The British - along with the Scandinavians - are the biggest make-up spenders in Europe, the report claimed.
It said that sales of mass-market brands were on the rise, creating more of a market in discount stores.
Datamonitor analyst John Band said: "Face and eye make-up are consistently the largest two categories across make-up markets.
"They’re seen as basic necessities, whereas lipstick and nail varnish are seen as something dispensable that you might only wear for a night out."
He said total make-up sales in the UK were £265m in 2002, including £170m spent on foundation and concealer.