MILAN — Cosmetics exports continued to buoy the Italian beauty industry in 2013, while the domestic market remained in a slump. According to the national association of cosmetics companies Cosmetica Italia, that’s a trend likely to remain constant over the coming year.
By the end of 2013, the value of cosmetics products purchased in Italy reached 9.4 billion euros, or about $12.83 billion at current exchange, equivalent to a slight (-1.3 percent) dip on-year, while the value of exports rose 12 percent to 3.2 billion euros, or about $4.4 billion. The total production value for Italian cosmetics therefore averaged a 3 percent increase over the previous year.
“We Italians, we were never very ready for internationalization,” said Cosmetica Italia president Fabio Rossello, speaking at a conference here. “Those companies that prepared over time survived [the economic crisis] very, very well.…But [Italian] companies are learning the importance of internationalization, especially in our sector.”
He also said that despite the challenges of the domestic market, overall the Italian cosmetics sector remained relatively healthy, with a trade balance of 1.5 billion euros, or about $2 billion, compared with the 1.25 billion euro, or about $1.7 billion, trade balance of the Italian pasta industry, for instance. In addition, 59 percent of Italian cosmetics exports are sold to non-European Union countries, which has been a boon, given the EU’s current economic situation.
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Professional hair and beauty salons continued to lose steam (down 8 and 4 percent, respectively), as did traditional perfumeries (down almost 4 percent), while pharmacies registered slight growth (up 1 percent) after several disappointing semesters. Herbalist stores, considered a niche retail segment, continued to perform relatively well (up 2 percent), as did monobrand perfumery chains and department stores (up 0.5 percent).
Cosmetics manufacturers — many with a large foreign client base — also fared well, with 4 percent growth on the year and an additional 5 percent growth expected in the first half of 2014.
According to Cosmetica Italia’s survey of cosmetics companies, some consistent problems they faced included late payments from clients, fewer customers in stores, reduced profit margins due to lower product prices and high production costs.
Roberto Liscia, president of the Italian electronic commerce association Netcomm, also spoke at the conference, noting that while Italy lagged behind many other countries in the proliferation of e-commerce — in 2013, only 29 percent of Italian Internet users made online purchases — that figure is set to grow, and there are ample opportunities for Italian cosmetics companies to develop business on the Web.
Adriana Ripandelli, chief executive officer of marketing agency Grand Union Italia, agreed. “Through the Web, you can give more meaning to the relationship between brand and consumer,” she said, adding that a large number of shoppers visit both Web sites and stores before making purchases. Specifically, a Grand Union study found that of Italian consumers hunting for cosmetics, 40.3 percent bought products in stores only; 17.4 percent online only, and 42.3 percent bought items both in-store and online.
The same Grand Union study examined how well perfumery chains were able to meld the Internet and in-store shopping experiences, and found that among Italian brands, Bergamo-based Kiko came out ahead of other retail giants, such as Limoni and Bottega Verde.