Beauty & Personal Care
The beauty and cosmetics market faces various challenges in recent years as the competition is strengthening due to a number of reasons.
First, international online retailers are great competition for the local industry. Not only do they offer a wide variety of cosmetics and make-up brands (which are not all sold in the local market), but their pricing is also significantly lower than the local prices.
Second, the threat of competition from other countries is not only from online retailers but also from brick and mortar stores. Israelis travel abroad commonly, and departures are growing by fast rates every year. They are frequently exposed to price gaps, mainly in skincare, make-up and deodorants and therefore buy items when abroad; as the phenomenon is wide, it affects the local market. Some companies decrease prices for specific brands in order to attract customers and to discourage overseas shopping.
Third, as the cosmetics market is mature and saturated, companies wish to bring further growth by launching new brands into the local market. Over 2019, this trend was heavily exhibited in the dermo-cosmetics segment, which showed a significant rise. As there is an abundance of brands in the market, the competition is more intense, leading to cannibalization on the one hand, and a confused customer on the other hand.
In order to maintain shares for cosmetics brands in the long-term, companies must invest strategically in marketing and positioning, while offering good prices and focusing on innovation and global trends.
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