French cosmetics exports stall in 2025 as US tariffs shave €541m and reshuffle global flows

Table of Contents

1. Key Highlights:
2. Introduction
3. How tariffs and a softer dollar combined to dent US demand
4. EU markets: a stabilizing core and the productivity of proximity
5. Asia and the Middle East: mixed results and rising local competition
6. Category performance: fragrances and haircare anchor resilience
7. Korea and Asia’s ascent: a competitive inflection point
8. Trade balance and imports: Asian exporters gain ground in France
9. Structural forces reshaping the industry: regulation, sustainability and supply chains
10. Free-trade agreements and new openings: India and Indonesia in focus
11. Strategic responses deployed by French brands and players
12. The role of policymakers and industry associations
13. Long-term outlook: risks and structural opportunities for 2026–2030
14. Practical recommendations for exporters, investors and policymakers
15. What success looks like for the French cosmetics industry
16. FAQ

Key Highlights:

• French cosmetics exports contracted by 0.1% in 2025 to €22.4bn, the first year-on-year decline (excluding the Covid period) since 2008, driven primarily by a 19% fall in shipments to the United States.
• EU markets expanded by 4% and now account for 54.3% of French beauty exports; perfumes and haircare were the strongest-performing categories despite overall stagnation.
• FEBEA flags continued risk in the US but identifies offsets in new free-trade opportunities (India, Indonesia) and rising regional demand, while competition from Korean and Asian players intensifies.

Introduction

France remains the world’s preeminent beauty exporter, but 2025 exposed vulnerabilities in a sector long seen as resilient. Exports slipped to €22.4bn—down €100m from the prior year—after American customs duties and a weaker dollar combined to depress shipments across the Atlantic. That loss wiped €541m from exports to the United States and ended a decade-plus streak of steady growth. The contraction punctures assumptions that prestige, heritage and product desirability alone guarantee expansion. The industry now faces a recalibration: leaning harder on solid EU demand, exploiting new trade openings, and responding to surging competition from Korea and other Asian suppliers while protecting margins and French brand equity.

What follows unpacks how tariffs and currency shifts produced the downturn, where growth persisted, which product categories carried resilience, how competition is reshaping market share, and what practical steps manufacturers and policymakers can take to stabilize and grow exports going forward.

How tariffs and a softer dollar combined to dent US demand

The single largest driver of the 2025 export setback was the sudden retreat in shipments to the United States. FEBEA reports a near 19% fall in cosmetics exports to its largest market, driving down net exports to €2.4bn and erasing €541m in value. Two dynamics were key.

First, US customs duties applied to French cosmetics increased landed cost for importers and downstream retailers. Higher tariffs translate directly into higher shelf prices for consumers unless brands or distributors compress margins. For premium and prestige segments—where pricing sensitivity can be lower—the effect still matters when the tariff adjusts relative price positioning versus local alternatives or other imported brands. For mass and mid-market segments, higher landed costs can be decisive in shifting consumer preference toward domestic or lower-cost foreign substitutes.

Second, the depreciation of the US dollar against the euro magnified the tariffs’ effect. A weaker dollar reduces the dollar-denominated purchasing power of US buyers. For euro-priced exporters, this reduces competitiveness unless firms implement hedging strategies, local production, or currency-based pricing adjustments. When tariffs are layered on top of an unfavorable exchange rate, the cumulative impact becomes greater than either factor alone.

The result in 2025 was not only a decline in shipment value but also strategic disruption. Retailers and distributors re-evaluated assortment and promotional plans; some global players accelerated local production or adapted formulations to avoid tariff exposure. FEBEA warned the US market remains at risk in 2026, indicating that unless tariffs are rolled back or mitigated by other commercial measures, further losses are likely.

EU markets: a stabilizing core and the productivity of proximity

While the US faltered, the European Union emerged as the sector’s stabilizer. Exports to the EU grew 4% and now represent 54.3% of French cosmetics exports, equivalent to €12.1bn. Proximity advantages—shorter logistics, lower transport costs, streamlined regulatory alignment through EU frameworks, and established distribution partnerships—helped firms redirect emphasis toward nearby markets.

Within Europe, the United Kingdom posted modest growth (+2.9%), while other EU member states accounted for the larger share of the uptick. The EU’s expansion demonstrates the resilience of intra-European trade flows and illustrates a practical buffer: when long-haul markets face barriers, short-haul partners absorb some of the slack. That buffer has limits. Domestic competition and saturation in some EU markets constrain growth potential, and local brands that have scaled across Europe present new rivals.

The EU’s role as a base underlines a strategic priority: leveraging regional supply chains, fast replenishment models and EU regulatory harmonization to sustain volume and protect brand presence. Brands revisiting allocation strategies in 2025 often concentrated marketing spend and product launches in Europe, where the return-on-investment was more certain.

Asia and the Middle East: mixed results and rising local competition

Asia delivered uneven outcomes. China, traditionally a major growth engine for luxury and prestige beauty, showed only marginal growth (+1.2%), with French exports to China totaling €1.8bn. The modest increase reflects both cautious consumer spending patterns in certain categories and intensifying competition from homegrown brands and other exporters.

Other Asian regions displayed more volatility. The 11 ASEAN countries collectively registered a 10% decline in French cosmetics exports. Multiple factors account for that slide: stronger local and regional players, shifting consumer preferences toward K‑beauty and C‑beauty formats, and the lingering effects of post-Covid channel realignments where e-commerce ecosystems favor digitally-native brands with mastery of social commerce and localized content.

The Middle East, notably the UAE, bucked regional softness with an 8% expansion. The UAE remains a hub for luxury retail and travel retail, with strong demand in perfumes and high-end skincare. The country also serves as a distribution springboard for neighboring Gulf Cooperation Council (GCC) markets.

These mixed regional outcomes highlight a broader strategic imperative: blanket global strategies no longer suffice. Brands must deploy differentiated market playbooks tailored to local channels, price points and consumer cultural codes.

Category performance: fragrances and haircare anchor resilience

Examining performance by category reveals where French strengths held. Make-up and skincare together still account for nearly half of international sales (€11bn, 49% of total), even though they declined 2.1% in 2025. Perfumes remain a critical pillar—€8bn in exports, representing 36% of the total, and exhibiting 1.9% growth. Fragrance exports have more than doubled in six years, reflecting the enduring global cachet of French perfumery and its ability to translate heritage into export value across price tiers.

Hair care delivered notable growth (+5.5%, totalling €1.5bn). Hair care’s performance confirms a broader consumer tendency toward routine personal care products that combine functional benefits with premium positioning. Unlike high-fashion categories tied to discretionary spend and seasonal trends, hair care and fragrances are redeemed through repeat purchases and strong brand loyalty.

The category split underscores a key structural advantage: French perfumery combines intangible cultural capital with scalable manufacturing and distribution practices. Where makeup and skincare require continuous innovation, product reformulations and rapid social activation, perfumes offer enduring heritage assets that translate more consistently across markets. Hair care’s steady growth provides volume stability and balance against volatility in higher-end cosmetics.

Korea and Asia’s ascent: a competitive inflection point

FEBEA contrasted French performance with Korean cosmetics, which grew 12% globally in 2025. That surge reflects several elements: agility in product development, mastery of social commerce and influencer marketing, strong e-commerce ecosystems, and competitiveness on price without sacrificing perceived innovation.

K‑beauty’s playbook—fast product cycles, emphasis on unique formulations and aesthetics, and digital-native distribution—continues to carve market share, particularly among younger consumers. Korean players also benefit from public and private investments that support export promotion, brand-building and regulatory facilitation in target markets.

China’s domestic brands are also gaining sophistication. Chinese manufacturers have moved beyond price competition to invest in R&D, branding and premiumization. Their ability to harness domestic scale and cross-border e-commerce supports competitive pressure in Southeast Asia and beyond, partially explaining ASEAN’s -10% for French exports.

European incumbents must respond on multiple fronts: accelerate product development cycles, embrace localized digital strategies, optimize unit economics to compete on selected price points, and double down on segments—fragrance, luxury perfumery—where French heritage remains a dominant differentiator.

Trade balance and imports: Asian exporters gain ground in France

Although France’s cosmetics trade balance remained strongly positive—close to €17bn in surplus in 2025—imports grew by 6% (€5.4bn), largely driven by Asian exporters such as South Korea and China. This inward flow indicates stronger local demand for foreign brands and suggests a two-way reconfiguration of trade: as French exporters calibrate their global allocation, foreign brands increase their presence in France’s domestic market.

An expanding import profile carries strategic implications. Increased domestic competition pressures French brands to innovate and defend their home markets, where reputation alone no longer guarantees dominance. It also creates opportunities for collaborative ventures, co-development and acquisition strategies where French firms can secure footholds in Asian supply chains or acquire advanced digital capabilities.

Maintaining a positive trade surplus is important for the French economy, but rising imports reflect evolving consumer choices and globalization of beauty supply. Companies that read this as a warning and a call to action will focus on fortifying brand equity, improving speed-to-market and investing in customer engagement capabilities.

Structural forces reshaping the industry: regulation, sustainability and supply chains

Several structural forces influence the sector beyond tariffs and currency.

Regulatory alignment and non-tariff barriers remain central. Cosmetic product registration, labelling requirements and ingredient scrutiny differ across jurisdictions. The EU’s regulatory frameworks are widely respected but can be a barrier to quick entry into markets with different requirements. Streamlining regulatory compliance and investing in global regulatory intelligence gives exporters a competitive edge.

Sustainability is no longer an optional differentiator. Brands with credible sustainability claims—carbon reduction across the supply chain, ethical sourcing of natural ingredients, recyclable or reusable packaging—unlock new customer segments and reduce regulatory risk. French brands already emphasize ecological transition, and FEBEA cites those commitments as assets. That credibility helps in markets where consumers are skeptical of greenwashing and where governments are tightening environmental standards.

Supply chain resilience matters. The tariff shock in the US exposed vulnerability when final goods cross borders. Some companies will respond by localizing manufacturing, adjusting product formulations to permissible ingredient lists, or diversifying logistics to minimize exposure. Shortening supply chains—moving certain production steps closer to final markets—reduces currency and tariff exposure but often increases fixed costs. Firms will balance these trade-offs based on product value, margin profile and strategic importance of each market.

Finally, digital transformation—particularly social commerce, livestreaming and micro-influencer ecosystems—is decisive in Asia and increasingly relevant in Western markets. Brands that blend digital-first marketing with efficient omnichannel fulfilment will capture market share more readily than those that rely solely on traditional retail networks.

Free-trade agreements and new openings: India and Indonesia in focus

FEBEA highlighted free trade agreements (FTAs) with India and Indonesia as potential offsets to US weakness. FTAs can reduce tariff barriers, simplify customs procedures and create preferential rules of origin that favor regional procurement and manufacturing strategies.

India, with a population exceeding 1.4 billion and growing beauty consumption, represents an attractive long-term opportunity. However, market entry poses challenges: fragmented retail, regional distribution heterogeneity, and price sensitivity in many segments. FTAs can lower initial friction, but success will depend on targeted product strategies and local partnerships.

Indonesia, Southeast Asia’s largest economy by population, offers access to a young consumer base and rising urbanization. Preferential trade terms could make French goods more competitive versus Asian rivals and facilitate deeper investment in distribution and localized manufacturing.

Both countries illustrate a broader strategic pivot: when traditional markets slow, expanding in large, higher-growth economies becomes a priority. FTAs are enablers but not panaceas; companies must still localize assortment, comply with regional regulatory requirements and build trust through sustained marketing and distribution investment.

Strategic responses deployed by French brands and players

Large French firms and smaller maisons adjusted strategies in 2025. Common responses included:

• Reallocating marketing budgets toward Europe and high-growth pockets like the UAE.
• Accelerating product launches in resilient categories—fragrances and haircare—that promise faster revenue ramp and repeat purchase dynamics.
• Investing in digital channels and e-commerce logistics to capture consumer attention and reduce dependency on traditional retail footfall.
• Exploring nearshoring and dual-source production to mitigate tariff and currency exposure.
• Partnering with local distributors or acquiring stakes in foreign platforms to secure shelf space and improve last-mile control.

Leading conglomerates—L'Oréal, LVMH, Chanel and others—have historically used a mix of these tactics. Their scale allows for investments in localized production, advanced marketing analytics, and diverse channel strategies. Smaller brands must be more surgical: focusing on niche differentiation, leveraging online marketplaces, and partnering with regional influencers to drive penetration at lower cost.

Case example: a mid-size French perfume house responding to tariff pressure might increase direct-to-consumer sales in the US via a local subsidiary that imports semi-finished components rather than finished goods, reducing duty exposure while maintaining brand integrity. Simultaneously, it could expand flagship boutiques in Europe and the UAE to offset revenue erosion.

Another example: a haircare firm could partner with a regional contract manufacturer to produce region-specific SKUs, reducing logistics costs and adapting formulations to local consumer preferences without abandoning the “Made in France” brand story for premium lines.

The role of policymakers and industry associations

Policy levers are crucial. FEBEA’s role in aggregating data and lobbying on behalf of the industry matters for three reasons: it provides an early-warning signal, coordinates industry responses, and advocates for mitigation measures with governments.

Potential policy actions include:

• Diplomatic engagement to reduce tariffs or negotiate exemptions for cultural/heritage industries.
• Export support programs that subsidize market entry costs, trade missions and regulatory compliance.
• Incentives for local manufacturing investments abroad to maintain competitiveness in tariff-impacted markets.
• Strengthened intellectual property protections to prevent dilution of brand equity in foreign markets.

Industry associations can also foster knowledge-sharing around best practices—currency hedging, supply-chain reconfiguration, e‑commerce scaling—and convene public-private dialogues around FTAs and regulatory harmonization.

Governments aligned with industry interests will prioritize rapid negotiation of bilateral agreements, investment support for exporters, and tailored programs to help SMEs adapt to the new trade environment.

Long-term outlook: risks and structural opportunities for 2026–2030

The immediate outlook for 2026 hinges on three variables: the persistence of US tariffs, currency trajectories (dollar vs. euro), and the pace at which competitors consolidate gains in digital channels and lower-cost segments.

If tariffs persist, expect further export pressure to the United States. Many brands will respond by accelerating localization of manufacturing and shifting marketing emphasis to the EU, Middle East and selected Asian markets. The net impact on global market share will depend on how successfully French firms translate heritage into digital-native narratives that resonate with younger consumers.

Longer-term opportunities remain substantial. France’s strengths—perfumery, luxury positioning and a deep ecosystem of ingredient suppliers and contract manufacturers—remain valuable. Continued investment in sustainability, clinical validation (for skincare), and a stronger presence in e-commerce will help preserve global competitiveness. Strategic M&A, selective joint ventures in emerging markets and targeted pricing strategies can also counterbalance tariff-related headwinds.

Competition will intensify. K‑beauty and Chinese brands will maintain pressure, particularly at accessible price points and on innovation-driven SKUs. French firms will have to choose where to defend margins and where to cede ground in favor of volume or strategic partnerships.

A scenario-based view:

• Best-case: Tariffs ease or are offset by currency swings; EU and Middle East growth accelerates; FTAs unlock new corridors. Exports rebound to historical growth paths.
• Middle-case: Tariffs persist but companies adapt through localization and market reallocation; export growth remains modest but stable.
• Downside: Tariffs harden, competition accelerates digitally, and brands fail to adapt; export share erodes with longer-term consequences for jobs and ecosystem players.

Practical recommendations for exporters, investors and policymakers

Exporters:

• Prioritize markets with favorable trade terms and strong digital adoption where you can control the customer relationship.
• Invest in local distribution partners and consider partial onshore production to avoid tariff escalation on finished goods.
• Strengthen e-commerce fulfilment capacity and engage directly with consumers through regional digital marketing teams.
• Accelerate sustainability initiatives that resonate with regulators and consumers; transparent reporting will become table stakes.

Investors:

• Evaluate exposure to US tariff risk across portfolios and favor firms with diversified regional revenue or visible localization strategies.
• Monitor smaller players with strong digital traction; these can be acquisition targets for larger conglomerates trying to buy speed.
• Consider infrastructure plays—regional manufacturing, packaging innovation, logistics providers—that benefit from nearshoring trends.

Policymakers:

• Engage on tariff negotiations and proactively pursue FTAs with high-growth markets where France has competitive advantages, such as India and Indonesia.
• Provide targeted export support to SMEs in cosmetics, including regulatory compliance assistance and digital marketing training.
• Encourage public-private dialogue on sustainability standards to protect both consumer safety and brand integrity.

What success looks like for the French cosmetics industry

Success will be measured by the industry’s ability to preserve brand equity while adapting its operating model to a more fragmented trade environment. That includes:

• Restoring export growth to a multi-year trend line by diversifying markets and accelerating digital penetration.
• Protecting the perfumery and premium segments where French brands command pricing power.
• Building resilient supply chains that reduce vulnerability to single-market shocks.
• Maintaining the trade surplus while adapting to a more competitive global marketplace.

France’s historical advantages—craftsmanship, recognized quality and strong global brand recognition—remain assets. The test ahead is operational: converting intangible strengths into repeatable, scalable commercial execution across a broader set of markets.

FAQ

Q: Why did French cosmetics exports fall in 2025? A: The primary cause was a 19% decline in shipments to the United States after new American customs duties were applied, compounded by a depreciation of the US dollar. This combination raised landed costs in the US and reduced competitiveness, resulting in an overall 0.1% contraction in exports to €22.4bn.

Q: Is the decline only due to US tariffs? A: Tariffs were the main shock in 2025, but other factors played supporting roles: currency movements, increased competition from Asian exporters (notably South Korea and China), and regional variations in demand contributed to the overall stagnation.

Q: Which product categories held up best? A: Perfumes and haircare were the strongest performers. Perfume exports grew 1.9% to €8bn and have more than doubled in six years, while haircare expanded by 5.5% to €1.5bn. Make-up and skincare remain dominant in value but saw a small decline.

Q: Did any regions grow despite global headwinds? A: Yes. The European Union grew by 4%, increasing its share of French exports to 54.3% (€12.1bn). The UAE also recorded strong growth (+8%), and the UK showed modest expansion (+2.9%). China grew slightly (+1.2%), though ASEAN markets overall declined.

Q: How did competition from Korea affect French exports? A: Korean cosmetics recorded a 12% global increase in 2025, demonstrating strong competitiveness especially in digital channels and fast product cycles. That growth translated into stronger competition in many markets, exerting downward pressure on French export volumes in certain price segments.

Q: What steps are French companies taking to respond? A: Firms are reallocating marketing toward resilient regions, investing in digital and e-commerce, exploring nearshoring or localized production to mitigate tariff exposure, and doubling down on sustainability credentials. Larger groups use scale to invest in regulatory compliance and regional manufacturing.

Q: Will free-trade agreements (FTAs) help? A: FTAs with countries such as India and Indonesia can reduce tariff and non-tariff barriers, making French goods more competitive in those markets. FTAs also enable new sourcing and manufacturing strategies that can offset losses in other markets. However, FTAs require complementary commercial strategies and localization to realize their full potential.

Q: What should policymakers do to support the industry? A: Policymakers can negotiate tariff relief, provide export support for SMEs (regulatory assistance, trade missions, market intelligence), and incentivize investments in regional manufacturing. Public-private collaboration on sustainability standards and export promotion will also help.

Q: How likely is further decline in 2026? A: FEBEA warned of continued risk in the American market and forecasted a potential further decline in 2026 if tariffs and currency conditions remain unfavorable. The precise outcome will depend on policy developments, corporate adaptation strategies and competitive dynamics in target markets.

Q: How does this affect the broader French economy? A: Cosmetics remains France’s second-largest export sector and a significant employer across manufacturing, R&D and retail. A sustained export decline would have knock-on effects on employment, trade surplus and the broader luxury and consumer goods ecosystem. Short-term adjustments can mitigate impacts, but long-term competitiveness will require structural adaptation.

Q: Can “Made in France” remain an advantage? A: Yes. The “Made in France” label retains strong global desirability, especially in fragrance and high-luxury categories. That advantage must be supported by innovation, sustainability and effective digital storytelling to resonate with evolving consumer segments across geographies.

Q: Where should investors look for opportunities in the current environment? A: Opportunities exist in companies that can scale digital sales, regional manufacturing and packaging recyclability solutions, as well as in niche brands with strong digital traction that could become attractive acquisition targets for larger groups seeking rapid market access.

Q: What lessons should smaller brands take from 2025? A: Smaller brands must prioritize market focus, optimize digital channels for direct-to-consumer growth, seek regional partnerships to limit tariff exposure, and emphasize product differentiation—whether through sustainability, formulation, or brand storytelling—to maintain margins.

Q: What is the long-term prognosis for French cosmetics? A: The long-term outlook remains cautiously optimistic. Core strengths in perfumery, luxury and manufacturing know-how provide a foundation for recovery. However, the sector must adapt strategically—diversifying markets, investing in digital capabilities, and navigating regulatory and trade changes—to sustain growth in a more competitive global environment.