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1. OVERVIEW OF THE US COSMETICS AND TOILETRIES MARKET

The US is a major global cosmetics and toiletries market. It is advanced in terms of products, distribution and marketing. The US market is also considered as mature and ranked the second largest in the world after Western Europe.

In 2005, the US cosmetics and toiletries industry experienced the highest level of growth in five years, expanded by 3.5 per cent. This was mainly contributed by new product innovations which have captured increased interest in categories that had been flat or declining for almost a decade. During the year, sales of cosmetics and toiletries reached US$33.5 billion with 45 per cent of total sales constituted by the five largest product categories namely facial treatments, personal cleansing products, shampoos, fragrances for women and face make-up.

Market Size and Growth

Favorable demographics are helping to drive strong growth in the US cosmetics and toiletries industry, with the needs of the baby boomer generation, males and different ethnic groups leading to growth in demand for both natural and active ingredients.

The US cosmetics and toiletries market is expected to increase moderately over the years 2005-2010. Sales are projected to exceed US$39 billion by 2010, for an average annual increase of 3.1 per cent from 2005. Skin products for men, facial treatments and lip balms are expected to be the fastest-growing categories. Most of the growth will come from innovative products catering for the needs of emerging groups namely men, baby boomers and ethnic minorities. Increase demand for alternative health and wellbeing solutions such as natural products as well as spa and salon products would also contribute to the industry's growth.

2. MARKET SEGMENT (BY PRODUCT)

The cosmetics and toiletries is composed of seven main product categories.

Fragrances - for men and women

Hair care - conditioners, ethnic hair care products, hair coloring product, hair perming products, hair sprays, hair styling products, shampoos

Makeup - eye makeup, face makeup, lipstick and lip glosses

Nail care - nail polishes, miscellaneous nail care products

Oral care - denture products, lip balms, jellies, mouthwashes, toothbrushes, toothpastes, tooth-whitening systems

Skin care - baby powders, oils, lotions, bath additives, facial treatments, hand and body lotions, skincare products for men, sun care products, talcum and dusting powders

Other