Despite consumers tightening their belts, Botani and other Aussie cosmetic brands have been enjoying good values and growth, as the $6.5 billion market is still growing after a decade of uninterrupted growth.
L’Oreal Australia’s Managing Director Rodrigo Pizarro says that its more than just the lipstick effect; the small indulgences that people spend on when money’s tight, he says that he’s seen a lot of countries where women, in spite of the economic conditions, spend money on beauty products to look good, maybe for a job interview, a date, or just for their own self esteem.
Australia is no exception; in spite of the country’s love for the outdoors, as well as the free and easy lifestyle, Aussie women spend more on skin care and cosmetics, particularly foundation, than those in other developed markets. According to a recent report from Euromonitor, the AU ranked into the top 5 markets in the world for cosmetics, good news for brands like Botani and L’Oreal.
Skin care sales in the AU, for example, have been consistently growing at 7-8% annually for the past few years, fuelled by a 25-30% increase in active or dermo-cosmetics and natural brands.
Pizarro says that the skin care market is booming, with new products and names like Chemist Warehouse and Sephora entering the AU market, helped with their brand agnostic, hands-on, consumer-driven approach, which are offsetting the softer growth seen in traditional channels.
He also notes that, in order to retain its 16% market leadership, L’Oreal needs to understand how consumers behave, and think in order to adapt to their needs and wants through new products, like any other business. Like the others, he says they need data; with everything going on, they believe that looking in and out in order to see what’s new is a must.
Pizzaro states that that’s why the cosmetic industry in the AU is looking for as much data as they can in order to make sure they stay on the ball with the changes in the industry. He also believes that e-commerce will account for around a third of the market’s growth over the next few years as retailers improve their online services and offerings in order to keep up with pure-play retailers.