Beauty Supply Boom, Will It Continue in 2021?
Bright Forecast for 2021 U.S. Economy
Major organizations related to the economy including Goldman Sacks and the IMF forecasted that U.S. economy would grow five percent over more in 2021 after passing the dark tunnel of COVID-19. Most economic research institutes expected that the U.S. and the global economy would return to the pre-pandemic level.
U.S. Economic Growth Forecast (source: Goldman Sachs)
Like the rosy global macroeconomic outlook, can the beauty supply businesses flourish in 2021?
In 2020, beauty supplies thrived despite the coronavirus pandemic.
The COVID-19 economic stimulus packages packed African American consumers’ pocket with cash.
How Americans spent the stimulus payments in 2020?
How Americans spent the COVID-19 stimulus payments (source: U.S. Census Bureau, Household Pulse Survey)
Most people spent the stimulus payments on purchasing goods of personal necessity.
Especially, a higher portion of African Americans (83%), compared to 65% of White Americans, spent the COVID-19 stimulus checks to purchase necessities rather than paying off debts or adding into savings.
COVID-19 stimulus payments on personal expenses(source: U.S. Census Bureau, Household Pulse Survey)
COVID-19 Quarantines Boosted Spending on DIY Beauty Products
Will the Beauty Supply Boom Continue in Coming Year?
Both favorable and unfavorable factors exist. Nonetheless, most of beauty supply insiders expect the 2012 beauty supply market would not perform poorly citing the favorable factors such as the quick rebound of global economy and strong economic stimulus packages.
<Favorable Factors>
COVID-19 Vaccines and Treatment Options
Tax return
The second stimulus check
V-shaped recovery of global economy
<Unfavorable Factors>
Reoccurrence COVID-19 Spread
High unemployment rate among African Americans
Global trade wars continue.
Business and household debt increase.
None-the-less,
the above factors are of short-term impact only, and in a long run, they can induce a bubble in the equity market and deteriorating fiscal health, among other side-effects, according to many economy analysts.
While the beauty supply industry thrived during the COVID-19 pandemic in 2020, we should prepare ourselves to make necessary changes for a sustainable growth in a long run.
There is a saying, “You should prepare for the worst in a peaceful time.” In 2021, we will need the wisdom of preparing for an economic downturn at a flourishing time.
