The American marketplace has many unique qualities so it should be no surprise that overseas markets have theirs as well. Skin care is a more than $5 billion global market, making it possible for many players to get a share. The key to finding success in this marketplace is the development of a product distribution strategy. In Europe and the U.S., the major channels have been nearly mutually exclusive, making it difficult for businesses to achieve success in both regions.
Domestically, high-end, professional-type brands tend to do best in the day spa distribution channel. However, this channel is relatively non-existent within Europe. A European spa experience typically lasts for a week and has a holistic wellness focus. In Europe, the retail sector represents more than 80 percent of product sales, with 85 percent of retail sales made through pharmacy-related establishments.
While pharmacy brands are the largest within Europe, the U.S. does not have this market segment. European pharmacies are more service-focused, offering products with higher price points. The mass market drives U.S. drugstores, with product pricing playing a major role in sales. In America, the concept of a beauty institute also does not exist. This European boutique focuses on skin treatments, offering only basic services like hair removal and facials. In terms of professional skin care item sales, this establishment occupies second place.
In the U.S., the medical distribution channel has increased an average of almost 18 percent since 2000. Doctors now sell some of the largest professional brands. European law prohibits doctors in that region to sell products from their practices. Strong projected growth is the common tie between the U.S. and European skin care sectors, offering opportunities for overseas expansion of brands.
Companies within the skin care sector should learn more about distribution channel differences between their home country and where they plan to expand. Once they select a future market, they should develop a customized distribution strategy. If they simply apply their current distribution strategy to the new country, they are destined to fail.
Many countries hold the potential for profiting from the sale of skin care products. By researching local challenges, opportunities, and trends, skin care business representatives gain knowledge of the playing field. This information will help them develop an effective product distribution strategy within the desired country. Experienced consultants can help companies tailor their distribution approach to the new marketplace, taking its strengths and weaknesses into account.
