Melbourne's beauty industry booms thanks to flagship stores

Tourism has provided a strong driving force to retail trade in Australia. 

GPT's market experts reported a 24% increase in cosmetic sales in Melbourne over the last 12 months with revenue from beauty sales increasing to 49% in February alone, compared to the same time last year.

Australia's second largest source of inbound visitors behind New Zealand are Chinese tourists which a recent Oxford Economics global study reports them to spend $5 billion annually – a figure expected to reach more than $13 billion by the end of the decade. 

Analysts say growth is down to a strong flagship store presence and accessible products via a '1099' square metre beauty precinct which provides convenience for the consumer as cosmetics stores are all based in one area.

With a host of strong performers in the beauty category including MAC, Kiehls, The Body Shop and L’Occitane, Melbourne Central is expecting to see figures continue to strengthen, supported by the launch of cult beauty brand Urban Decay at Mecca Maxima where students, tourists and residents are all living and working in close proximity.

Importance of on and offline shopping experience​

With the rise of online shopping, Melbourne is also encouraging its' retailers to provide unique in-store experiences that shoppers do not receive online, including hand massages and skin consultations.

However, it is worth noting that sales of cosmetics and fragrances online are set for significant growth in Australia over the next four years, according to market researcher IBISWorld.

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

Many of the major online cosmetic and fragrance retailers that have emerged online in Australia 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,”​ adds Whytcross.