The cosmetics industry, as a representative optional consumer goods sector, is inevitably experiencing delayed consumption due to the impact of the COVID-19 pandemic. However, we believe the pandemic is a short-term influence. After it ends, factors like the increasing proportion of young consumers, the continuous high growth and penetration of e-commerce, the upgrade of high-end brand consumption, the rise of color cosmetics/high-performance skincare products, and the boom of short video live streaming/online influencer marketing will continue to drive the rapid growth of the cosmetics industry in the medium term. Moreover, influenced by the lipstick effect and the rebound of social positivity after the pandemic, the cosmetics industry is expected to experience a quick and substantial rebound.
Offline cosmetics stores and single-brand stores are the most directly affected, while international luxury brands relying heavily on department stores are dragged down. Although e-commerce platforms have been impacted by insufficient logistics and distribution capacity and delayed return to work, as well as the cancellation of various promotional festivals on Tmall, the growth rate of cosmetics e-commerce in January slowed down significantly. However, as long as the pandemic continues to affect normal going out, part of offline consumption will continue to be passively transferred online, further increasing the penetration rate of cosmetics e-commerce, such as some middle-aged and elderly groups and lower-tier market segments. At the same time, during the pandemic, the downloads, usage duration and other metrics of short video and live streaming apps have increased significantly, expanding and deepening their user base. This provides an important opportunity for educating and growth short video advertising and live streaming marketing. As one of the core categories for short video and live streaming e-commerce sales, cosmetics will benefit from the new digital marketing traffic driven by the pandemic. Consumers watching more live streaming marketing at home during the pandemic have effectively enhanced the potential for recovery consumption after the pandemic. The pandemic is expected to catalyze the industry to further shift online and digitalize.
Post time: Jul-08-2023