2018: cosmetic sector nearing 11.5 billion

The economic survey presented in July by Cosmetica Italia estimates that the sector’s overall turnover grew by 4.5%, approaching 11.5 billion Euro.

Much of the credit goes to the outstanding performance of direct sales and contract manufacturing.
In this context, exports have played an important role, having grown by an estimated eight percentage points for a total of nearly 5 billion Euro. Projections like this have a significant impact on the balance of payments, which even in the face of rising imports is approaching 2,700 billion Euro, a new record for the sector.
As the president of Cosmetica Italia, Renato Ancorotti, remarked: «The cosmetic industry has responded with organized competitiveness, rooted in an effective and quality offer and internal and international scenarios that see profound changes underway in consumer demand and distribution. Cosmetic operators have also shown a propensity for investing in research and innovation - key elements which are welcomed by both traditional and new markets».

Snapshot of the sector. All channels are now in recovery - albeit with important differences – as evidenced in recent quarterly reports. Partly due to operators investing in the professional category, beauty centers and hair salons have grown by an estimated 2.5% and 1.8%, respectively.
Also strong, though moving at a slower pace, is the performance projected for the pharmacy channel (+1.5%). Consumption via department stores, on the other hand, which hold a 41% share of the Italian cosmetic market, is expected to rise by just one percentage point by the end of 2018. End of year projections for herbalists stand at +0.5%, confirming that channel’s resilience, albeit with weaker performance than in the past.
The performance of the perfume shop channel is uncertain, although operators have kept an open mind in their projections (+0.5%) for 2018.
Contract manufacturing, which provides a useful metric for gleaning the medium to long term performance of upstream channels, reports 10% growth by the end of 2018. Finally, direct sales continue to show the strongest performance among channels, with an estimated 12% growth expected in 2018, thanks to highly dynamic online sales, set against the slowdown of conventional direct sales (door-to-door and by mail).
«The study shows the concerns’ attention to the changing needs of the market, with strategies and operations increasingly oriented toward digital engagement and planning extended to the industry as a whole» remarks Gian Andrea Positano, head of the Cosmetica Italia research center, who also notes that «a look at the strategies going forward highlights the importance of themes relating to sustainability, green practices, personalization and specialization of the offer».