Inside the clinical testing Market

After Europe comes Asia which gathers almost a quarter of the market 73 centres. China is a particular testing market mainly influenced by the growth of the cosmetics consumption, the beauty purchasing patterns, the specificity of the distribution channel (90% on internet) and finally by its recent cosmetics regulation constraints. The new regulation can be considered as an obstacle to market access (after the positive list that was necessary to comply for ingredients). Indeed, CROs need to have a global accreditation from the Chinese government but also for some claims such as moisturising, specific instrumentation is needed to get the final approval. It will limit inevitably the foundation of new foreign laboratories.

Behind, we can see that North America also has a great amount of CROs, with 53 centres present on their soil. We can note that most of the laboratories are situated in the North Eastern part of the US and in the Great Lakes region. This concentration must be linked to the presence of the cosmetics manufacturers on the American territory. Surprisingly, the Western part, such as California, doesn’t stand out despite a strong biotech activity, that we see more on the Preclinical tests.

Coming after, we have South America with 12 CROs Brazil gathering almost all the CROs thanks to the strong development of their cosmetics industry and ingredients since the 2000’s. Columbia makes an exception with two laboratories. Meanwhile, in Africa with 11 centres, the majority of the CROs are in South Africa, Tunisia, and Mauritius. This concentration of the centres could be justified by the low maturity of the cosmetics market in the continent, the difficulty to manage studies on African subjects and the lack of specific private infrastructures that could run these tests in other African countries.

Tests and methods

Europe offers the most different methods with more than 300 methods while Asia and North America come after with respectively 224 and 185 methods. Africa and South America, like in the CROs distribution, comes with the least methods offered. If we focus specifically on France, we can count 279 methods available to evaluate the tolerance and the efficacy.

The number of methods used worldwide depends on the expertise of each CRO. We can see that classical methods such as the Corneometer (Courage +Khazaka) are used by a majority of CROs on the five continents. On the contrary, high-tech instrumentation such as the colorFace (Newtone Technologies) are used by a low amount of testing labs representing less than 10% of them. 

There are only around 20 tolerance methods due to the standardised protocols. It is the same for the consumer testing and sensory analysis with few different methods. For 20 years there is a continuous development of the biometrological tests for nail, skin, hair that explains the high level of methods. 

We can note that for middle/low innovative classical methods, almost all testing laboratories are able to implement studies while for high tech and very high-tech methods, the number of methods is lower than the number of CRO capable to answer these services. 

To finish, the hair care methods on strands represent a specific know how, innovative and a very dynamic field of study. It represents the highest number of CRO because we gathered all the claims linked to hair care together. We can note that skin hydration or facial biometrological properties and wrinkle are also the highest one.

High-tech for always science in the clinical evaluation 

About the measurement devices supporting the biometrological proof, Europe is also the leader with 66 companies on the continent providing specific and various instrumentations to analyse the skin, scalp, hair or nails performance of personal care, toiletries, make-up, or sun care. 

Naturally, the protocols that follow the claim trends are those that propose the most technological innovations. Clinical evaluation managers know that they can count on testing laboratories around the world to offer them new methods of analysis such as quantification and visualisation of skin or hair, nomadic tools supported by A.I.

If we look at the distribution of the device manufacturers, the same trends appear. Europe comes first with 61% of the devices manufacturers, then Asia (18%) and North America followed by Africa and South America. This finding is undoubtedly due to the European leadership in cosmetics and particularly in France since the 14th century. The dynamism of this sector is stimulant for the development of new technologies in France and Germany. Taking the example of Courage and Khazaka, Newtone, Eotech or Orion that spread their measurement devices in the world and are engaged process to be approved for the accreditation of specific claim substantiation in China.

In addition, it can be noted that the most studied claims are those that represent the essentials of care products such as hydration, anti-ageing and for which there is the most innovation. A good example is the study of biomechanical properties, skin structure or collagen network with recently the appearance of new devices used in routine studies. Even if the scorage by experts is very plebiscite it is also the protocols with instrumental measurements that offer the widest variety of tests since consumer tests are standardised and sensory analysis is just as standardised.

A competitive and attractive market

The competitive environment of the clinical evaluation industry for the beauty industry. Overall, this market is not so competitive for tests with high technological value requiring strong expertise (hair care, innovative methods) and sun care tests. In this case, the bargaining power of cosmetic brands is lower, and this offer is not threatened with substitution. 

For more standardised tests (classical methods, tolerance test…), supply is generally lower than global demand. The bargaining power of testing laboratories is important with crucial time management even if budgets are often fiercely discussed. Moreover, the clinical evaluation includes consumer testing that represents, worldwide, a very large majority of the in vivo studies answering the need of inclusivity (multicentric studies), the need of consumer centric research, and the need to comply with the regulations in each region of the globe. 

Specifically for sun care in vivo evaluation, the demand of tests is much higher than the offer. The index determination of SPF (UVB), UVA-PF that are following specific guidelines and Blue-Light and Infra-red need a special know-how and sponsors globally wait for shorter delivery period.

The greatest threats of substitution that reigns over clinical and biometrological tests is the development and democratisation of studies carried out on cell cultures, skin models or skin explants. With a trend towards the adaptation of measurement methods carried out in vivo to in-vitro and ex-vivo tests. These preclinical quantification or visualisation studies offer an ethically interesting alternative and in terms of time and agility (number of trials, positive reference, tailor-made test conditions). Moreover, with the advent of the AI in data processing, we can think that one day efficacy results can be obtained in-silico via algorithms as is already the case for some toxicity and safety tests. 

In addition, the influence of public authorities is very important through the regulation of cosmetics and their evaluation. The regulations imposed by the various governments are now a real barrier to the entry of brands into their market. China is the most recent example. International laboratories that are already established, need the approval of their testing process by the authorities. This barrier to entry has an impact on the testing industry. In addition, the tension in Chinese American relations affect the business relation of both instrumentation manufacturers and testing laboratories.

Finally, we can say that the global competitive context of the clinical evaluation sector is dynamic and homogeneous regarding the several criteria that influence it. There are no big dangers that can affect its good health. However, it is necessary to keep a close eye on two elements: the politics and the evolution of the regulation in specific regions and secondly the power of the biggest testing groups that are, via their external acquisition, are worldwide resizing the market.

It clearly appears that Europe is the leader in terms of cosmetics clinical testing offer. So, this continent is a solid leading place on the market, but as seen in the very first part, the Asian market has been an actor of importance for many years specifically Korea and Japan. With the new economic development era of China, we may consider that it will be the next main hub of activity of this sector in the next decades.

In conclusion

In this study, we have examined what could be the perfect marketing positioning for a testing laboratory when talking about price, advertising, communication, business development, people management, process, and proof. From the information analysis we share the profile of the typical CROs ability, looking successively to the several tasks and the laboratory organisation around its support activities and the supply chain basis. We consider all these macro and micro trends and evolution to define what are the dynamics and the future challenges of the clinical evaluation market. What could be the best components of a successful story for a testing laboratory when discussing its strengths relative to the corporate management, its values and cultural approaches, its management style, its test portfolio, its partners, and allies. Finally, we explain what the fundamentals of the sector coherence are and what make its attractiveness. We describe what competitive advantages should be needed by the actors of this sector.

To end this article, we can say that by conducting this unique and international study on clinical testing services, we had the confirmation of the vitality of this sector with a high level of expertise, a large range of testing answering the several requests of the beauty and active brands. This field of testing is dominated by the consumer tests that offer easy and cheap claim supports available all over the world. Biometrological tests with images and figures as results of performance to communicate the consumer are more and more used depending on the country cosmetics regulations. The tendency of the hair “skinification” offers new territory of testing with measurement specialists. The singular know-how of the skin biometrology that European and Asian countries have, influence the sector worldwide with classical or innovative and high-tech methods. Finally, the clinical evaluation services benefits of the influence of the dynamic, innovative, and resilient market that represents the beauty market today.