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Published
Feb 13, 2019
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Lipstick losing significance as an economic indicator, analysts say

Published
Feb 13, 2019

Lipstick is no longer a barometer of consumer demand analysts say, as the beauty accessory looses significance in a growing market. 

The lipstick index's reliability is being called into question almost 20 years later - Facebook: L'Oreal Paris

 
Dubbed the "lipstick index" by former Estee Lauder chairman Leonard Lauder in the early 2000s, the lipstick index's reliability is being called into question almost 20 years later. 
 
At the time the term was coined, Lauder was following a trend where women substituted expensive luxuries for practical items such as lipstick, but today the dynamics of the marketplace have shifted. 

According to marketing research company Mintel, during the great recession, lip products actually fell by nearly 3 percent, which would undermine Lauder's original thesis.
 
Still, the “lipstick effect” continues to be cited as an economic indicator with the CEO of French cosmetics giant L'Oreal using the term just this week to explain growing sales in China. 

The lipstick industry is forecast to hit $17 billion in market value by 2023, according to marketing firm TechSci Research. 
 
It’s also believed that other beauty products are what is lessening the importance of lipstick sales. In fact, nail and lip products account for just a fraction of the color cosmetics market.
 
According to Euromonitor, beauty market sales are set to surpass more than $11 million for a global value of $76 million this year. 
 

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