Product and Service
Companies included in cosmetic& perfumes sector in personal care industry primarily are manufacturers, marketers, and distributors of fragrance, color cosmetics, skin& body car, and hair Solon.
Demand for Product and Service
As indicated by typical sales data, the demand from retailers for cosmetic and fragrance products seems to being declining in the past several years as mall/stores’ traffic slowed down. However, the demand will be gaining support from fundamental factors.
Sector’s Current, Trend, Causes behind trend, and Future
Current and Trend
Generally, the demand from retailors for cosmetic and fragrance products has been weak and presented downward trend in the past three years as indicated by the typical company’s data of sales.
Weak demand has resulted in intensive competition among different brands and companies thus have to turn to lower price to keep sale volumes. Increased consolidation activities may be also a result of increased competition and decreased margin of companies in this sector.
Unfavourable retail industry climate, as it does on other consumer manufacturer, has had less impact on higher price products and had less impact on European and Asian market than on US market.
Companies pursue growth from e-commerce to offset the pressure from slowing down store traffics.
Causes behind the trend
Demand for products in this sector should be able to gain support due to general economic development, favourable demographic changes, growth in household income, and change in consumers’ lifestyle.
Slowing down store/mall traffic significantly has influenced sales of companies in this sector that traditionally depend on retailers as major distribution channels.
Traditional distribution mode is facing challenge and those companies that are more flexible in adjusting their product to deal with new shopping habit of consumers or companies that provide high end products may feel more comfortable in the current market.