Contents:

Introduction Definitions Consumer research Abbreviations Executive Summary Modest growth, but improving Growth in ‘scientific’ formulations encourages trading up… …but consumers are also looking for natural skincare Perfumeries and department stores remain the main distributors L’Oréal leads in its native market Product innovation mixes cosmetics with dermatology High penetration rates Still scope to grow Market Drivers High interest in personal appearance Figure 1: Attitudes towards personal appearance, by country, 2005 Greying population creates increasing demand for anti-ageing skincare Figure 2: Trends in French adult female population, by age, 2001-05 Growing female employment is a major driver Figure 3: Trends in French employment, 2001-05 An improving economic setting Figure 4: Trends in French PDI, consumer expenditure and GDP, at current and constant prices, 2001-05 French women have sophisticated view of their skin type Figure 5: Women’s skin type, by country, 2005 Figure 6: Trends in French women’s skin type, 2001-05 Consumers question product safety… …which is also addressed by new EU guidelines Market Size and Trends Improved growth Figure 7: French retail value sales of facial skincare products, at current and constant prices, 2001-06 Technological advances Product innovation sparks growth Strongly increasing per capita spend Figure 8: Trends in average spend on facial skincare products per adult female in France, 2001-06 Market Segmentation Anti-ageing remains the best-selling proposition Figure 9: French retail value sales of facial skincare products, by type, 2004-06 “Professional” treatments for home use Nature offers an alternative Cleansers and toners lose out Anti-ageing not so prominent in mass-market skincare, but growing faster Figure 10: French retail value sales of mass-market facial skincare products, by type, 2004-06 Men’s facial skincare products Figure 11: French retail value sales of men’s facial skincare products, at current and constant prices, 2001-06 Distribution A market geared towards selective distribution Figure 12: French retail value sales of facial skincare products, by outlet type, 2001-06 Mass market faces most pressure to reduce prices Consumers trust pharmacies for their professional advice Masstige drives the mass-market Direct sales relatively more important in France Trading base – health and beauty Yves Rocher and Marionnaud lead for number of outlets Figure 13: Major health and beauty retailers in France, 2004-05 The Supply Structure Manufacturers’ shares Multinational dominance Figure 14: Manufacturers’ retail value shares of facial skincare products, 2004-06 Nivea maintains its lead in mass-market, but only just Figure 15: Brands’ retail value shares of facial skincare products through mass-market outlets, 2004-06 Clarins is the indisputable leader in prestige products Figure 16: Brands’ retail value shares of facial skincare products through selective outlets, 2004-06 Figure 17: Brands’ retail value shares of facial skincare products through pharmacies, 2004-06 Rethinking brand positioning Sophisticated perfumery own-labels Companies and brands L’Oréal Yves Rocher Johnson & Johnson Clarins Beiersdorf New Product Development Product innovation takes priority Anti-ageing remains in focus Many new products target younger women Standard moisturisers receive limited attention New product launches 2006 The Consumer – Product Use by Country Anti-ageing skincare most popular among French women Figure 18: Penetration and frequency of using facial skincare products, by women, by country, 2005 Potential to expand usage among men Figure 19: Penetration and frequency of using facial skincare products, by men, by country, 2005 The Consumer – Product Use in France Trends Greater use of all products except standard moisturisers Figure 20: Trends in penetration of facial skincare products, by type, by women, 2001-05 Figure 21: Trends in penetration of facial skincare products, by men, 2001-05 Current use of skincare by product Younger women targeted with anti-ageing skincare Strong link to income and employment for skincare use Anti-ageing and anti-wrinkle creams – 35-64s are core volume users Under-25s favour standard moisturisers Products for mature skins more important in cleansers Cleansing wipes are the domain of under-20s Use of facial washes and scrubs less dependent on affluence Skincare is a young man’s concern The Consumer – Detailed Demographics Figure 22: Penetration of facial skincare products, by women, by demographic sub-group, 2005 Anti-ageing and anti-wrinkle creams and lotions Figure 23: Penetration and frequency of using anti-ageing and anti-wrinkle creams and lotions, by women, by demographic sub-group, 2005 Other face creams and lotions Figure 24: Penetration and frequency of using other face creams and lotions, by women, by demographic sub-group, 2005 Figure 25: Penetration and frequency of using face creams and lotions, by men, by demographic sub-group, 2005 Cleansing creams and lotions Figure 26: Penetration and frequency of using cleansing creams and lotions, by women, by demographic sub-group, 2005 Cleansing wipes Figure 27: Penetration and frequency of using cleansing wipes, by women, by demographic sub-group, 2005 Facial washes and scrubs Figure 28: Penetration and frequency of using facial washes and scrubs, by women, by demographic sub-group, 2005 Consumer Attitudes Quality and branding count for skincare purchases Figure 29: Purchasing factors for skincare, by all women and skincare users, 2005 Strong desire to hold back the years Figure 30: Attitudes towards personal appearance and skincare, by all women and skincare users, 2005 French women appreciate quality Figure 31: Attitudes towards quality in cosmetics and toiletries, by female users of face creams and lotions, by country, 2005 Figure 32: Attitudes towards personal appearance, by female users of face creams and lotions, by country, 2005 Men take less notice of brands, but are prepared to pay for quality Figure 33: Purchasing factors for skincare, by all men and skincare users, 2005 Figure 34: Attitudes towards personal appearance and skincare, by all men and skincare users, 2005 French men are least concerned about quality and brand-name Figure 35: Attitudes towards quality in cosmetics and toiletries, by male users of face creams and lotions, by country, 2005 Figure 36: Attitudes towards personal appearance, by male users of face creams and lotions, by country, 2005 French consumers the most likely to choose premium brands Figure 37: Popularity of premium, mass-market and own-labels, by country, 2005 Increasing expenditure on skincare Figure 38: Monthly expenditure on skincare, by country, 2003-05 Prospects and Forecast Prospects Increasing focus on anti-ageing Figure 39: Projections in French adult female population, by age, 2006-11 Increasing polarisation between “natural” and “scientific” products Forecast Figure 40: Forecast of the facial skincare market, at current prices, 2006-11 Figure 41: Forecast of the facial skincare market, at 2006 prices, 2006-11 Factors incorporated in the forecast

Companies Mentioned

-L’Oréal -Yves Rocher -Johnson & Johnson -Clarins -Beiersdorf