Premium Beauty and Personal Care in the Philippines

PRE-COVID-19 PERFORMANCE

Healthy growth for premium segment, but dominant mass products offer competition due to increasing development of advanced formulations combined with affordability

Increasing disposable incomes and the rise in the number of mid-income households in the Philippines continued to support healthy current value growth for premium beauty and personal care in 2019, as a growing number of local consumers showed a willingness to invest non-essentials, in addition to trading up to higher quality premium options. However, Filipino consumers still expect to receive value for money, and the premium category started to experience a slowdown in its growth rate in current value terms at the end of the review period, in line with increasing value growth recorded by mass segments, particularly within skin care as players continued to add value to their products through the use of more advanced formulations or natural ingredients; therefore, some consumers perceive mass skin care for instance, to offer affordable alternatives to premium products.

Affluent local parents continue to invest in children, resulting in highest growth for premium baby and child-specific products in 2019

With a gradually falling birth rate in the Philippines, local parents are increasingly investing in their children’s health and wellbeing, encouraged by rising disposable incomes. Consumers are also becoming more aware of baby and child-specific products and the benefits they provide, such as being kinder on a baby’s sensitive skin.

Estée Lauder strengthens leadership of highly fragmented competitive landscape in 2019

Premium beauty and personal care remained a highly fragmented competitive landscape in 2019, led by multinationals Estée Lauder (the only player to hold double-digit value share), and L'Oréal, both of which gained further ground, followed by direct seller Nu Skin Enterprises Philippines Inc.

2020 AND BEYOND

COVID-19 impact

Value sales of premium beauty and personal care are expected to grow by 1% in 2020 at constant 2019 prices in light of the impact of COVID-19.

Affected products within premium beauty and personal care

Like the mass segment, the home seclusion trend linked to strict lockdown measures as a response to COVID-19 in the Philippines is set to have a negative impact on several categories in 2020, with subdued demand felt most strongly by premium colour cosmetics, and premium sun protection. With consumers unable to leave their home environments for long periods of time, these products are deemed non-essential by many.

Recovery and opportunities

Normalisation is predicted in terms of purchasing behaviour from 2021 for 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.

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