The impact of Coronavirus or more specifically COVID-19 has been steadily snowballing worldwide and unfortunately the beauty industry is not immune to its effects.
As governments around the world battle to contain the virus and minimise the health effects of it, governments and industry are also battling to minimise the widespread economic impacts of the virus with the stock markets seeming to take a hit each day currently and talk of impending worldwide recessions.
Writing about the impact on the beauty industry may seem superficial compared to the health impact but the beauty industry is a significant part of the economy and the impact on the beauty industry will be far reaching for months and possibly years to come.
The World Health Organization describes Coronaviruses as a large family of viruses which in humans are known to cause respiratory infections ranging from a common cold to more severe respiratory infections and pneumonia. The most recently discovered Coronavirus disease has been named COVID-19.
What is COVID-19?
COVID-19 is the infectious disease caused by the most recently discovered Coronavirus. It has already been classified as a pandemic. This new disease was unknown before the outbreak began in Wuhan, China, in December 2019. To date there is no vaccine to protect against COVID-19.
80% of people reportedly recover from COVID-19 without needing any special treatment but unfortunately 1 in 6 people do become seriously ill with pneumonia and breathing difficulties. It appears to be older people and those with underlying medical problems that are affected the worst and are the people dying from COVID-19.
The WHO has documented their deep concern both by the ‘alarming levels of spread and the severity of COVID-19’, as well as by the ‘alarming levels of inaction’ by countries.
The Impact of COVID-19 On the Beauty Industry
Disrupted Supply Chain
It is an increasingly interconnected and global world and with China so severely affected by the COVID-19 pandemic this affects most other countries as well, especially Australia who is a close trading partner with China.
The impact of COVID-19 on the beauty industry supply chain is widespread and severe. Many beauty companies worldwide rely on China for the production of their beauty products or at least the packaging they use for their products.
China was the first nation hit by COVID-19 and remains the hardest hit nation to date. As a result of Chinese workers being forced to stay at home in quarantine and Chinese manufacturing factories going into lockdown, the potential impact on the beauty industry world wide is massive.
To date in Australia we have been seeing shortages of toilet paper in shops as consumers inexplicably panic buy and stockpile this item despite toilet paper being manufactured in Australia from Australian materials and there thus being no reason to panic buy toilet paper.
There have also been more understandable shortages of protective face masks and hand sanitiser as this is purchased in bulk as a preventative measure by consumers.
But soon we may start seeing shortages of beauty items and everyday toiletries once beauty companies use up their reserves of products and packaging and are unable to access further supplies from China and are unable to maintain normal production levels or normal product distribution for the time being.
All the above can start having economic impacts on beauty brands and beauty retailers as well as the staff employed in these industries. Casual workers will be the first to be let go.
There will also be less demand for hairdressers and beauty therapists as consumers avoid close contact with other people for fear of contamination.
Every day it seems more people are needing to self isolate after potential exposure with infected individuals. Several schools and workplaces in Australia have closed down for short periods after reports of COVID-19 within their ranks already. If Australia follows what’s been happening in China and Europe there will be more and more school and workplace closures.
Consumers have already started changing their buying behaviours due to the outbreak of COVID-19, avoiding or limiting their time in public areas such as busy shopping malls especially in areas where COVID-19 has been known to have occurred or is perceived as being likely to exist.
This reduced foot traffic in busy shopping precincts will result in decreased retail beauty sales. Beauty lovers will concentrate on using up beauty products they already own rather than risk going out and shopping in physical stores for new products. Online sales may become more popular during this pandemic and beauty brands with established online presences may benefit.
Less people worldwide are travelling internationally. Countries are closing their borders to international visitors from certain countries. Australia has restricted travellers from China, Korea, Iran and Italy already. The US has restricted visitors from all of Europe with the exception of the UK. Australia may follow suit and restrict visitors from more countries too as more COVID-19 hot spots occur around the world. This means significantly less tourists in Australia and less tourist spending dollars as well.
Cancelled Beauty Shows & Expos
Internationally there have been numerous cosmetic-specific shows and expos that have been postponed or cancelled to help prevent the spread of COVID-19. These will result in reduced new business for the beauty brands that normally attend and conduct business at these expos.
Specific Beauty Brand Actions
Beauty brands and companies are responding to government advice.
David Jones has suspended all in-store beauty treatments and on counter beauty services until further notice.
Glossier has closed all its stores.
M.A.C have cancelled all client makeovers across Australia and are adopting a strict no-touch policy.
Mecca have suspended their in-store services including booked appointments and Beauty Labs.
Sephora have suspended their in-store makeup services.
No doubt more brands will be suspending and altering the way their provide their services.
Decreased Beauty Launches & Events
In Australia all events with over 500 people are now being cancelled and many smaller events are also following suit and being cancelled to prevent the spread of COVID-19.
More planned local beauty launches and events will also be postponed or cancelled during the COVID-19 outbreak pandemic and new events will not be planned during this time.
Although the Australian government has announced a multi billion dollar Coronavirus stimulus package to try and avoid recession in Australia, if a recession does eventuate in Australia, and this is looking increasingly likely, then discretionary spending on items such as beauty will reduce even further. The one beauty item that historically has been recession proof however is lipstick. It seems like a relatively affordable item of luxury that women still buy when they have to restrict their other spending.
Although a lot is unknown about how much further and how rapidly COVID-19 will spread and how much the Australian and worldwide economies will be impacted, most sources all seem to agree that we have not yet reached the peak of the pandemic nor seen the worst of its effects.
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Ingrid is a lifelong beauty lover living in Australia who started Fabulous and Fun Life in 2014 to share her love of all things beauty. Having previously worked in the health industry she loves effective beauty products that are based on scientific evidence. Also being a qualified ergonomist Ingrid is especially interested in researching & testing beauty appliances to write product buying guides to help you find the best beauty appliance to suit your specific needs. Ingrid has worked with numerous beauty brands & PR companies. To contact Ingrid, visit her contact page. Ingrid’s best beauty secret is sleeping on a silk pillowcase.