Home > Focus On
ITALY’S BEAUTY SECTOR IS WORTH 9 BILLION EUROS
The Italian beauty industry is a market exceeding 9 billion Euros in turnover and is proving able to absorb the impact of the consumer spending crisis – caused by fears of global recession – by shifting its target audience to a band of consumers more inclined to spend money on personal care products. Hence, in 2007, in spite of a weakening in demand, the Italian cosmetics market – as noted by the Unipro Research Centre, the Italian association of cosmetics businesses – registered a steady growth (+2.5%) with demand valued at 8,995 million Euros. Promising also is the foreign market quota which, at 2,280 million Euros, accounts for about a quarter of total revenue. Exports last year were essentially stable (in absolute values, progress was at 1%) due to unfavourable monetary dynamics, with the Euro’s record over the dollar during the second half of 2007. The trade account balance was 763.9 million Euros.
The sector comprises several large businesses, branches of large foreign groups present and active in Italy for many decades, accompanied by countless medium, small and tiny businesses acting as third party companies or working in markets well defined geographically speaking and in specialized production niches. Several of the most dynamic groups, however, stand out above the rest, able to boast exceptional annual turnover spanning several dozen and several hundreds of millions of Euros.
According to the Unipro Research Centre, 2007 saw two trends promising to support the Italian cosmetics sectors even in the middle term: consolidation of products as daily consumption goods (for personal hygiene and personal care) in spite of strong conditioning of the propensity for consumption and constant general polarizing of consumption, indicating a shift towards niche products and solutions featuring high quality-price ratios. Pharmaceuticals proved to be the most lively distribution channel last year: the value of this market grew by 8.5% for a total of 1,337 million Euros - that is, 15% of the total. Less brilliant was broadscale organized distribution, cosmetics’ main sales channel: average growth was limited to 1.1%, at 3,900 million (44% of the total). In the professional channels, sales at beauty centres and beauticians were the most dynamic (+2.1%), compared to hairstyling salons (+1%): together, the two segments account for 970 million Euros in revenue.
With regard to foreign markets, the first five countries of destination for Italian sales in 2007 (up-to-date statistics in October) absorbed 40% of exports. In general, Europe accounts for 45% of total exports. The United States, the fourth outlet market after France, Germany and the United Kingdom, is the number one non-European market. Prospects look interesting as well, because although cosmetics exports have been increasing over the past few years, their export-production ratio is not so very high (at 25.3% in 2007). As this ratio stands at around 50 and 70% in other consolidated sectors in Italy able to boast decades of experience with foreign markets, there is hope for at least doubling current levels.