The Canadian Cosmetics and Skin Care Market

A Hot Tip about Medical, Health and Cosmetics Products in Canada

Last updated: 16 Dec 2011

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Summary

The cosmetics and skin care industry in Canada has become the fourth most important consumption item as Canadian’s seek a higher standard of living. Canada is ranked as the twenty-second largest cosmetics and skincare market in the world with a $USD 4.43 billion (retail) industry. The industry trends in Canada have echoed global trends towards increased importance of skin care products. The key consumers for this market are babyboomers as they are currently aging and demanding products to reduce the physical impacts of such a change.The sales of anti-aging, sun care and men’s products, all of which fall under the category of skin care, are growingat an impressive rate despite the prevailing economic recession.

 

The Canadian cosmetics and skin care market is served mostly by imports. Imports from the United States dominate with an over sixty-seven percent share. While trade between Canada and the U.S. has been facilitated by NAFTA, access to the Canadian market requires guidance and planning as it is still regulated by Health Canada through ingredients and labeling requirements. In terms of trends concerning distribution within the industry, movement is towards drug store chains and discount stores.

 

Best Prospects

The Canadian market for cosmetics and skin care products has displayed consistent growth over the past few years and shows promises to continue into the next decade. The retail value of that market for 2008 was approximately $USD 4.43 billion. Within this market, skin care products continue to form the largest product category.

 

The provinces of Ontario and Quebec are homes of the largest producers of cosmetics and toiletries in Canada and are also the most active consumer marketplaces for such products. The three largest urban markets for cosmetics and skin care products in Canada are Toronto, Montreal, and Vancouver. Suppliers from the United-States remain the dominant import source for the Canadian cosmetics and skin care market, with a value of USD$1.3 billion in 2008.

 

The sales of anti-aging, sun care and men’s products, all of which fall under the category of skin care, are growing at an impressive rate despite the prevailing economic recession. Both an aging population seeking a more youthful appearance, and an increased interest among younger women in combating early signs of aging have fed  into the massive growth of anti-aging products. The baby boomer generation is now well into its sixties therefore itis a very large group of consumers that will likely spend money to slow the signs of aging.

 

Although the consumption of cosmetics and skin care products has remained consistent in terms of value and volume, trends have caused a shift in demand from prestige to mass products. The retail down pricing trend occurring in the market now allows Canadian women the opportunity to acquire high end products at affordable prices. Mass brands promote salon-worthy products and brands that were once strictly sold in salons continue to creep into the market. Drug stores generate the majority of sales for this industry within Canada, experiencing a further augmentation in the year 2008. The industry has experienced the continuation of a retail distribution channel shift in retail sales toward pharmacy chains and therefore away from traditional department stores.

 

The success of manufacturers within the industry in Canada depends to a large degree on product innovation, effective sales and marketing, and efficient operations. In consideration of the market’s dynamics, it must be mentioned that the Canadian cosmetics and skin care industry experiences a large number of product launches every year, and therefore prospective competitors must recognize the increasing pressure for innovation and newproducts featuring new technologies. Faced with so much choice, consumers are less loyal to specific brands orproducts. The industry in Canada is highly developed and competitive. Therefore, in order to differentiate themselves, manufacturers, local and foreign, are more than ever employing cutting-edge and innovative marketing campaigns to position their products to develop sales.

 

The particular advantages that the Canadian markets offers to American companies include the fact that Canada demonstrates especially high receptivity to American-made products. In fact, the Canadian and American markets hold a great number of similarities in terms of consumer preferences. A great incentive for American companies, in particular, new-to-export, to approach the Canadian market is the elimination of tariffs under NAFTA, which can allow American exporters to achieve competitive status within Canada and against other foreign country suppliers. Additionally, due to the fact that the countries share a border, shorter lead times and better service in terms of direct sales, are also benefits for the American exporter.

 

There are a number of export strategies available to American cosmetics companies interested in the Canadian market including sales through distributors, sales through agents, or direct sales to retailers such as drug stores, supermarkets, department stores, and discount stores. It is also important to have a competent sales representative, complemented by a professional, in-store beauty advisor. Department stores in Canada generally buy directly from American exporters in order to take advantage of volume discounts to render their prices more competitive. Countrywide coverage may be achieved through a master agent/distributor or through a regional agent/distributor. Advertising on television, in magazines, and on the Internet will play an even greater role in the sale of cosmetics in the future.

 

By Sue Bissi

Read the full market research report


Posted: 15 December 2009, last updated 16 December 2011

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