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Beauty, personal luxury ad spend in India to grow 15.2% over 2019: Zenith

Zenith forecasts average growth of 5.9 per cent a year in digital advertising.

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NEW DELHI: Decreased consumer demand for cosmetics and fragrances amid continued social distancing will restrain the recovery in beauty and personal luxury advertising to 1.7 per cent in 2021, according to Zenith’s Business Intelligence – Beauty and Personal Luxury report. However, India, after France, will lead the beauty and luxury adex growth.

“Beauty ad spend was stable in India in 2020 and is forecast to grow at an average of 7.6 per cent a year as more consumers take up the habit of regularly buying beauty products. Beauty and personal luxury ad spend in India are forecast to be 15.2 per cent higher in 2022 than it was in 2019,” the report highlights. 

Zenith projects France to be the best-performing beauty ad market over the next two years, growing by 13.3 per cent a year on average. 

Overall, Zenith estimates that in 2020 beauty brands spent 18.3 per cent of their budgets on magazine advertising, 4.3X more than the average brand. It was 42.2 per cent on television, 1.6X more than average. But these media are becoming less effective as their reach continues to decline and the scarcity of their audiences pushes up prices.

Beauty and personal luxury brands have been relatively slow to adopt digital advertising, spending 34.1 per cent of their budgets digitally in 2020, compared to 53.1 per cent for the market as a whole. This is a result of the historic lack of premium digital environments that support the high-quality brand imagery that beauty and personal luxury brands need to convey. It is also due to the difficulty the beauty industry has had adapting to e-commerce because consumers feel the need to sample and try on beauty products in person before committing to a specific product. 

“According to Euromonitor International, 11.8 per cent of beauty and personal luxury sales were through e-commerce in 2019, compared to 13.2 per cent for the market as a whole,” the report mentions. 

However, technologies like video-on-demand and connected TV, and social platforms like Instagram and TikTok, are creating new premium environments that showcase beauty and personal luxury brands effectively. Brands have also greatly stepped up investment in their e-commerce offerings since the start of the pandemic as a matter of necessity, as brick-and-mortar retail sales shrank. Digital channels are therefore becoming more valuable for both brand and performance advertising.

Zenith estimates that the beauty category increased its spending on digital advertising 2.8 per cent in 2020, despite the pandemic. This was twice the 1.4 per cent growth rate of digital advertising across all categories, as beauty and personal luxury brands began to compensate for the previous underinvestment. It forecasts average growth of 5.9 per cent a year in digital advertising between 2019 and 2022. Beauty and personal luxury ad spend on all other media will decline over this period, by between 1.2 per cent a year for TV and 12.4 per cent a year for magazines.

“Beauty brands were forced to accelerate their e-commerce strategies in 2020, some pioneering the use of virtual and augmented reality to allow consumers to try on and model products online,” says Zenith global marketing director Christian Lee. “Continued innovation in e-commerce technology to improve the consumer experience will be key to unlocking brand growth for 2021 and beyond.”

Zenith head of forecasting Jonathan Barnard states that so long as consumers remain cautious about travelling in public and meeting in person, growth in the beauty and personal luxury advertising segment will lag behind the market. “But by investing in digital technology that embeds e-commerce into the heart of their operations, brands will prime themselves for more rapid growth when demand picks up,” he adds.

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