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“Doubt everything you know,” attendees were told during a Society of Cosmetic Chemists (SCC) meeting in November 2009. And although the comment was made in reference to the skeptical nature essential to science, those words can also apply to economics. Take the hard knocks of the past year or so, for example, which rather unexpectedly uprooted many and left the rest unsure of whether they are standing on solid ground or thin ice. In this climate of constant flux, it has been difficult to forecast financial expectations beyond one year.
Yet despite chewed fingernails, the growth (or loss) of gray hairs, and the deepening of expression wrinkles, the industry remains hopeful. Why? For one, consumers are still buying beauty products—in some cases to combat these effects from a stressful economy. In fact, Euromonitor International has projected product sales in the global cosmetics and personal care market to increase approximately 9% by 2013, totaling almost $364 billion (see Euromonitor’s “State of the Industry: Bright Spots Remain in Down Market” at www.GCImagazine.com or the June 2009 print issue).
While these projections remain uncertain, major multinational brand owners do see a glimmer of hope on the horizon. For example, L’Oréal reported third quarter improvements in 2009 in its professional products and active cosmetics divisions, not to mention strong progress in its consumer products division.
In October 2009, P&G reported that, although overall numbers were down (with the exception of hair care), net sales for the July–September quarter exceeded expectations. Shiseido noted that while sales in Europe and the U.S. were down between 5–10%, sales in China and other Asian countries have been growing at a steady rate, specifically in over-the-counter (OTC) sales. And Natura recorded an impressive 43.9% increase from the third quarter of 2008 to 2009 in terms of net revenue from international operations.*