Wpis dostępny jest także w języku: polski
As a result of the precarious economic situation caused by the coronavirus, growthof cosmetic market will significantly slow down in 2020. – increasing by 1.6% y-o-y. This is the lowest growth in comparison to the last years (2010-2019), where this market has recorded average annual growth by 4%.
Recent years have been characterised by growth in Polish cosmetics market, which has been affected, among other things, by growing consumer awareness of care and a growing disposable income, driving up expenditure on cosmetics.
Although we are forecasting a decline in private consumption in 2020, partly due to the less favourable financial situation of households than before the pandemic, we believe that the cosmetics market still has a growth perspective ahead of it. Although the market will have its lowest growth rate in years, at 1.6%.
Among the factors that will have a positive impact on the market in 2020 can be mentioned:
- The fact that, by going out less often, we have more time for conscious care, which results in care experiments we have not had time for before. By driving cosmetic shopping in this segment.
- The temporary restrictions on beauty services have also had a positive impact on cosmetics retailing. The inability to use certain beauty services pushed the consumer to perform these treatments at home, driving individual purchases of nail polish and hair dyes.
- The expansion of e-commerce will also have a positive impact on cosmetics market. As a development not only in the context of consumers’ migration to this channel, at the expense of others. But also the greater availability of products to a wider range of consumers.
COVID-19 with positive effects on e-commerce and food discounters
Naturally, the impact on various market channels will be different – the initial situation (stock purchases or complex purchases in a single shop) has been largely influenced by the large-format shops – mainly grocery discounters.
The direct sales channel, which have benefited from contactless purchases, will also benefit from this situation. However, this year on year growth will not be impressive, given the channel’s declining popularity among consumers and the transfer of transactions to the Internet. The largest companies in the channel – Avon and Oriflame – already offers online sales opportunities.
The situation at the beginning of the outbreak also gained pharmacies, where cosmetic purchases were made on the occasion of other purchases. However, in the following months, these sales fell dramatically and we therefore forecast that this channel will see negative sales growth compared to 2019.
However, the channel that will gain the most and in the long term from the current situation will be internet. It is by the reluctance of consumers to visit congested places or leave home. Also in favour of the internet – although drugstores among the few shops did not include restrictions on closing shops – there were limits on the number of people in the shop at the same time, which prolonged purchases in stationary drugstores. In addition, cosmetics and drugstores, in the vast majority of cases, have online stores which cannibalise sales in their brick-and-mortal stores, including those opened.
Moreover, in the long term, we believe that the coronavirus will prove to be a positive factor in the development of online sales of cosmetic products, too, and that some consumers who have started out may find themselves convinced to shop online and stay with them.
The segments of care cosmetics will increase compared to 2019
Body care and bathing cosmetics are the largest segment of the cosmetics market in Poland, which cannot come as a surprise, given the widespread use of this type of product and the fact that they constitute the basic cosmetic base for both genders. In 2019, this segment was responsible for 24% of the market, and in 2020, this share will increase (by 1.5 p.p. – to almost 26%), due to the increased interest of consumers in hygienic and washing products such as soaps and antibacterial gels.
The positive influence of COVID-19 will also be visible in the segments of face care and body hair removal cosmetics – both of these segments will be positively influenced by, among others, temporary closure of services (especially in the case of epilation) and more time for care.
For other segments, the impact of COVID-19 will be rather negative or at best neutral
We predict the neutral effect of coronavirus for the segments: oral hygiene, hair care and styling, cosmetics for children. These are everyday products, which we will not give up if shops are closed, and to a lesser extent, they are impulse products (apart from hair care), which we buy with other purchases. On the other hand, brand awareness and the ability to get used to a particular product will not result in significant savings in these segments
The segments most affected by the negative effects of the COVID-19 epidemic will be dermocosmetics, perfumes and colour cosmetics. This is due to the fact that, in the face of the crisis, consumers will give up purchases which are not necessary. Shopping will be more thoughtful and less impulsive. And the limits on shoppers in shops extending their purchases have discouraged them from visiting recreational shops, which are conducive to impulse purchases. In the case of colour cosmetics, the home office, less frequent leaving the house or covering your face with masks at all exits will also have a negative effect. On the other hand, this segment will be positively affected by the return of hair dyeing at home, the purchase of own hybrid manicure lacquers or the lack of artificial eyelashes (return to mascara painting).
About the author
Retail Market Analyst
Analyst with over three years of experience in retail market. Areas of specialization: clothing and footwear market, cosmetics market and e-commerce.