“Made in Italy” export and Beauty: how do our companies conquer foreign countries?

Does the excellent standard of Italian export still exist? Or is it now a thing of the past? There is no reason to despair, as Italy still nurtures prestigious supply chains in which mostly small and medium-sized companies provide an excellent product or service to international supply chains. A snapshot has emerged from the Observatory on the Economics of Beauty at the Banca Ifis Studies Office. Carmelo Carbotti, Head of Strategic Marketing & Research, answers the main questions facing the Italian entrepreneurial framework.

In 2023, how much is the Beauty industry worth? What are the main trends?

Beauty is a necessity that we can consider part of human identity, but which nevertheless remains immaterial and difficult to define. In our opinion at Banca Ifis, however, it is a real factor in production, the real constituent of Italian manufacturing.

Italians enjoy a “hidden curriculum” of art, culture and tradition, even in terms of their landscape, which ignites the Economy of Beauty. Beauty is, therefore, truly a distinctive factor in production that stems from care and excellence across Italian manufacturing sectors, bringing together in a common denominator the production of custom-made machines with the creation of a designer item or a garment. It is this variety of activities and products that makes the Beauty Economy transverse, as it consists of:

cultural and landscape tourism;
design-driven companies, capable of combining aesthetics with functionality and customisation, in mechanics, food and agriculture, cars, fashion, home systems, cosmetics, watchmaking and jewellery and artistic craftsmanship;
purpose-driven enterprises that effectively combine business and social impact.

In 2023, the Beauty sector was worth EUR 595 billion, contributing 29.2% of Italy’s total GDP. The GDP produced by the Economy of Beauty has increased by 19% since 2022, supporting the entire economy of our country, as evidenced by the fact that, in 2023, 74% of Italy’s entire growth was produced by its tourism businesses and activities.

What is the role of “know-how” and customisation in manufacturing?

Expert craftsmanship and customisation have emerged as the “special ingredients” in Italian production: they are worth 54% of national manufacturing output and the entrepreneurs themselves tell us how in almost 9 out of 10 cases they cannot be replaced by machinery. Make no mistake, however: technology is an indispensable factor for beauty businesses. 81% of the entrepreneurs believe that new machinery and new technologies can further increase the value of the “know-how” of their skilled craftsmen and strengthen the customisation capacity of the Italian offering.

80% of the manufacturing companies consider the “know-how” of their skilled craftsmen to be essential for market positioning. Why? What is it used for? It enables you to respond quickly to new trends and market requirements. It has clearly emerged that skilled craftsmen are the people capable of making each product unique, giving contemporary interpretations to tradition and combining the need for innovation with attention to sustainability.

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How do foreign markets reward Italian excellence?

The other element investigated was the value of craftsmanship and customisation in the international predilection for products made in Italy. We surveyed consumers in Italy and in 5 countries that are significant for our export: China, France, Germany, the United States and the United Kingdom. There is a high predilection for purchasing products characterised by their expert “know-how” and/or with a high level of Italian customisation, confirming the appeal that our country has in the domestic and international market. It ranges from 77% of Chinese consumers to 63% of senior citizens in France, never a lower value. When we then move on to investigate the intention to buy, the same consumers, both Italian and foreign, favour Italian products as they declare that they are willing to spend more on them: at the top are Chinese consumers with a percentage of 90%. The drivers behind this increased appreciation are high quality, attention to detail and sophisticated design. We could call this a perception of “uniqueness”.

In short, Beauty is good for the product and good for our country too. The combination of tourist attractions, high-quality goods and technological innovation gives value to an Italian Soft Power. In other words, Italy is able to engage in generating a sense of belonging and inviting people to follow and respect a system of values, almost to the point of perceiving it as their own.

By studying the Economics of Beauty, and making it a platform for discussion and proposals, Banca Ifis is recognising a very important sector made up of excellent small and medium-sized businesses that we, since the bank’s inception, have understood how to serve and, more importantly, want to continue to serve.

11 November 2024