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In: Business and Management

Submitted By rxyan123
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Good afternoon, everyone. As you all know, I’m Ruixin Yan, from Group E. Before I start my presentation today, I’d like to play a little game with you. That is, guess the price of these beauty products. After I introduce the product on the screen, you can raise your hand and answer. Now, let’s start by this product, a facial cream by Sisley. How much do you think it is? ......The answer is 144 pounds. Next one, a facial brush. So what’s the price? …… Surprisingly, it costs 168 pounds. 168 pounds! Do you believe that?! It’s just a brush! This leads us to the topic of my presentation today: Why is the beauty industry so profitable? The beauty industry, also known as the cosmetics industry, includes sales of cosmetics, perfume, and products for skin and hair care. Beauty salons and spas are considered the service sector of the beauty industry. The global beauty industry has an annual growth rate of 4.5 %, and is estimated to worth 265 billion dollars in 2017. For the ten minutes or so, I’ll show you three main reasons to explain the profitability of this industry. I’ll start by looking at the first reason, which is purchase frequency. Next, I’ll focus on huge gross margin, and to finish off, I’ll consider growing men’s cosmetics market.
Right, to begin with, let’s look at purchase frequency, which means people buy beauty products regularly, once a month for example. Even during the Great Recession of 2008, consumers did not stop spending money on these products. So why do they purchase frequently? There are three reasons. Firstly, people always concentrate on appearance. That’s not to say being beautiful or handsome, because the basic requirement is being tidy and comfortable. This graph shows the percentage of U.S. adults who choose these beauty products at a regular basis. The most frequently chosen products are shampoos, conditioners and skin care products.…...

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