Market Recovery for Prestige Beauty Products
VKE Cosmetics Association Cautiously Optimistic For 2021 After Pandemic Impact
The member companies of the German VKE cosmetics association achieved a total of 1.941 billion euros in sales in the financial year 2020. This amounts to 9 per cent less that prestige cosmetics have to record compared to the previous year. The main reason behind the fall was cautious buying by trading partners as a result of shop closures during the second lockdown, according to the association. A considerable increase in online sales was not enough to compensate for the slump in retail revenue at Easter and Christmas.
Winners and Losers of the Pandemic
VKE figures reveal that the personal care segment achieved the most positive results. Member companies in this sector suffered a decline in sales of just 4.4 per cent. The main contributing factor was consumers looking to treat themselves and finding the time to do so due to working from home. Many consumers also needed more skincare products as a result of having to wear a mask, the association adds.
Revenues in the body care segment decreased by 9 per cent, in line with the market trend. This segment has traditionally been under pressure from retail and pharmacy consumer and private label brands, which in 2020 benefited from stock-piling and retail stores remaining open most of the time. VKE found that beauty products suffered the most during the pandemic due to lockdown, masks and consumers working from home. Fragrances initially recovered in the summer of 2020 before restrictions at Christmas resulted in an overall decline in sales of 4.9 per cent.
Booming Forgery Market
VKE believes that the increase in forged beauty products is also a symptom of the pandemic. According to the association, there were nearly four times as many beauty products confiscated in 2020 compared to 2019, worth a total market value of almost 13 million euros. Increasing numbers of forged beauty products found their way into Germany by post, courtesy of the surge in online sales driven by the pandemic, they continue.
Members of the association remain cautiously optimistic about the current financial year. Based on early indications of increased consumer confidence, VKE president Markus Grefer predicts a recovery in sales with an estimated sales drop of 2 to 5 per cent in 2021.