Impact of COVID-19 on the Cosmetic and Personal Care Sectors: Trade Data & Analysis

Companies engaged in manufacturing, producing, and retailing cosmetic products fall under the Cosmetics & personal care industry. This industry consists of stores that mainly retail personal grooming products, cosmetics, perfumes, and toiletries. The COVID-19 pandemic has changed the course of the world. It has affected everyone, no matter where you are or what sector you work in. The beauty and makeup industry is no exception to it either. The import and export aspects of this industry have been severely hindered by COVID-19.

Cosmetic and Personal Care Sectors- Prior Covid-19 Crisis

Before COVID 19, the cosmetic and personal care sectors were booming on account of rising disposable income, change in lifestyle of consumers coupled with rising concern regarding appearance. Furthermore, to promote the products or to attract a consumer base the companies are using social media platforms, such as youtube and Instagram. Also, the companies are showcasing their products on different platforms with the support of social media influencers. Before the COVID-19 crisis, in-store shopping accounted for up to 85 percent of beauty product purchases in foremost beauty industry markets.

Source- Statista

Dramatic Shifts in Cosmetics and Personal Care Industry –Suppliers, Production, and Consumers

Distribution was and will continue to be severely disrupted by the COVID 19 crisis. Luxury brands whose primary sales channels are selective distribution and travel retail were especially affected.

Production was brutally disrupted due to a lack of supply of raw materials as well as the differences in consumption forced by shutdowns. The restriction in production and movements compel the manufacturers to interrupt factory operations provisionally.

Some brands managed to switch their production to manufacture hand sanitizers and cleaning agents and providing free beauty services for frontline response workers.

Source: Statista

Digitization continues to rise

Covid-19 has driven digital transformation at an unprecedented rate in all industries. Beauty brands rushed to engage customers online as lockdown measures shuttered stores around the world, and retailers expanded their omnichannel strategies at a rapid pace and scale. The digitization of the cosmetics and personal care industry is not a new development – indeed, in the consumer goods industry, beauty is leading on digital. Nonetheless, the pandemic has accelerated the macrotrend, pushing companies to find digital solutions for almost every aspect of beauty, including customer engagement, marketing, product development, and research

For Instance- Skincare companies like Kiehl's are looking to deliver virtual consultations to help consumers find the best items for them. Pfeffer Sal, a skin care clinic based in London, providing customers an online skin MOT’ with a digital therapist. In addition, brands are seeking to raise customer confidence by using touch-free formats in their packaging

What would be the long-term impacts?

The pandemic may have a long-term effect on the Cosmetic and Personal Care Sectors. The industry is experiencing significant shifts in buying patterns, consumer needs, and channel activity. According to Fatpos global, the COVID-19 pandemic would undoubtedly have a significant effect on the global cosmetic and personal care industry, still, there are opportunities to be taken advantage of. It's an opportunity to demonstrate the industry's creativity by rapidly responding to emerging demands and trends. With the popularity of Asian beauty trends, the growth of e-commerce for cosmetics products is expected to continue. The industry is predicted to remain in profit in the long run since beauty is still considered an essential part of people’s wellbeing.