Premium Beauty and Personal Care in South Africa

PRE-COVID-19 PERFORMANCE

Economic downturn hampers growth, although many consumers remain brand-loyal

Although premium beauty and personal care continued to see current value growth in 2019, this was lower than in any other year of the review period. Continued economic downturn was seen at the end of the review period, with decreasing GDP growth, increasing inflation and rising utility bills, which negatively impacted consumers’ incomes and their ability to purchase premium brands.

Manufacturers adapt to consumers’ changing needs

Because of the challenging economic environment, many premium brands introduced shopping vouchers and increased seasonal discounts to encourage consumers to support their favourite brands. In order to drive volume sales, retailers also offered other attractive deals, such as free delivery, gift sets and free samples.

Estée Lauder maintains its lead with a diverse product and brand portfolio

Estée Lauder maintained its lead in premium beauty and personal care in value terms in 2019, as its brands are sold through a wide network of distributors in both physical stores and online, and it has a diverse product portfolio, covering categories such as fragrances, skin care and colour cosmetics. Strong brands such as MAC Cosmetics, Clinique, Bobbi Brown and Estée Lauder are part of the company’s diverse product portfolio.

2020 AND BEYOND

COVID-19 impact

Premium beauty and personal care is expected to decline by 1% in 2020 in 2019 constant value terms in light of the impact of COVID-19. This price platform was already struggling at the end of the review period due to the poor economic environment.

Affected products within premium beauty and personal care

Like mass beauty and personal care, within premium beauty and personal care the performances are expected to differ between categories in 2020. Due to falling disposable incomes, COVID-19 is expected to have a particularly negative impact on products which are not considered necessities, such as premium colour cosmetics and fragrances.

Recovery and opportunities

Although the direct impact of COVID-19 on sales of beauty and personal care products is expected to be limited in the forecast period, the economic impact is expected to be longer-lasting. The recovery of premium beauty and personal care will depend on how badly the economy and thus consumers’ incomes are affected by the restrictions during lockdown.

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