German luxury cosmetics market looks to a year of marginal growth

By Katie Bird

- Last updated on GMT

Related tags: Sun care products, Marketing

The German luxury cosmetics market could see slight sales increases in 2010 with woman’s fragrance and facial skin care leading the way, according to the German high-end cosmetics association VKE.

VKE Cosmetics Association, which represents brands in the mid to higher price bracket, has predicted sales increases of up to 1 per cent, depending on developments in the labour market and consumer sentiment.

According to VKE president Stephen Seidel, the key to success in 2010 will be the ability to captivate the consumer with innovative concepts and the creation of new brand experiences.

In addition, he said companies must put a stop to price wars and discounting which can undermine the value of the brand.

Recovery in Q3 and Q4 in 2009

Results for 2009 were better than expected and showed some recovery in the second half, according to the association.

Fragrance was the only sector to report a sales increase (of 0.3 per cent) which VKE says is down to classic products as well as some new launches. The colour cosmetics sector, which is traditionally a driver of the high end market, saw a sales decrease of 0.4 per cent compared to 2008.

Sales of facial and sun care products dropped 1.1 per cent and the body care segment suffered a significant sales decline of 5.9 per cent over the year.

CEO of VKE Martin Ruppmann said many of the association’s members are looking to 2010 for recovery, with 21 per cent predicting the year will see sales increases for their brands, and just over half expecting similar results to 2009.

The highest expectations are found in the woman’s fragrances and the facial and sun care products categories, he said.

Fight against counterfeiting

The organisation has also announced that it will be cracking down on the counterfeiting and piracy that affects the luxury sector in particular.

Counterfeiting damages the industry and the public, Ruppman said, as consumer health can be endangered by the faulty goods.

He called for more rigorous enforcement of existing laws and the development of more severe punishments for perpetrators to try to limit the counterfeiting industry.

Related topics: Business & Financial

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