Premium Beauty and Personal Care in South Africa

PROSPECTS

Consumer expenditure on premium brands declines due to cost-saving initiatives

A decline in disposable incomes due to the rising cost of living has led to consumers reducing their spending on discretionary items that are perceived as luxuries. Despite the tough economic climate, demand for premium beauty and personal care continued to experience positive growth.

Dwindling brand loyalty among premium brands

During the recession, when consumers had to re-evaluate their priorities, price-sensitive consumers were less brand royal. With regular price promotions across multiple brands, consumers were more open to trying new brands.

Macroeconomic constraints pose a threat to future growth

Modest economic growth over the forecast period will be the primary reason for subdued growth in premium beauty and personal care. However, some categories such as women’s fragrances are poised to record strong growth over the forecast period.

COMPETITIVE LANDSCAPE

Estée Lauder maintains lead

Estée Lauder offers a diverse product portfolio sold through extensive nationwide distribution. Considerable marketing efforts are being made for its e-commerce business to drive sales through internet retailing.

Counterfeit products widespread

Target consumers of premium brands are digitally connected and have a strong brand awareness with regards to brands available internationally. Smaller niche brands such as Kylie Jenner and Huda Beauty, which are very popular internationally, are not available locally.

Omni-channel presence trend to persist

South Africa has a strong shopping centre culture and for beauty and personal care, consumers want to try the product for themselves before making a purchase. The only exception is a repeat purchase as consumers know what they are buying and no trial is required.

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