Yahoo Finance Lipstick Index: Why Aussies like Charlotte are still spending up on beauty
Charlotte Wade is still spending between $50 and $100 on beauty products each month.
Aussies are treating themselves to small luxuries including make-up, beauty and skincare products, despite the skyrocketing cost of living.
Melbourne woman Charlotte Wade is one of the many Aussies continuing to spend up on beauty products and skincare, forking out between $50 and $100 per month on products like foundation, cleanser, moisturiser and serums.
“I haven’t made any changes at this stage to my skincare and beauty-product spending,” Wade told Yahoo Finance.
Also read: Why spending money can make you happier (but it’s not how you think)
Also read: Financial adviser shares 4 practical tips to fight inflation
Also read: $200 per month saving: 3 grocery hacks to beat the cost of living
Wade said she saw beauty and skincare as an “affordable way” to treat herself and continue to feel good, despite other pressures she was facing.
The 26-year-old mostly buys skincare products that are already part of her everyday routine. But she said she was also influenced by TikTok to buy beauty products to see what the hype was about.
“I’m starting to see a lot of content about more affordable beauty products from drug-store brands that have the same effect as designer or boutique brands that are more expensive, so I’ve started purchasing more of these,” she said.
Wade’s current spending habits mirror a theory known as ‘the Lipstick Index’.
What is the lipstick index?
The Lipstick Index is the idea that sales of affordable luxuries, such as lipstick, tend to rise during tough economic times. The theory is that while people might not have enough cash to spend on big-ticket items, they can still afford small luxuries to make themselves feel good.
The term was popularised by Estee Lauder’s Leonard Lauder after he noted the company was selling more lipstick than usual during the early 2000s recession.
L’Oreal chief data and analytics officer Varun Verma said the Lipstick Index was something the cosmetic giant was witnessing at the moment too.
“There is this quest of beauty that is continuously ongoing, even in an economic downturn, and now as well. People still feel aspirational about beauty and beauty products in general,” Verma told Yahoo Finance.
In the March quarter, Verma said L’Oreal grew 13 per cent globally and 26 per cent across its SAPMENA zone, which included Australia and New Zealand. This growth has been seen across all beauty products - not just lipstick.
In Australia and New Zealand specifically, the company was seeing distinct demand for skincare products - including from the likes of La Roche Posay and CeraVe.
Verma also noted the total number of orders L’Oreal was processing was still increasing, despite price changes.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.
