COSMETIC PACKAGING MARKET ANALYSIS

Market Concentration and Competitive Landscape

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The availability of counterfeit cosmetic products is posing a major challenge for the growth of the global cosmetic packaging market. Counterfeit cosmetic products are easily available in both online and offline markets which is making it difficult for genuine brands to differentiate themselves. Customers often get confused between original and fake products due to the deceptive packaging of counterfeits. This is negatively impacting the brand image and sales of legitimate cosmetic brands.  Counterfeit products use inferior and sometimes toxic ingredients which can cause harm to the health and safety of consumers. According to a UN report in 2021, fake cosmetics were found to contain high levels of mercury and lead which are hazardous to human health. This is eroding customer trust in the entire cosmetic industry. People are becoming wary of trying new brands or expensive products due to fears of purchasing spurious items. Loss of consumer confidence poses a serious threat to the demand for genuine cosmetic products and corresponding packaging materials. The prevalence of counterfeiting is also causing significant financial losses to packaging manufacturers as well as cosmetic companies. A study by the European Union Intellectual Property Office estimates that the global trade in counterfeit cosmetics results in annual lost revenues of over USD10 billion for legitimate brands. This wide availability of fakes weakens the competitive positions of original brands in the market. It disincentivizes investments in product innovation, branding and premium packaging experiences. Unless strong measures are taken by regulators and law enforcement to curb the menace of counterfeiting, it will continue restricting the prospects of long term growth for the global cosmetic packaging industry.