Premium Beauty and Personal Care in the Philippines

2020 IMPACT

Declines for premium beauty and personal care due to home seclusion and closure of main distribution channels

Despite the fact that affluent consumers who tend to purchase premium beauty and personal care were less likely to have been impacted financially by the pandemic, the category recorded notable declining value sales in 2020. This was mainly as a result of declining demand for products deemed to be non-essential whilst consumers were confined to their homes during lockdown, and unable to socialise or travel; therefore, the most significant declines were recorded by premium colour cosmetics, fragrances, and sun care, although these categories also managed to gain share from the mass segment during the year.

Premium skin care shows some resilience due to self-care and closure of beauty salons

Premium skin care was also more resilient than some areas of the category with only marginal declines or stable demand for many products including general purpose body care, firming/anti-cellulite body care, face masks, liquid/cream/gel/bar cleansers, toners and hand care as affluent consumers looked to maintain personal grooming routines whilst confined to their homes, particularly as beauty salons were closed and they were unable to indulge in treatments.

Premium beauty and personal care is increasingly competitive and fragmented landscape

Premium beauty and personal care became an increasingly competitive and fragmented landscape in 2020, where smaller niche brands under “others” gained value share. Nevertheless, Estée Lauder Cos Inc, the only player to hold double-digit value share overall, managed to strengthen its leadership due to its strength in premium skin care through its brands Clinique and Estée Lauder which both recorded positive value growth in 2020.

RECOVERY AND OPPORTUNITIES

Full value sales recovery predicted, but weaker performing categories during the pandemic will take longer to return to pre-pandemic levels

Normalisation is predicted in terms of purchasing behaviour from 2021 for premium beauty and personal care categories which did not fare as well in 2020 during the pandemic, including premium colour cosmetics and premium fragrances, as consumers return to the workplace and socialising outside of the home environment. However, this will be highly dependent on the relaxing of restrictions and the threat of the virus, particularly as ongoing social distancing measures may be discouraging for some consumers who prefer to visit upmarket department stores prior to making a purchasing decision due to the experiential appeal of these stores.

Significant discounts on premium fragrances in 2020 will mean value sales take longer to recover

The pandemic and subsequent lockdown had a profound negative impact on demand for premium fragrances due to the home seclusion trend, with online retailers increasingly offering 30-50% discounts on premium fragrances for both men and women, which resulted in significant drops in their average unit price, and more drastic declines in value sales compared to volume. This will mean that overall premium fragrances will take marginally longer to recover to pre-pandemic value sales levels (at constant 2020 prices) compared to overall premium beauty and personal care.

E-commerce has potential to further penetrate colour cosmetics

E-commerce is likely to play an increasingly important role in the distribution of premium colour cosmetics over the forecast period, with the category set to make a full recovery in value sales terms (at constant 2020 prices) by 2024, although lingering price sensitivity will see some loss of share to the mass segment. Nevertheless, many consumers of premium colour cosmetics brands are loyal and tend to be familiar with the quality offered and may therefore move online to choose from an expanding range of products and prices.