intersection of these categories have included functional cosmetics, dermaceuticals, performance
cosmetics, bio-functional materials and treatment ingredients.

The global cosmeceuticals market is set to grow at a compound annual growth rate of 7.28 percent over the
period 2016/2020. One of the key factors contributing to this market growth is the growing urbanization and
affordability in developing countries. The Global Cosmeceuticals market has also been witnessing the
evolution of new ingredients for making new and innovative products. However, the intense competition
among the vendors could pose a challenge to the growth of this market.

The spa products market in France continues to grow despite the economic slowdown. It is estimated that
the personal spa products market will grow between 3 and 7 percent and service up to 12 percent over
the next two years. Spa tourism also has strong capacity for growth, as baby boomers and men are
increasingly drawn to spa products and services.

U.S Imports and Competitors

The U.S. share of the French cosmetic market is mainly represented by U.S. brands acquired by the key
players, L’Oréal and LVMH (Louis Vuitton Moet Hennessy), dominating this very competitive market. These
two major players have acquired several U.S. brands (i.e. Maybelline NY, Softsheen Carson, Redken, Kiehl’s,
Ralph Lauren and Skinceuticals for l’Oreal and Benefit Cosmetics and Fresh for LVMH).

Furthermore, LVMH’s distribution company sells a large number of niche U.S. brands through their retail
beauty chain store Sephora, including, Bobbi Brown, By Terry, Aveda, Too Faced, Make up For Ever, Bumble
and Bumble, Ojon, and Origins. However, American companies such as Revlon, Clinique and Estée Lauder
have successfully established themselves in France by placing enormous importance on product innovation
and quality opportunities.

The American key leaders like Johnson and Johnson, Procter and Gamble, Unilver are also very present in
France through a large range of brands particularly sold in the mass distribution market .

Top Markets/Opportunities Specific to US Products:

In term of products, below are the top opportunities for US products:

1. Make-Up: Easily applicable make-up products for the, “minimalist” mindset, organic products.
2. The Anti-Aging market
3. Skin Care: Primarily masks, organic products.
4. Hair Care products: Heat-Protective Serums, gentle Shampoos and Conditioners.
5. Nails: Various nail accessories, tools, and polishes.
6. BB and CC Creams and Eye liners
7. Eyelashes extensions
8. Tools & Brushes: Make-Up Sponge Applicators.

(Source: http://www.cosmoprofnorthamerica.com/ )

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Cosmetics, Toiletries and Skincare Market Overviews 2015

See the following tables in the report Annex for more information on the U.S. and competing
countries exports to France:

France Total Cosmetics Imports– See Appendix Table 1

France’s Total Cosmetics Exports – See Appendix Table 3

HS 34: Make Up Products, U.S. Exports to France – See Appendix Table 4

HS 35: Hair Care Products, U.S. Exports to France— See Appendix Table 5

HS 37: Cosmetics & Toilet Preparations, inc. Shaving, Bath Prep and Deodorants, U.S. Exports to
France Table

Top Domestic Trade Fairs

 Event Name and Date:
o Congrès International d’Esthétique & Spa 2017; April 1-3 2017
 No. of Exhibitors
o 250 Exhibitors
 No of Registrants
o 26,000 professionals
 Product Mix at the trade show
o Demonstration of make up, nails competition, make up competition

Regulations, Standards and Customs

There was a change in regulations on July 11, 2013, the date of entry into force of European Commission
(EC) Regulation N° 1223/2009, which revoked the 76/768/EEC Directive.

The declaration to the poison control center was replaced by the notification of cosmetic products on
the European Portal, more commonly known as the Cosmetic Products Notification Portal (CPNP). Thus,
Article 13 of EC Regulation N° 1223/2009 provides electronic notifications of cosmetic products to the
European Commission. This procedure must be completed before the cosmetic product is launched on
the market. This notification is unique and centralized by the European Commission

https://ec.europa.eu/growth/sectors/cosmetics/cpnp_fr

The introduction section to this report, provides an overview of the EU requirements.

For More Information:

Contact :

Caroline de Villoutreys
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Cosmetics, Toiletries and Skincare Market Overviews 2015

FCS PARIS, France

Tel : (33.1)43.12.7198
Caroline.deVilloutreys@trade.gov

(Source: FEBEA – French Trade Association for Cosmetics and Perfumes).

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