Super Premium Beauty and Personal Care in Turkey

2020 IMPACT

Store closures and reduced tourist spending hit sales as COVID-19 leads to a greater focus on preventative skin health

While registering declining sales in 2020, super premium beauty and personal care overall proved comparatively resilient in the face of the COVID-19 pandemic relative to other categories of luxury goods. Skin care, body care and hair care were the most resilient, with many luxury brands offering free online skin and beauty consultation owing to store closures.

Currency depreciation leads to price rises, encouraging discounting and more affordable offerings from retailers in 2020

Depreciation of the Turkish lira in 2020 led to an average rise of 20 to 25% in the prices of super premium beauty and personal care items. Faced with a reliance on domestic expenditure during the country’s lockdown, many brands and retailers sought to retain sales from domestic customers by running short online discount campaigns.

Store closures accelerate growth of e-commerce in 2020 as players expand their digital offerings

Paco was the leading brand within a highly fragmented super premium beauty and personal care landscape in 2019, with Chanel a very close second. Yöntem Kozmetik AS (GBO: Puig SL) was the leading national brand owner, holding brands such as Paco, Carolina Herrera, Prada and Jean Paul Gaultier.

RECOVERY AND OPPORTUNITIES

Muted recovery for super premium beauty and personal care over the forecast period

Super premium beauty and personal care is expected to see low negative retail value growth at constant 2020 prices until around 2022, with most categories set to experience marginal negative average growth over the forecast period. While super premium fragrances, as the key driver of sales in the category, is set to return to marginal average growth, sales of other super premium beauty and personal care is set to remain subdued.

Players set to focus on combating counterfeit goods and promoting sustainable credentials

Counterfeit products are expected to remain a challenge to sales of super premium beauty and personal care products over the forecast period, notably with regard to sales via the burgeoning e-commerce channel. Certain e-commerce sites that claim to sell original premium beauty products are actually selling counterfeit perfumes, adversely affecting both consumer confidence and players’ bottom lines.

Ongoing currency instability set to put pressure on pricing as technology takes centre stage in the post-pandemic landscape

Ongoing fluctuations in foreign exchange are likely to have an impact on the pricing strategies of super premium beauty and personal care players over the forecast period, with some manufacturers and retailers likely to refrain from fully passing on cost increases to consumers. At the same time, technology is likely to play an increasingly important role.