Online fragrance and cosmetics sales set to boom in Australia

By Simon Pitman

- Last updated on GMT

Online fragrance and cosmetics sales set to boom in Australia

Related tags Perfume

Sales of cosmetics and fragrances online are set for significant growth in Australia over the next five years, according to a new report by market researcher IBISWorld.

The market is estimated to have grown at a compound annual rate of 17.1% between 2009 through to 2014, which puts it at a value of $259.0 million, according the company’s latest report entitled: Online Perfume and Cosmetic Sales Industry in Australia.

However, this growth is expected to plateau in the coming years, with growth during the year 2014 -2015 expected to slow to around 9.2%.

Aussies shift to online puchasing

The report highlights how the growth is being fueled by the significant shift by the Australian population to making purchases of fast moving consumer goods online.

“Consumers are becoming more adept and comfortable with online shopping, as the internet increasingly becomes a customary means of purchasing products,”​ said IBISWorld industry analyst David Whytcross.

The report also highlights how the success of online cosmetics and fragrance sales is mainly down to the fact that consumers of this type of product are moving online to make the purchases because largely they already know what they are getting.

High street retailers shift presence online

Many of the major online cosmetic and fragrance retailers that have emerged online in Australia in the past few years are major players with established names for themselves in this area from bricks-and-mortar operations, evinced by names such as Priceline, Myer and David Jones, with more players expected to join the game in the coming years.

“Industry operators have benefited from strong economic conditions over the past five years, as positive consumer sentiment and rising discretionary incomes have pushed consumers to upgrade to higher-end products when shopping online for perfume and cosmetics,”​ said Whytcross.

The market has benefitted from a continued increase of female online shoppers, as well as an increasing number of younger consumers as well as image-conscious men.

Looking ahead to the future this demography is expected to expand further to include more older females who are increasingly turning to the internet to make purchases.

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