Business analyzer Kline & Company reported the global sales results for cosmetics and toiletries through the direct sales channel rose to $15.4 billion in 2004, up 8 percent from $14.3 billion in 2003.
The study, GLOBAL COSMETICS & TOILETRIES, reveals that direct sales represent about 10 percent of the $150 billion world market for cosmetics and toiletries.
This hard-to-track channel, consisting mainly of person-to-person sales and purchases made from infomercials, catalogs, and the Internet, is a key sales venue for developing countries. Channel growth outpaced growth of the global cosmetics and toiletries market as a whole, which advanced by about 4 percent in 2004.
China led the way for growth with a 64.5 percent increase in manufacturers' sales from 2003 to 2004. The reason for this expansion is that the traditional channels of distribution are not as evolved as other parts of the world. And with the ban on direct sales now lifted in China, this high rate of increase is expected to continue.
"In China, many consumers depend on direct sales as a way to get their beauty products because there may not be a store nearby," says Carrie Mellage, industry manager for the Consumer Products practice of Kline's Research division. "Direct sales also allow people to socialize and have one-on-one contact, and this factor shouldn't be discounted," she adds.
Other countries where Kline noted robust growth in direct sales include Brazil, Russia, Argentina, and India.