Asia Personal Care & Cosmetics Market Guide 2016

Personal Care & Cosmetics Products
Country Guide: Australia
Executive Summary
Through 2018 there are good prospects for Australia’s personal care and cosmetics markets, with the
overall market conservatively estimated to grow by 4% per annum in 2017 and 2018. Growth in
Australia’s consumption and imports of these products had slowed in 2013 through 2015, due to a
decline in commodity prices and a devaluation of the Australian dollar. However Australia’s GDP is now
projected to grow at 2.5% in 2016 and 3% in 2017, fueling consumer spending. Australia’s relatively
high level of discretionary spending, reliance on imported personal products—74% of all consumption in
2015—and affinity for U.S. brands makes Australia a promising market for U.S. cosmetics and personal
care products. 1
In 2015, Australia’s total personal care and cosmetics market is estimated at US$3.4 billion. Imports
satisfy over 70% of the domestic market with the U.S. holding the largest share at 22%. Other key
sources of import are China and the EU. Given Australia’s relatively small population, of 24 million
people, import competition is very high and imports are up four percent, per annum in the past two
years.
Approximately 66% of Australia’s population is between the ages of 15-64. Australia’s ageing population
combined with the fact that consumers are staying longer in the workforce has been a major driver in
the demand for cosmetics. The market is conservatively estimated to grow by four percent annually in
2017 and 2018.
Australia has the fourth highest business to consumer (B2C) ecommerce sales rates in the Asia Pacific
Region behind China, Japan and South Korea. Australia also has the highest internet penetration rate in
the region. Australians spent around AU$1.17 billion ($882 million USD) on online cosmetic purchases in
2015. It is estimated that B2C ecommerce will grow by another eight percent in 2017. Social media is a
significant driver in the promotion of B2C transactions.
Given fierce competition in Australia’s retail sector, margins for mass and masstique products are
tighter. With the introduction of Sephora and the high internet penetration among the Australian
population, U.S. firms may find greater opportunities in niche and premium products, through cosmetics
specialty stores and online.
1 Australia has the fifth highest average household net disposable income rate in the OECD. International Monetary Fund.
Australia Summary. September 9, 2016.