Good prospects for Italian cosmetics

2015 according to Cosmetica Italia: consumers and enterprises “factor in” the crisis, and Italian industry’s production is set to break the threshold of 9,600 million euro.

For the cosmetics sector, 2015 began with a general improvement of economic indicators, as shown by the periodical economic study conducted by Cosmetica Italia’s research center. The report begins with a brief examination of the Italian economy as a whole, estimated at 0.7%. This forecast of improvement is defined by Fabio Rossello, president of Cosmetica Italia, with the cautious oxymoron “theoretically real”.  Rossello stated during a press conference in Milan on 21 July: «Along with the recovery of the domestic market, which in recent fiscal periods had slowed in growth, there is an attitude of “factoring in” the crisis, both on the part of consumers and on that of concerns. According to our projections, by late 2015 the value of production will exceed 9,600 million euro (+3%), once again sustained by the competitiveness of the Italian offer in foreign markets. Indeed, exports will reach 3,600 million euro by the end of the year, representing 8% growth, and the balance of payments will break all previous records». This meshes with the sentiment among sector operators - about 80 of which participated in the survey - that are beginning to plan investments again, relying on the opening, however meagerly, of the credit system. What about contrasting factors? The usual ones: outstanding and late payments, burdensome taxes and bureaucracy. The price of raw materials, on the other hand, appears stable, although - Rossello points out - it is easy to see that it will probably rise rapidly as the economy takes off.

Direct sales back with a vengeance Few surprises and a few points of interest emerge from an examination of retail.
• The shrinkage of professional channels continues but is slowing down. These enterprises are penalized by the fewer number of steps in their process: after the -4% of 2014, professional hairstyling passes to -2.4% expected for late 2015, while beauty salons will approach 230 million euro (-3.5%) and perfumeries 2,050 million (-1%).
• Albeit with differences according to type and surface, mass markets show modest growth (+0.7%), bringing the outlet’s total value to 3,800 million euro. More decisive, on the other hand, is the growth of subcontracting, which, positioning itself upstream of the production chain and more cross-cutting than channels,
grows by 3.8%.
• On the wave of widespread interest in natural products, herbal shops continue their growth of recent years and will end the year with +3%, also showing a certain proclivity toward experimenting.
• Consumer confidence in pharmacies is once again confirmed, albeit in a tempered form, with +1.5% during the current year.
• Finally, the growth of direct sales continues with above average rates. This channel now involves more than 5% of cosmetics and exceeds 550 million euro. Rossello is also careful to point out that this is not just about online channels, but also “goold old fashioned” door-to-door sales, which currently take the form of the salesperson arranging a meeting with a group potential buyers in one of their homes. This is far from the solitary and often hurried purchase made online. A need for personal connection?

Beauty Trend Watch and Cosmetic Awards Gian Andrea Positano, director of the research center, presented the online questionnaire “Beauty Trend Watch”, a “container for future trends” that Cosmetica Italia is unveiling this year, created by a convergence of experts, operators and web platforms. The ambitious goal is to shed light on the issues that will set the conditions for the future of products, consumers and distribution channels, in such a way offering concrete points for market analysis. The authors (“chroniclers of the future” as Positano jokingly refers to them) have identified a few drivers that are orienting consumer decision-making, and will orient it more and more as time goes on: E-commerce, multi-channel distribution, social media, natural/organic and multi-functionality. These factors play a larger or smaller part depending on the product type in question. In addition to Beauty Watch Trend, at the July event two other initiatives were signaled, developed in order to multiply the effectiveness of the sector’s communication and promotional activities. Cosmetica Italia’s website, redesigned in order to make documents, studies, videos and images more accessible, was illustrated by Pamela Parroco, the association’s IT director. Then Benedetta Boni, communications director and the event’s moderator, reminded attendees about the upcoming Cosmetic Awards, in their second edition, this year inspired bya the theme of “innovation in communication”. The jury is made up of well-known experts: sociologist Francesco Morace, journalist Luca De Biase, Massimo Dona, secretary of the National Consumers’ Union, Giovanna Maggioni, director general of UPA-Utenti Pubblicità Associati and beauty blogger Roberta Scagnolari. The winners will be announced and presented with the awards next 29 September, during an evening at the Biodiversity Park/Theater of the Earth at Expo 2015.