In a report entitled Online Perfume and Cosmetic Sales industry in Australia, recently published by IBISWorld, the authors point out that it is the increasing acceptance of online shopping, combined with the stronger economic landscape that is driving this growth.
“Perhaps the most significant development over the past five years has been the growth in the male customer base, which has been a large contributor to a whole range of new, male-targeted products,” said IBISWorld industry analyst Kosta Lev.
Growth in the segment has been erratic in recent years, hit by the economic downtown that slowed the country’s economy considerably in the period 2008 – 2009, and remained subdued in 2009 – 2010, the following year sure a sharp turnaround.
Internet penetration helps drive the growth
In the period 2010 – 2011 the IBISWorld research team recorded growth in the online market for fragrance and cosmetics of 9.8 per cent, bought about by two years of prudent consumer behavior that saw Australians become savers rather than spenders.
“Revenue growth has remained strong since then, driven by increasing health awareness, rapid internet penetration and the subsequent rise in online retailing,” said Lev.
In the five years up to 2013 – 2014, the researcher believes that annualised industry growth will be 7.5 per cent to reach an annual value of $99.3m, which include revenue growth of 10.1 percent for the actual year 2013 – 2014.
Australians warm to choice and convenience of online shopping
The report highlights that this continued recovery and strong growth has been bought about by the fact that Australian consumers are warming to the choice and convenience of shopping online, something that has helped along by increasing bandwidth and faster internet connections.
Likewise, the researchers at IBISWorld also point out that the trend towards a more holistic approach to lifestyle and wellbeing is also helping to drive demand for cosmetics and personal care that support these values, which particularly points to natural and organic products.
However, the online fragrance and cosmetics market still remains fragmented, with no one player carving out a significant share, indicating that there is still opportunities for new players and consolidation.
The report highlights that growth is expected to remain strong in the five years through to 2018 – 2019, although it is expected to be at a slower pace than the previous five year period.