Impact of global financial crisis on Singapore’s beauty and cosmetics industry.

Aastha Gupta

Product Marketing and Management

April 09

Ayaz Furniturewalla, general manager of Elizabeth Arden’s distributor market and travel retail in Singapore says that “Beauty is recession-proof. Even when the economy isn’t doing well, people still need a little distraction to feel good about them.”

For majority of the Singaporeans, beauty is a ‘must-have’ rather than a luxury.

Irrespective of the slowing economy and the growing financial crisis, the beauty products and the cosmetics industry in Singapore remains upbeat. Above all, this industry is expected to maintain the current pace of growth next year also. A small survey conducted by a marketing research company also showed that despite the job losses and the deep economic recession that the country has faced till date, seven out of ten Singaporeans will continue to spend on beauty products and services. Those who wanted to cut their spending on beauty products like cosmetics said that they would just switch from designer labels to house brands.

In the recessions of 1990 and 2001, the demand for cosmetics increased when the consumer confidence was low. The same trend is being observed in the current economic crisis. This fits in perfectly with what the economists call the ‘Lipstick effect’. The Lipstick effect states that the sales of beauty products and cosmetics go up in times of economic adversity. The sale of lipsticks has seen a steady rise during the recession time. Products like Lipsticks are an affordable indulgence, as compared to a new dress or an expensive skin treatment, especially during the times when an average purchaser wants to spend less on luxuries.

Recession has definitely affected the up market and expensive range of cosmetic and beauty products, because it is not possible for the consumers to spend extravagantly on them during recession times. The term ‘recession chic’ has been coined by several blogs and articles in Singaporean magazines and newspapers which are filled with tips on how to maintain good looks at low cost during the times of recession. US marketers are launching new products targeting stylish, budget-conscious women customers who want to look chic.

To conclude, this quote clearly indicates why the beast known as recession has failed to affect the beauty products and the cosmetic industry:

“Through war, plague and recession, human vanity endures”.