Beauty products, crisis proof?

Beauty is a profitable business, even in times of crisis. People's spending on makeup and related personal care products rises in less than favorable economic conditions, as consumers seek material comfort in small details.

In the last year, sales of these categories grew 5.4 percent, according to figures from the National Chamber of the Cosmetic Products Industry (Canipec).

Given the uncertainty that is being experienced at this time due to an upcoming recession in the United States, its trade dispute with China, and the weak growth in Mexico, it is estimated that sales will be better at the end of this year.

Crisis-proofing beauty ties in with the lipstick effect, a term coined by Leonard Lauder, chairman of Estée Lauder, in early 2001 when he observed a phenomenon occurring in reverse of economic health.

Sales of the product soared by as much as 200 percent, however it peaked in the global crisis that began in 2008. Figures from Euromonitor International show that a year later, sales of the lipstick in the United States fell almost 7 percent and only consumers in the UK maintained their spending during 2009.

Valeria Durán, a business and lifestyle specialist, explains that people buy this type of product because it offers them a sense of psychological and emotional well-being.

Although sales of this merchandise did not withstand the last financial crisis, the effect of affordable luxury is still present, although it is manifested in other products, such as nail polish, whose sales in the last decade have grown more than 120 percent. , according to estimates by the WEDC agency.

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Collateral damage to beauty

The cosmetics and beauty products industry in Mexico has an estimated value of 10.5 billion dollars, ranking second in Latin America and 11th in the world, according to Euromonitor International.

The sector is forecast to grow at an annual growth rate of 7.7 percent to more than $14 billion by the end of 2020.

The companies affiliated with Canipec represent approximately 85 percent of the formal national market, generating approximately 40,000 direct jobs and 150,000 indirect jobs.

The premium beauty market has also seen growth; in 2017, it posted a 15 percent increase, with the skincare category growing 6 percent.

Affordable luxury still works, yet the world is in the middle of a dispute between the two most powerful economies: the US and China.

For this reason, Valeria Durán considers that the greatest challenge that companies face is to avoid an increase in their prices and that this has an impact on consumers.

"Companies must shield themselves to prevent this from affecting their sales, because, although people buy, as soon as they see that their ticket has increased, they are likely to look for other alternatives."

You can also read: Lingerie: the silent revolution of women