Premium Beauty and Personal Care in Argentina

PRE-COVID-19 PERFORMANCE

Economic crisis undermines demand in key fragrances category

The devaluation of the Argentine peso in 2019 led to a significant increase in prices in premium beauty and personal care, with many products in the segment being imported. Consequently, many mid-to-high-income consumers replaced premium products with less expensive alternatives, primarily opting for mass rather than premium brands.

Distribution an issue

Industry sources state that distribution problems represented a significant obstacle to the development of premium beauty and personal care in the Argentinean market in 2019. While some drugstores/parapharmacies offer premium brands, the low number of specialist retailers such as Kiehl’s meant that consumers had limited access to premium products.

L’Oréal Argentina maintains lead

L’Oréal Argentina remained the clear leader in premium beauty and personal care in 2019 even though it experienced a marked fall in its value share during the year. L’Oréal Argentina’s portfolio includes brands such as La Roche Posay, Vichy and Ô de Lancôme, which are focused mainly on mature women, as well as other brands, such as Kiehl’s and Biotherm, that focus more on millennial consumers.

2020 AND BEYOND

COVID-19 impact

Sales of premium beauty and personal care are expected to fall by 3% in 2020 in 2019 constant value terms in light of COVID-19. This is a significantly poorer performance than that registered over the 2014-2019 review period, when the category grew with a 1% CAGR at constant 2019 prices.

Affected products within premium beauty and personal care

The combination of reduced consumer purchasing power, the closure of workplaces and the lack of opportunities for socialising as a result of COVID-19 is set to significantly undermine demand across several premium beauty and personal care categories in 2020. Categories such as premium powder, premium lip gloss, premium eye shadow and premium nail polish are expected to see particularly marked declines during the year in 2019 constant value terms.

Recovery and opportunities

Premium beauty and personal care is expected to record a positive CAGR at constant 2019 prices over the forecast period, with the overall category returning to growth in 2021. While many categories will take slightly longer to see an upturn in sales, all are expected to register positive year-on-year growth in 2019 constant value terms by 2022.

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