Market Trends of Israel Cosmetics Products Industry
This section covers the major market trends shaping the Israel Cosmetics Products Market according to our research experts:
Inclination Toward Vegan and Cruelty-free Cosmetics Products
The cruelty-free (no animal testing), vegetarian (no byproducts of animal slaughter), and vegan (no animal ingredients at all) beauty markets have exploded in recent years globally and have been finding their space in the Israeli market too. Additionally, with the advancement of vegan products in the country, Israeli consumers are paying extra attention to not only a particular shade of lipstick that suits them but also to how the lipstick is made. Animal-free alternatives may lead companies to produce lab-grown human skin samples for testing cosmetic products, and this ability to create samples on demand also increases the accuracy of results. As a result, the cost of natural or vegan cosmetic products is rising.Owing to the increasing employment rate in the country, consumers are prioritizing their skin and personal health, which is driving the growth of vegan and cruelty-free cosmetics products. For instance, according to the IMF, the number of employed people in Israel in 2021 reached 3.96 million and was forecast to continuously increase between 2022 and 2023 by a total of 0.1 million people (+2.42 percent). The number is estimated to amount to 4.25 million people in 2023. In addition, the increasing demand for vegan cosmetics among millennials and technological advancements are supporting the growth of the market studied.
Moreover, different government initiatives to simplify the importation of cosmetic goods are expected to support the growth of the market studied. For instance, the registration of cosmetics is necessary for anyone who intends to import and market cosmetic products in Israel. According to a new Israeli law, the registration process for importing cosmetic goods will be significantly simplified in 2021. The product license (approval), managed by the Israel Ministry of Health (MoH), has now been replaced by the notification process so that the product registration becomes immediate. The responsible representative representing the manufacturer or importer in front of the MoH can register or renew a cosmetic license online. Such initiatives are expected to support and boost the market's growth during the forecast period.
Supermarket and Hypermarkets holds a Significant Share
Due to high consumer demand, major supermarkets are expanding their range of cosmetics, offering a diversity of products. The appeal led to the growth observed in the supermarket segment, causing boomers to seek safe exploration of various cosmetic products formulated with innovative technology and packaging. The trend of bulk shopping is increasing due to the increased income and busy lifestyles of consumers, and selling the products through supermarkets signifies the transaction-building strategy of the seller as it leads to increased impulse purchases by the consumer. However, buying from supermarkets has been a lengthy process for the customers due to the presence of a single major player in the country called Shufersal (or as most people called it, "Supersol").
To address this demand and fill the gap, many other major supermarket chains, like 7-Eleven and Carrefour, have recently entered the market. For instance, in July 2022, the French retailer Carrefour announced that it had signed a franchise deal with Israel's Electra Consumer Products and its subsidiary Yenot Bitan. It stated that the agreement would result in the retailer building Carrefour-branded outlets in Israel by the end of 2022. Such major supermarkets entering the Israel market are expected to significantly improve the local shopping experience as well as customer purchasing power with better offers at more affordable prices. Moreover, many new cosmetic brands entering the market with their store openings are also expected to boost the market's growth during the forecast period. For instance, in June 2021, makeup brand NARS opened its first store in Israel. The store, located in the Ramat Aviv shopping mall, is claimed to be the brand's largest in Europe and the Middle East.
