Premium Beauty and Personal Care in Israel

PROSPECTS

Change in pricing policy affects growth

Premium beauty and personal care was strongly affected by the change in pricing policy applied by leading health and beauty specialist retailer Super-Pharm, as well as by other beauty specialist retailers. This was implemented at the beginning of 2017; instead of offering high prices and deep discounts or buy-one-get-one-free deals, retailers began pricing products lower but on a regular basis, aiming to make pricing more transparent for consumers.

Effect on growth to continue

Pricing policy will also have an impact on future growth, as it will take time for manufacturers to adjust to the new prices and the decrease in sales. Therefore, growth at constant 2017 prices is set to be lower during the forecast period than was registered over the review period given the lack of no buy-one-get-one-free deals or significant discounts, which previously drove consumers to purchase a greater number of products.

Declining prices expand the target audience

Prices in all segments, including premium, declined towards the end of the review period and premium products were gradually becoming affordable for a larger consumer audience. The decline in prices was driven by retailers, as mentioned above, but also by growing internet retailing.

COMPETITIVE LANDSCAPE

Lilit Cosmetics leads premium beauty and personal care

Lilit Cosmetics continued leading premium beauty and personal care in 2017, mostly thanks to its dominance of premium fragrances, which make up the majority value share. Lilit Cosmetics has a product portfolio that is wider than any of its competitors and its products are available in all leading beauty and personal care chains, including Super-Pharm, April, New Pharm and Hamashbir.

Mono-brand stores and internet retailing drive growth

Premium beauty and personal care is largely driven by the opening and expansion of mono-brand stores and pop-up stores. Several brands, such as Dior, Estée Lauder, Smashbox and Bobbi Brown, have opened mono-brand stores, which offer consumers a rich experience of colour cosmetics and skin care products and are often the centre of special campaigns, such as visits from international brands’ senior make-up artists and various workshops.

Online sales drive further growth

Another significant channel driving growth of premium products is internet retailing. Brands can target consumers more efficiently through social media, thus achieving more exposure to their target audience and leading them to their online store.

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