COVID 19 Market News

Covid-19: impact on cosmetics market

Closed stores in shopping malls, consumers staying at home for all but essential reasons, and an economy headed for recession: the coronavirus crisis will deliver a serious blow to the cosmetics retail market in Poland in 2020.

Three scenarios for the market

PMR has drawn up three alternative scenarios for how the epidemiological situation might develop, and how this will affect cosmetics retail in Poland. The key assumption in which the scenarios differ is how long the curbs on social interactions and the operation of retail stores that the government has introduced to contain the spread of Covid-19 will last.

The restrictions, imposed on 14 March, are now officially in place until 11 April, and our most optimistic scenario assumes that that’s when they will be lifted. Our second scenario is premised on two months of restrictions. The third scenario assumes a two-month shutdown now, plus a second wave of the epidemic, and a return of restrictions, in the autumn.

Poles could spend less on cosmetics in 2020 than in 2019

Poles’ expenditures on most goods and services – particularly non-food products – have risen strongly and steadily in recent years, as household incomes grew on the back of a booming labour market and generous social transfers. But the coronavirus epidemic is reshaping consumer patterns in a major way. A substantial slowdown of the cosmetics retail market in 2020 is inevitable.

And a rapid recovery should not be expected. The epidemic will generate a protracted economic crisis during which consumers will be cutting back on non-essential purchases. They will be more deliberate in their shopping, and less motivated by impulse.

E-commerce will benefit. Who else?

How will particular distribution channels fare in 2020? According to our forecasts, e-commerce will be the standout gainer from the current situation. Its growth will not be as impressive as in the case of other non-food segments, though, where online is often the only available channel now.

Also positioned to benefit are large-format grocery stores, in which customers can find a comprehensive range of cosmetic essentials. As people try to stay at home and out of public spaces as much as possible, many will prefer to buy their cosmetics in the store where they shop for food, rather than having to visit another store.

Beauty supply stores to be a major loser

This is one reason why the cosmetics store channel will be hit particularly hard by the epidemic, according to our predictions. Although drugstores stay open, many consumers are moving their cosmetics shopping to grocery stores or online due to safety concerns.

The second reason, of course, is that cosmetics stores in shopping malls that derive most of their revenue from the sale of perfume and beauty products – including perfumeries such as Douglas or Sephora, and colour cosmetics stores such as Inglot or Paese – have been ordered to shut.

Only in the most optimistic of our scenarios will the drugstore/cosmetics store channel avoid a contraction in sales value in 2020.

Which product categories will benefit?

The epidemic will have a negative, and at best a neutral, impact on almost all major categories of cosmetic products. Only the category of body care and bath cosmetics could experience a short-term boost in sales value, due to the coronavirus-induced spike in demand for personal hygiene and handwashing products such as soap and antibacterial gel.

The analysis comes from a new report by PMR, “Impact of the coronavirus epidemic on the cosmetics market in Poland 2020.”

Leave a Comment

Your email address will not be published.

You may also like

Market News Trends

Polish state to consolidate the agri-food sector

post-image

The Ministry of State Assets (MEP) is working on the merger of companies from the agri-food sector, which are under state supervision. The National Food Holding (NHS) is to be established in this way.

June: selection of companies for the holding company

The consolidation will be based on the Krajowa Spolka Cukrowa, which is present on several markets, including sugar, starch and grain. The objective is to create a strong agri-food holding and enter new business segments. The idea behind the consolidation undertaken by MEP is that “on the one hand, consumers should receive competitive prices, and on the other hand, farmers and manufacturers should be well paid for their products”.

Currently, 48 companies that could be part of the holding are being analysed. The plan provides that the companies to be consolidated are to be selected in June. By the end of the year, more detailed research…

Read More
Market News

Robotisation in retail & logistics – overview for 2020, part II

post-image

Bartłomiej Łatka, Sales Director at Euvic IT, writes in the second part of the article about what robotization has to offer to the retail segment in 2020.

Mobile robots

Bartłomiej Łatka, Sales Director at Euvic IT

Recently, mobile robots have been pushing people out of storage space in large warehouses. There is a shortage of warehousemen throughout Poland, and warehouses often located on the outskirts of cities or even in the fields, struggling to provide staff. Especially during the holiday or flu season. Relatively high salaries, regulated by the law for working at night or on public holidays, as well as the risk of loss of manning – all that makes automated internal transport systems seem to have the best years ahead.

Among mobile solutions in trade and logistics we can distinguish the following groups:

  • Transport P2P (Point-to-Point) – AMR trolleys carrying baskets…
Read More
Market News

Glovo grows in food delivery in Poland

post-image

The Glovo mobile application, which specialises in on-demand deliveries, has just exceeded 1 million downloads in Poland (App Store and Google Play). Although a wide range of products can be ordered with Glovo, it is widely used to deliver food.

Glovo in Poland: 1 million application downloads

Glovo has been operating in Poland since July 2019, following the acquisition of PizzaPortal.pl. The idea behind the application is to be able to order “anything” and delivery takes place in less than an hour. Glovo has over 2,700 partner points in Poland, including McDonald’s and KFC restaurants and Biedronka and Carrefour shops. The application operates in 30 cities in Poland, but Glovo announces a systematic expansion of its offer and development of all order categories. In total, around the world, the application is used by approximately 2.6 million users per month. It is available in 22 countries and about 550 cities.

The most numerous…

Read More
Market News

Tesco is developing a click & collect service in Poland

post-image

Tesco develops its activities in the e-commerce segment. In May, the company added five new cities for the “Zamow i odbierz” (click & collect) service in Poland.

14 click & collect points

New locations where the service is available are Czestochowa, Zielona Góra, Opole, Kielce and Jelenia Gora. Thanks to the extension of the network of collection points, it is now possible to serve 15% more customers under this solution. In total, currently the click & collect option is available in 14 Tesco stores across the country. Around 2,000 customers use such purchases every week. The chain announces that it will soon introduce further novelties extending the scope of services.

Purchases made in the “Zamow i odbierz” option can be picked up in the store or delivered home by a taxi company cooperating with Tesco. When completing an order via taxi, payment must be made online. In case…

Read More
Market News

Robotisation in retail & logistics – overview for 2020, part I

post-image

As far as saturation with robots is concerned, the Polish market is unfortunately in the tail of the rankings, which is quite surprising if we take into account, for example, Polish GDP (where we have 22nd place in the world) or Human Development Index (Poland with 32nd place in the world).

Bartlomiej Latka, Sales Director at Euvic IT

In 2014, roboforum.pl wrote that “Poland, with the value of the index at 18, is at the bottom of the ranking. Higher density of robotization than Poland is characteristic not only for countries that are among the leaders in this respect, but also for countries with a similar level of development, such as Hungary or Slovakia. The average robotisation density in Europe is 4.4 times higher than in Poland (compared to the previous year, Poland reduced the distance to Europe by 1.1 points),…

Read More
Market News

Camaieu is leaving Poland

post-image

Camaieu clothing chain, specialising in women’s clothing, is leaving the Polish market. The company’s website has already stopped accepting orders and the stationary stores are to be closed at the end of June.

Camaieu is looking for an investor

As far back as 2018. Camaieu operated about 40 stationary stores in Poland. However, the chain has recorded negative sales dynamics in recent years, and the number of stores has been gradually decreasing. Currently, it amounts to 25. In total, the chain operates about 1 ,000 stores in 18 countries, more than half of which are located in France.

The COVID-19 pandemic and the closure of shops in shopping malls have worsened the company’s situation, but it has already been struggling with financial problems. According to Business Insider, the company planned to implement a restructuring plan from the spring, which was to include the closure of 125 stores in…

Read More