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Analysis of the cosmetic industry Essay

Prior to discussing any creative industry, it is crucial that we first define ‘creativity’. Creativity refers to the course of producing something original, or in the least, with original elements. Thus, a creative industry refers to economic activities that involve the creation of new, original materials.

The cosmetic industry is one of such industries, of which will be analyzed according to Richard Caves’ economic properties. According to the Food and Drug Administration (FDA) of the United States, cosmetics are “articles intended to be… applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance.” By this definition, cosmetics include a wide range of products, such as makeup, skincare, hair products, perfume, and body care products like lotions and body wash.

First of all, the cosmetic industry clearly illustrates Caves’ economic property of “infinite variety”. The variety of cosmetic products available for consumption nowadays can easily blow one’s mind. Cosmetics do not only include the makeup products that we see in pharmacies and department stores, but also skincare and hair products, which are all generally designed to enhance one’s appearance. Cosmetics products come in all shapes and sizes, along with different forms of usage. Taking makeup as an example, we can always see almost identical products in women’s makeup bags or over makeup counters. To those unfamiliar with the intricacies of the world of makeup, little would they know that makeup is actually classified by the location of its usage. In other words, makeup is not really just a bunch of lipsticks, eyeliners and blushes, but more so an array of products targeted for your eyes, lips and cheeks respectively. The possibilities do not just stop at this point, where eye makeup products, for instance, further consists of mascaras and eye shadows, and the list goes on.

Although numerous cosmetic products seem to perform the same functions, the property of infinite variety is demonstrated in the details of every individual product. A red lipstick manufactured by brand A would not look any different from that manufactured by brand B. The two products are very much similar in the eyes of consumers, yet they are not exactly the same. Brand A’s lipstick may carry a scent different from that of brand B, and brand B’s lipstick could be shaped differently, affecting consumers’ ultimate purchase. From an economic point of view, these lipsticks are vertically differentiated.

Similarly, producers of cosmetic products have a virtually infinite variety of production methods to choose from. Using the same lipstick example, brand A may choose to infuse their lipsticks with a certain essential oil typically excluded from other lipsticks sold in the market. Consumers that happen to have tried the brand’s lipstick may then discover that the quality of this lipstick is better in comparison to the others that they have tried. Due to the different experiences from trying a variety of products, and given the same price, consumers will tend to choose brand A. This reflects the horizontal differentiation of products, where producers have an infinite number of possibilities in formulating their products.

Secondly, the cosmetic industry also demonstrates Caves’ “A list/B list” property. This property illustrates the ranking of personnel and products by the quality of skills shown in the field of creative industries. To suggest an example in terms of personnel, a hairstylist hired for a fashion show at Paris Fashion Week would most probably be considered as part of the “A list”, while a hairdresser at your cheap local hair salon would be part of the “B list”. Judging by the places in which they work for, these respective individuals clearly possess varied qualities of skills.

As for the ranking of products, taking perfumes as an example, one can easily say that perfumes produced by luxury or designer brands like Chanel or Marc Jacobs are considered to be part of the “A list”, while perfumes produced and sold by relatively inexpensive brands like H&M and Forever 21 would be considered on the “B list”. In this case, the ranking of products is based on the institution of which the product originated from. Chanel and Marc Jacobs, are iconic fashion labels that sell products at high prices in the market. Because of their goodwill, these brands can easily attract customers willing to sacrifice high prices for good-quality products, as they believe that the price reflects the quality of a good. Consumers may be willing to pay more to enjoy an “A list” good rather than a “B list” good. In this case, the ranking of a good is decided by the reputation of its originating institution.

Thirdly, Caves’ “time flies” property is demonstrated in the cosmetic industry as well. This particular economic property suggests that creative products are to hit the market at a specific time to reach certain goals. Most of the time, the goals are to generate revenue by meeting temporal demands.

The most obvious example to this economic property all the products that emerge in the market during the holiday seasons. We can notice that especially around Christmas and wintertime, companies like to promote themed products that adhere to the needs and interests of customers during that particular time of the year. Companies such as the Body Shop or Lush will bring out gift sets and limited edition body lotions and shower gels that have special Christmas-themed scents, like gingerbread or peppermint, which typically won’t be seen during any other time of the year.

Similarly, around the time of fall or during October when Halloween approaches, cosmetic companies may add a few twists to the packaging of their products, like adding a spider web design to plastic casings. Makeup companies join in with the celebration of Halloween by selling costume-inspired makeup items, such as fake blood or black lipstick. To fit in with the theme of fall, companies also like to come out with products related to pumpkins or the warm scent of cinnamon.

The plethora of examples mentioned above is only the tip of the iceberg when it comes to all the creative products within the cosmetic industry that are affected by the “time flies” property. Because of this particular property, we can see that the cosmetic industry is standardised in order to meet specific demands during different times of the year. It seems as if it is generally agreed in the industry that certain themes will be used in production in different seasons. As a result, cosmetic companies will collectively release similar products at the same time, and companies that do not follow suit would seem detached from market trends, and would most probably not be able to generate as much income as other companies.

Isn’t it ironic to call this industry “creative” when companies are virtually copying one another and constantly creating similar products? It is fascinating to see that the cosmetic industry is still deemed “creative” when it clearly follows a particular practice in production to meet temporal demands. However, it must be acknowledged that to a certain extent, creativity is always based on something created in the past. It is the contrast between the past and present creation that ultimately indicates how creative something is.

Moreover, it would be very difficult for a company to survive in a creative industry if it simply walked its own path without taking references from any trends or catering to temporal demands. Even if it were that particular company’s intention to stand out from its fellow competitors, it would just be unrealistic to expect this company to generate sufficient income when indeed it was not providing consumers products that satisfied their corresponding needs. In the end, retaining originality in the name of pure creativity would most likely lead to failure.

Furthermore, despite leading to the standardisation of production in the cosmetic industry, the “time flies” property actually promotes creativity to some extent. Standardisation is the very reason facilitating creativity. When multiple companies are creating similar product at the same time, the way to gain the most profit is actually to take advantage of the situation and attempt to modify one’s products to try and stand out from all the others in the market. Thus, companies would aim to create the most unique and attractive product for the consumers. When multiple companies operate with the same profit-maximizing intention, creativity is somehow promoted rather than suppressed.

All in all, the cosmetic industry is one creative industry that can illustrate several of Richard Caves’ economic properties. There is an infinite amount of production methods as well as product choices for cosmetics, thus demonstrating the property of “infinite variety”; personnel and products in the cosmetic industry are ranked by a general consensus, thus demonstrating the property of “A list/B list”; and similar cosmetic products are constantly released at the specified periods throughout the year in order to generate income, thus demonstrating the property of “time flies”.


1. Richard Caves 2000 “Introduction.” _Creative Industries_, pp. 1-17. Cambridge, MA: Harvard University Press.

2. Sena, M. (2014) _Beauty Industry Analysis 2014 – Cost & Trends._

Retrieved from https://www.franchisehelp.com/industry-reports/beauty-industry-report/

3. U.S. Food and Drug Administration (2012) _Is it a cosmetic, a drug, or both? (Or is it soap?)._

Retrieved from http://www.fda.gov/Cosmetics/GuidanceRegulation/LawsRegulations/ucm074201.htm#Definecosmetic

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