BOLOGNA — The Italian cosmetics market is sagging under the weight of the European economic crisis, and consumers are altering their shopping habits. The market remains highly segmented: Perfumeries and professional salons have felt the burn, while herbalist shops and single-brand makeup stores are performing well.
Fabio Rosello, president of Unipro, the Italian association of cosmetics companies, recently stressed the need for the beauty industry to focus on developing exports and promoting the high-quality products for which Italy is known.
“Italian pride — we have to feel it,” he said at a conference earlier this month, adding that Italy makes approximately 65 percent of the world’s makeup. Top importers of Italian cosmetics include Germany, France, the U.K., the U.S. and Spain, although Singapore, China, the Ukraine and Saudi Arabia are fast becoming key players.
In Italy, “We maintain that 2013 will see continued growth in production value, and therefore in companies’ turnover — exclusively thanks to exports — while the internal market will be flat or down,” said Gian Andrea Positano, area manager at Unipro’s research facility.
Alessandro Conti, account director for beauty innovation at Mintel, said Italian companies need to invest heavily in exports. “They need to look to the markets that are growing and where there are new consumers who are ready to approach Italian products,” he said.
One such market is Asia, home to 60 percent of the world’s population. Conti noted that a growing number of Chinese citizens are traveling and buying luxury items. “The average age of a millionaire [there] is 39, and 30 percent of them are women,” he said, adding this population segment presents significant opportunities for the cosmetics industry.
Still, Italian companies looking to build business ties in Asia will need to compete with existing brands there — in Korea, Taiwan and Japan, especially — that are more familiar with local consumer needs.
In Italy, perfumeries (22.8 percent of the market) and pharmacies (18.2 percent) both registered sales drops in 2012 over 2011, according to a Unipro report. The organization suggested that for perfumeries a gap between loyal and occasional customers, as well as a lack of innovation in stores, was behind the 4 percent sales decrease.
Pharmacies, which saw an overall 1.4 percent decrease in sales, still received high ratings from customers on service and expertise. The past year has brought numerous changes to the channel: Former prime minister Mario Monti introduced a series of liberalizing measures in 2012, which eliminated a mandatory distance between one pharmacy and another, imposed a maximum age of 65 for pharmacy managers and reduced the number of customers each pharmacy is expected to serve, allowing many new businesses to open. Federfarma, the Italian association of independent pharmacists, continues to voice its displeasure with the changing regulations.
Last year was also challenging for professional hair salons, which registered a 6 percent drop in cosmetics and beauty sales. Positano said Italians are going to salons less frequently, and cited a study showing that a woman who a few years ago went to a salon every 33 days now goes every 45 days.
On the other hand, herbalist shops performed well, with sales up 5 percent over 2011. Positano noted that consumers are drawn to the perceived added value of “healthy” and environmentally friendly cosmetics at accessible prices. Door-to-door, mail-order and Internet sales of cosmetics also increased, although they each retain a small share of total distribution.
The top categories of products for Italian consumers were body care (16.5 percent), facial care (15.1 percent), hair care (14.1 percent) and body hygiene (13.2 percent), with roughly 72 percent of the market dedicated to women’s products and 28 percent to men’s. Consumers continued to drift away from products perceived as nonessential, such as anticellulite and toning lotions, down 19.6 and 17.7 percent, respectively, from 2011 to 2012.
Makeup was the only category that defied general market trends and showed solid growth, with the liners and pencils segment alone up by a full 9.8 percent, accounting for more than 104 million euros, or $135 million at current exchange. The popularity of single-brand makeup stores is on the rise, and Positano noted that even when consumers are budget-conscious, most “won’t give up perfume, high-quality creams or makeup.”