The Three Worlds of Specialty Actives: China, Europe, and the United States

The Three Worlds of Specialty Actives: China, Europe, and the United States

Personal care is a highly attractive segment of the consumer products market, reaching close to USD 400 Billion globally at a retail level. The industry, known for weathering recessions due to its sustainable socioeconomic and demographical drivers, is globally experiencing 4% to 5% growth annually. Consumers’ desire to see visible results has raised expectations for genuine efficacy of personal care products, rendering functionality an increasingly imperative factor. This holds particularly true for the resiliently growing anti-aging skin care segment. Anti-aging is also the single largest product type in the global personal care market and a key growth engine for the entire industry.
From an ingredient perspective, while specialty actives in personal care target a wide variety of performance benefits, the largest market for cosmetic active ingredients is in anti-aging products. Although anti-aging products were first to use ingredients with proven efficacy, specialty actives are now increasingly used in other application areas, including hair care, anti-inflammatory, anti-acne, skin lightening, slimming, and sun protection among other functionalities. The predominance of face care products containing specialty actives is due to the willingness of the consumer to bear higher cost for face care products better than for other products types. However, consumers are now also willing to pay for high performance hair care products. It enables the formulators to have higher formulation costs and therefore include higher efficacy active ingredients. In addition to the activity of the finished product, the source of the ingredient is an important consumer selection criterion.
Without a question, Europe and the United States remain the largest markets for the personal care active ingredients. Historically, these two regions have dominated the market of specialty active ingredients for personal care. Even if products from the high-end U.S. or European brands were not consumed in the country they were manufactured there, consequently, the market for actives was taking advantage of foreign consumption.


With most of the leaders being the European companies, Europe has been the leading market historically generating approximately USD 400 million in formulations. The United States comes second with roughly USD 300 million. Botanical actives are the largest segment in both Europe and the United States. Furthermore, the market breakdown by product category of these two mature markets is rather similar. The consumption of specialty active ingredients is still enjoying solid near 7% growth in these mature markets due to discerning consumers willing to pay extra for both genuinely effective and “green” products in these regions.


With a growing number of luxury brands being formulated domestically new markets are now emerging. The specialty actives market in China is emerging as prestige brands formulated locally enter the marketplace. In terms of actives supply, multinationals still hold a competitive advantage notably in substantiation claims production, but understanding of local problematic is favoring the emergence of local leaders. For instance, in China, biotechnology product suppliers such as Freda, Boland, and Onlystar hold an important share of the market.


The Chinese market of specialty actives is greatly affected by local consumers’ expectations, and by the large availability of biotechnology products. The large biotechnology products market share is driven by Chinese consumers’ demand for moisturizing functionality. Large availability at relatively low prices of products, such hyaluronic acid and beta-glucans, allow local formulators to include active ingredients in the formulations.


China is expected to offer the largest market opportunities within the next five years with estimates showing a CAGR slightly over 11%, expecting to outperform the overall personal care growth in China between 2014 and 2018.

Driven by consumers’ high expectations, the active ingredients in personal care formulations continue to activate sales. However, there is no such thing as the global consumer; the split of sales of specialty actives by functionality reflects local specificities.


Learn more about active ingredients for personal care market from Kline’s in-cosmetics Asia presentation The Three Worlds Of Specialty Actives: China, Europe And The United States, taking place on Wednesday, November 5th at 5pm.

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