rends and opportunities The market The Italian consumers believe cosmetic products are important for physical and physiological well being and they are, generally, extremely sophisticated and brand-conscious. Italians have been keeping pace with the rest of Europe in realising the benefits of a healthy lifestyle. This is reflected in the growing popularity of non-traditional healthcare treatments (eg. homeopathic, naturopathic, herbal, ayuveda) and the increase in sales of cosmetic and toiletry products containing non-synthetic ingredients. Cosmetics and toiletries categories are as follows: * Gift articles * Cosmetics * Face care * Personal hygiene products * Men’s toiletries * Oral hygiene * Hair care * Body care products * Baby products * Perfumes * Hand products Italy imports most of its raw materials, so Australian suppliers might find they have a competitive edge, given the perceived purity of products grown and produced in an unpolluted environment, and the notion that Australia is highly advanced in scientific research. Product safety is a priority among Italian consumers. Opportunities While the Italian cosmetics market is highly competitive, it is open to new products, particularly those that are natural or contain natural active ingredients derived from plants and vegetable extracts. Good potential also exists for innovative products aimed at problem areas (eg. facial creams for wrinkles, cellulite treatments, sun block and related protection from the environment, enriched lipsticks, etc.). Similar potential exists for cosmetic products aimed at non-traditional consumers such as men, children and senior citizens. Opportunities in Italy's cosmetics and toiletries industry exist in the following areas: * Hair care products * Body care products and body hygiene products * Pre- and after-shave products * Perfumes, eau de perfume, eau de toilette, and eau de cologne * Lip care products * Moisturisers and cleansers * Personal hygiene (soaps, deodorants, etc) * Make-up * Dermatology products for babies Since Italy imports virtually all its raw materials, it is possible to supply Italian manufacturers with ingredients such as aloe vera, lavender, and essential oils. There are also good prospects for products that distinguish themselves from what is already available on the Italian market, eg. tea-tree and eucalyptus-based products. However, the packaging must be of good quality and stylish design. Private labels also offer opportunities via: * Production under license or contract of goods on behalf of an Italian retailer or brand owner * Bulk export of unpackaged goods for re-labelling, repackaging and distribution through a well-established brand name back to top of siteback to top Tariffs, regulations and customs All European Union (EU) countries are covered by a harmonised trade system. Common Customs Tariff (CCT) is applicable to goods from non-EU countries, including Australia. Goods travelling between EU member states are free of customs duty. There are no trade barriers or quotas on cosmetics or skincare products exported to Italy. Customs duty charged on most cosmetic products is 6.6 per cent on CIF value. An additional 20 per cent is applicable regardless of the country of origin. We recommend that you obtain a written ruling from the Italian customs service (or another EU member state) in the form of a Binding Tariff Information (BTI) before shipping any samples or products. Some products may require an export licence, import licence or health certificate. Please contact Austrade, or your freight handler. Once you have complied with EU regulations, all member states become potential export destinations. Because goods travelling between member states are free of duty, once you have imported your products into the EU, you can move them freely from country to country, increasing potential. Industry standards On the 17 April 1997, the Italian Council of Ministers approved the Legal Decree necessary to convert the European Union Directive on Cosmetics into domestic law. This law provides for a series of measures to guarantee clarity about cosmetic products and improved consumer safety. EU regulations also require that the following details are provided to the local Health Ministry: * Contact details of the local importer/distributor * Description of the cosmetic products * Complete contact details of the individual and/or company appointed within the EU to retain the 'Product Information Dossier' Containers and/or packaging must bear, in indelible, legible and visible characters: * Name or trade name and address or registered office of the manufacturer or the person responsible for marketing the cosmetic product within the EU. * Product function and list of ingredients. * Nominal contents at time of packaging (by weight or volume). * Expiry date indicated by 'Best before end…' * Particular precautions for use and the batch number or reference to permit identification. * The labelling must be in Italian, but can either be printed directly on the package or in the form of a sticker. The information supplied is a summary of EU requirements. It is not comprehensive and is not a substitute for legal opinion. back to top of siteback to top Marketing your products and services Market entry It is essential to deal with a local distributor or agent who is familiar with European Union (EU) and Italian import-export legislation, marketing practices and assorted paperwork. A good place to start is by attending Italy’s major cosmetics trade fair, Cosmoprof. Also, a tour of as many retail outlets as possible will provide insights into the type of products and images Italian consumers prefer. Another option is to manufacture products locally, in order to avoid expensive freight costs, ensuring that local contacts are reliable. Alliances or joint ventures with local manufacturers might be a more viable option. Franchising is highly developed in Italy, and is seen as an innovative way to introduce a new business concept in Italy. Outfits such as The Body Shop are highly successful, and franchising could represent an excellent route into the Italian market, provided formats are adapted to the local business environment. The Italian market is fiercely competitive, and Australian products should emphasise unique characteristics such as: * Natural ingredients - such as aloe vera, native essences * Environmentally friendly manufacturing * Innovative formulations for specific conditions – eg. cellulite, wrinkles, spots * Sunscreens with high sun protection factors, especially for children * Barriers against day-to-day pollution * Niche products for specific categories of consumers, eg. men, teenagers, women over 50 The promotion of a cosmetic product is the key factor in its success. To attract distributors and retailers to list your products, consider: * Financial support for advertising and marketing in Italy. * Make product samples available for retailers to test market. * Attractive point-of-sale is vital in this competitive market. * Attractive packaging, tailored to local tastes, is crucial. * Emphasising that products have not been tested on animals is a good selling point. The market is highly competitive, but Australian exporters may have good prospects especially for ‘natural’ face, body and hair care products, since Italians tend to perceive Australia as a sunny, unpolluted environment. However, products that are too highly scented such as tea tree and eucalyptus might be perceived as being ‘clinical’, and subtlety is recommended. Italians are traditionally fashion and style conscious, so packaging and presentation are crucial. Packaging must be geared toward the sector of the market at which products are aimed. The leading cosmetic brands have spent considerable sums of money in the design of their packaging, including the labels, and this has resulted in increased market penetration and awareness. Packaging must conform to Italian and European Union laws. Branding is equally important and if an Australian company would like to sell its products under its own brand, it is necessary to create the reputation of the product through a promotional campaign. Advertising costs are very high in Italy, especially in the glossy up-market fashion and glamour magazines, and the newspaper supplements. Local retailers would expect contributions towards promotional expenses. Brochures and product samples are more useful for Italian retailers than information from websites. Take seasonal buying patterns into account when considering your product and think about the end user: Italians are sun-lovers but are becoming increasingly aware of the need for protective sunscreens. Pollution is high in many large Italian cities, and products that combat its harmful effects on the skin are popular. Italian men also tend to use face and skincare products extensively. Distribution channels The distribution system is highly fragmented. Although supermarkets, hypermarkets and department stores sell large volumes of cosmetic products, Italians still prefer traditional channels such as (in order of importance): * Supermarkets/hypermarkets * Perfumeries * Pharmacies and chemists * Hairdressing salons (both for women and men) * Beauty salons * Herbalist stores * Door-to-door sales (direct sales) Department stores Department stores welcome companies willing to pay for setting up 'stores-in-store', corners and kiosks to launch and promote new products. The main Italian department store chains are: * La Rinascente - www.rinascentre.it/english/indexflash.htm * Coin (Italian only) - www.gruppocoin.it * UPIM (Italian only) - www.upim.it * Oviesse Supermarkets Principal supermarket/hypermarket chains include: * Carrefour (Italian only) - www.carrefour.it * Auchan - (belongs to the La Rinascente group) * Unes (Italian only) - www.unes.it * Esselunga (Italian only) - www.esselunga.it * GS Perfumeries Italy abounds in perfumery stores (Profumerie), where Italian consumers purchase their cosmetics and toiletries. They value the personal attention and advice they receive from trained staff, and appreciate the wide range of brands that most stores stock. Perfume stores specialise in perfumes (84.5 per cent), men’s toiletries (43.6 per cent), make-up (49.6 per cent) and face care products (45.5 per cent). Pharmacies and chemists Italy’s pharmacies are either municipal or privately owned – there are no chains of pharmacies as there are in other countries. They tend to specialise in European brands sold exclusively through pharmacies, such as Vichy, Phas, and RoC, but many also sell homeopathic and natural remedies and cosmetics. This retail outlet has a market share of 14.1 per cent. Pharmacies specialise in face care products (26.5 per cent) and oral and body hygiene products (15.1 per cent). Mass distribution Supermarkets and hypermarkets in the country saw an increase in cosmetic product sales (up to 5.3 per cent) and they accounted for 28.5 per cent of the total market. They are specialised in oral and body hygiene product and hair care product. They offer better prices and a more innovative service to the customer. Beauty salons and spas Thermal spas and health/beauty farms are another small but promising outlet for the right products. There are popular spas at Montecatini, Ischia, Salice, Sirmione and Saturnia, and all also offer beauty treatments. Patrons are generally willing to pay higher prices for innovative and unique products. Hairdressers and aestheticians registered the majority of cosmetic sales in Italy. Hairdressers show a 1.1 per cent turnover increase while aestheticians a 1.8 per cent turnover decrease. Herbalist shops There is an ongoing interest in naturally derived cosmetic products. Herbalist outlets saw an increase in sales of 7.7 per cent. Direct sales A proliferation in direct sales channels demonstrates that unconventional sales and distribution methods that used to be reserved for other markets are also proving to be successful in Italy, too. This retail outlet saw a 2.3 per cent turnover increase. back to top of siteback to top Links and industry contacts Cosmetics and toiletry–related resources Assochimica, Association of Allied Chemicals Enterprises - http://assospecifici.federchimica.it/ASSOSPECIFICI_ev.htm Beauty Online - www.beauty-on-line.com EU - DG III Cosmetics Site Map - http://dg3.eudra.org European Cosmetic, Toiletry and Perfumery Association - www.colipa.com International Federation of the Society of Cosmetic Chemists(IFSCC) - www.ifscc.org EU - DG III Cosmetics Site Map - http://dg3.eudra.org Italian Association of Profumerie - www.fenapro.mip.it (Italian only) Italian Association of Fine and Specialty Chemicals (ACFIS) - www.acfis.it (English version under construction) Italian Association of Young Pharmacists – www.forum.it Italian Union of Perfumery, Cosmetics, Toiletries and Allied Industries - www.unipro.org (Italian only) Department stores La Rinascente - www.rinascentre.it/english/indexflash.htm (in English) Coin - www.gruppocoin.it (Italian only) UPIM - www.upim.it (Italian only) Supermarkets/hypermarkets Carrefour - www.carrefour.it (Italian only) UNES - www.unes.it (English version under construction) ESSELUNGA - www.esselunga.it (Italian only)Analyse distributiekanalen van Italiaanse comsetica GS - www.g-s.it (Italian only) Government, business and trade resources for Italy European Union - www.europa.eu.int Ministry of Health - www.ministerosalute.it Media European Cosmetic Market - www.ecm-magazine.com back to top of siteback to top Contact details The Australian Trade Commission (Austrade) is the Federal Government agency that helps Australian companies win overseas business for their products and services by reducing the time, cost and risk involved in selecting, entering and developing international markets. Austrade offers practical advice, market intelligence and ongoing support (including financial) to Australian businesses looking to develop international markets. Austrade also provides advice and guidance on overseas investment and joint venture opportunities, and helps put Australian businesses in contact with potential overseas investors. A list of Austrade offices (in alphabetical order of country) is available. More information For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au