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Despite being called COVID19 - the coronavirus pandemic made its presence felt in 2020 beginning from the first quarter and not letting up throughout the year.
While the news predominantly reported overloaded hospitals and people unemployed due to the stringent measures enforced by most governments the world over - business and corporations were just as badly affected.
With everyone sitting at home attending classes and work meetings on Zoom and similar services, there was very little need for makeup. Consumer spending on makeup fell drastically during periods of imposed lockdown and the famous "lipstick index" (referring to how even during periods of economic downturn, cosmetics and makeup are seen as an affordable indulgence) fell flat on its face. Sales plunged for lipsticks and other makeup articles throughout most of 2020.
L'Oreal saw its sales dropping more than 11% during the first six months of the year and other industry titans such as Estee Lauder reported its net profit more than halved in the year to June. Even KBeauty giants Amorepacific (parent of brands like Innisfree, Laniege and Sulwhasoo) saw its consolidated revenue fall by 23% during the first 9 months of the year.
In fact, many cosmetics companies managed to reduce losses by shifting their emphasis to skin care products and items like sanitizers and face masks instead. Those brands that had skin care ranges to complement their makeup products mostly reported rising sales as people staying at home spent far less on makeup and much more on taking care of their skin, hair and body while at home.
In Pakistan, with the lockdown imposed most cosmetics brands had to shift focus to online sales. Fortunately, many super stores already had an online presence while ecommerce only stores have been around for the better part of a decade.
Logistics companies were initially unable to cope due to restrictions imposed on inter provincial transport and the sudden surge in demand but eventually the situation normalized and the industry has grown with new players emerging.
As retail outlets (or brick and mortar stores) closed, it was no longer possible to visit a shop and test out lipsticks, mascara or eyeshadows to see how well the shade would suit you. This was in part due to COVID protocol but has also exposed how normalized it was to use a product that a complete stranger had used before you. While Pakistan has not so far benefitted from digital solutions that some cosmetics companies began to offer that allow you to virtually test out lipsticks, eyeshadows, etc on your skin through AR (Augmented Reality) - there is hope that 2021 will allow such apps or services to be offered here as well.
The global pandemic has normalized remote working and with many of the larger employers in Pakistan (including banks, telcoms, etc) allowed either remote working entirely or on designated days. This may have long term implications and companies may choose to retain a remote working employee base even after the pandemic situation has been resolved.
What this means for the cosmetics industry is that after a year of not using makeup, consumers may be normalized to reduced spending on cosmetics and despite positive projections for 2021, there may be a permanent dent in revenues for cosmetics companies.
