The cosmetics industry is such a massive entity that I believe its companies deserve their own thread. The reason I’m personally interested in the industry is its defensiveness combined with meaningful growth prospects. Going by gut feeling, without fact-based data, I would say that the baby boomer generations use much fewer skincare products. This is likely obvious if you compare a generation that washed about once a week on Saturdays to subsequent generations who shower once a day. Consumption is very different. Additionally, men’s cosmetics have clearly gained momentum over the last 10 years, and I see that demand growing as well.
Then to the problem. In the 2000s, the cosmetics industry is dominated by a small group of multinational companies founded in the early 1900s. The French L’Oréal is the market’s oldest and most extensive cosmetics company, with exposure to all segments of the industry.
I’ll quote another forumist @jps, who I think summarizes the current market split well:
The cosmetics industry is globally dominated by seven conglomerates that hold over 180 leading cosmetic brands. After the thirteen largest, only scraps are left of the global markets for others, even though one can still do very large and profitable business in those leftovers.
Current major players are richly valued and therefore don’t pique interest (though the product portfolio would be attractive).
L’Oréal - P/E 35, dividend <2%
Estée Lauder Companies - P/E >40, dividend <1%
Beiersdorf - P/E >30, dividend <1%
However, there are plenty of other players in the market; here are a few examples of different types of operators in the value chain:
elf Beauty Inc - Founded 2004, profitable growth from the US, growth company.
Coty Inc - 77 own brands and additionally cooperation with large players. Revenue declining and some losses in recent quarters.
Ulta - P/E around 20, cosmetics retail, not a manufacturer.
As I understand it, social media marketing and online product sales have grown strongly, and at least L’Oréal has invested in this. I believe that in an industry where brand significance is everything, companies that win visibility on social media are in a strong position. When distribution channels are also established, especially in developing countries like India, these companies could well get their share of the conglomerates’ pie.
In this thread, I would hope for discussion on which players will potentially take market share from the giants (or eventually be bought by them) and on what grounds. Women especially would surely have the insight I’m looking for in this thread, and I would greatly appreciate it if someone had the time to comment if my reasoning is way off or if a certain product/company/marketing channel is currently on the rise.
ps. feel free to suggest a better title! 
