Look Towards A New Future

Jun 25, 2012

Beauty & Personal Care Market in Sweden

The Swedish economy recovered quickly from the recession of 2008/2009 and in 2011 the Swedish economy continued to show strong growth rates in 2011. In the later part of 2011, however the first signs of a cooling down of the economy started to appear and many retailers reported slower than expected sales. The economic instability in many European countries made the Swedish consumers to become more cautious in their spending habits and many started to trade down to cheaper options. How sales are developing in 2012 is highly dependent on how quickly the consumer confidence can be regained.
Natural and organic continues remains the leading trend in 2011
In 2011 the natural and organic trend continued to be one of the strongest trends. The increased demand for natural and organic products can mainly be explained by health concerns and products made from, for example, certified organic ingredients, which are perceived as being healthier than products made from synthetic ingredients. Many consumers who have become allergic to products such as fragrances are turning to organic products which use scents made from essential oils. The awareness that a large amount of products applied to the skin are actually absorbed by the body is also on the rise. A growing number of consumers are also turning to organic products due to environmental concerns, although health concerns represent a strong reason.
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Report Details:
Published: June 2012

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Beauty and personal care products is concentrated
Beauty and personal care products is concentrated to a relatively few leading international companies which own a large number of brands. The leading beauty and personal care players are, however, increasingly challenged by retailers launching private label products. Growing demand for natural and certified organic products has also benefited smaller companies which produce niche products for environmentally and health aware consumers. The major beauty and personal care companies can, however, take advantage of the growing demand for private label products and organic products by launching new brands specialising in either budget products of, for example, certified organic products.
Internet retailing continues to take shares
Although Internet sales of beauty and personal care products is still relatively small compared with other channel types, the importance of Internet retailing is growing rapidly. The popularity of Internet retailing can be explained by the fact that Swedes live increasingly hectic lifestyles. Product availability is broader and online stores make it increasingly easy for consumers to shop around for the best prices. On the other hand, Internet retailing is challenged by the fact that it is more difficult to test products before buying – something which can be solved by offering free samples. Online shops requires large investment and especially smaller online stores have difficulty competing against the major players, as delivery costs mean that consumers prefer stores where they can obtain all the products they require.

Sales projected to be weaker over forecast period
The forecast period CAGR is projected to be weaker than that seen over the review period. Although the Swedish economy has recovered quickly from the recession of 2008/2009, several factors may hamper Swedish consumption over the forecast period. A prolonged instability in important export countries in Europe is not only deterring exports but also affecting the consumer confidence in Sweden. Swedes have for a long time enjoyed rising housing prices and the economic downturn of 2008/2009 did not significantly affect this. There are, however, several warning signs that the housing market in Sweden is overvalued and that a correction in the prices may come during the forecast period – something which would also negatively affect consumption of goods such as beauty and personal care products