Report underlines global divide for prestige beauty in 2008

Markets such as China and Mexico demonstrated continued break-neck growth, in stark contrast to significant falls in the value of the prestige beauty market in Europe and the US, the NPD Group said in a presentation given at the Rainbow Room in New York City, today.

Prestige Beauty Industry Growth by Country 2008 vs 2007​

US -3.3 percent

China 17.2 percent

Mexico 9.2 percent

Italy -0.5 percent

France -0.2 percent

The figures directly mirror the effects of the global economic slowdown, which first struck in the United States, as the financial disaster relating to the sub-prime mortgages unraveled, putting the skids on credit availability, and ultimately curbing consumer spend.

Although the prestige beauty category has enjoyed unprecedented growth in the last five years, it is probably the category that is most susceptible to economic fluctuations as it is highly dependent on consumer spending power.

US fragrance market still holds potential​

Looking at the specific prestige categories, the NPD presentation highlighted that there are still opportunities, underlining the US fragrance market as being a particularly significant area to watch.

“Conversely, fragrance may hold the greatest opportunity for growth,”​ said Karen Grant, senior global industry analyst and NPD.”

To tap into this potential Grant suggested that the fragrance industry should be looking for new ways to engage users, especially considering the fact that consumers are becoming increasingly indepedent in the way they choose their fragrances.

Anti-aging still a winner​

Likewise, although global skin care sales remained flat in 2008, the anti-aging category has continued its unprecedented stint of growth, as consumers' desire to turn back the hands of time remains unabated.

The make-up category struggled in almost all areas, NPD revealed in the presentation, putting into question the much banded about ‘lipstick’ theory, which hypothesizes that sales in this category often remain relatively healthy as women resort to inexpensive treats to cheer themselves in the midst of all the gloom.

This underlines the fact that during tougher economic times, women will tend to go for less expensive brands, if they want to achieve the desired boost.