Italy's cosmetics manufacturing industry continued to grow steadily

In 2018, the total sales of Italian cosmetics industry approached 11.4 billion euros, up 2.1% year-on-year. The sales of overseas markets increased 3.8% year-on-year, accounting for 42% of total sales, and the trade surplus exceeded 2.7 billion euros. At the Cosmetica Italia (Italian Cosmetics Industry Association) conference in 2019, Ermeneia, a consultancy firm, released its annual cosmetic report for 2018.

Fast-growing cosmetics industry

The data of the report show that the total sales of Italian cosmetics industry in 2018 are close to 11.4 billion euros, up 2.1% year-on-year, of which the sales of overseas markets are up 3.8% year-on-year, accounting for 42% of total sales, and the trade surplus is over 2.7 billion euros. The cosmetics industry is also a very young industry: 38% of companies have been established for less than 10 years, and the overall debt level and profitability level are better than the overall level of the Italian manufacturing industry. Apart from the drop of 2.6% in 2009, the Italian cosmetics industry maintained an annual growth from 2007 to 2018. In the first half of 2019, Italian cosmetics sales are expected to increase by 2.6% and exports by 3.6%. Italian cosmetics industry has a total of 1 300 enterprises and more than 35,000 employees, including downstream supply chain personnel, the total number of employees involved is more than 200,000.

Intesa Sanpaolo Bank's data also show that the average growth rate of Italian cosmetics industry is 10% between 2016 and 2017, second only to pharmaceuticals (+10.8%) and leather (+10.1%), ranking third in all industries; the average pre-interest and tax profit rate is 8.8%, second only to pharmaceuticals (9.6%) and higher than spectacles (7.7%). And leather industry (5.4%). Matteo Moretti, president of the Polo della Cosmesi Association, commented: "This report demonstrates the value of the cosmetics industry, and these data are very eye-catching. If there is any shortcoming, it is that there is still a lack of official certification of the Italian cosmetics industry. Certification from the government can promote more effective scale growth of enterprises and the whole cluster, enhance competitiveness in the international market, and also better attract overseas investment. "Because they have to continuously and actively invest, so the response of beauty enterprises to the market is very fast." Nadio Delai, Ermeneia's president, emphasized that "they have established close ties with consumers at the cultural, behavioral and emotional levels, which has become the basis of their competitiveness."

"We are proud to be a model of the glorious history of Italian manufacturing industry," commented Renato Ancorotti, chairman of Cosmetica Italia. "This industry has matured and represents one of the high-level industries of Italian manufacturing industry."  Cosmetics industry's investment and dependence on traditional sales channels are decreasing. 39% of enterprises use external wholesalers or distributors'sales channels, and 14.3% are transforming to fully use their own sales channels. Overall, 81% of enterprises have begun to use their own sales channels partly or completely. Edoardo Bernardi, CEO and General Manager of Estee Lauder Italian Branch, said: "Our industry is far ahead in de-intermediation. Today, thanks to digital platforms, we can build a direct dialogue network with the wider consumer community through social media. Benedetto Lavino, chief executive and general manager of Bottega Verde, an Italian cosmetics brand, added: "When a consumer finishes a purchase at a sales point, we can send text messages immediately to get feedback on their satisfaction." At the same time, the usage mode of business channel in cosmetics industry is also changing, and it is more inclined to combine other sales channels. Delai said: "More than 74% of respondents said they would use e-commerce channels in combination with other channels, whether in promoting sales or in enhancing brand awareness." In addition, 94% of the enterprises surveyed said that digitalization was essential to enhance the efficiency and competitiveness of the company. Nearly 60% of the enterprises said that they had made relevant plans or had taken measures to strengthen the digitalization progress of the enterprise. The report shows that the average business investment of cosmetics enterprises interviewed is 7% in R&D, while the average level of Italian manufacturing industry is only about 3.5%.