【Economic】Lipstick effect
陶Aaron 陶Aaron
Lipstick effect
In 2018, China's economy has been in a downward trend, with real estate, financial industry, manufacturing industry, and every industry showing a recession.
On the contrary, the cultural and entertainment industry is very prosperous, with the rise of short video apps and live broadcasting platforms such as fast hand and chattering sound, and the film industry enjoys a booming business.When the economy was in decline, the cultural and entertainment industry was booming, which reminded me of an economic term, lipstick effect.
The "lipstick effect" is an interesting economic phenomenon caused by the recession that has led to lipstick sales.In the United States, whenever the economic downturn, lipstick sales will rise in a straight line.This is because, in the United States, people believe that lipstick is a relatively cheap luxury, in the economic downturn, people will still have a strong desire to consume, so they will turn to buy a relatively cheap luxury.As a "cheap and unnecessary", lipstick can act as a "comfort" to consumers, especially when the soft and moist lipstick touches the lips.What's more, a recession will reduce the spending power of some people, so that they will have some "idle money" to buy "cheap and unnecessary things".
Whenever the economy is in recession, people's consumption will turn to cheap luxuries, while lipstick, though not a necessity of life, is cheap and cosmetic, which can bring comfort to consumers.Under the economic crisis, consumers' shopping psychology and consumption behavior have changed, and ordinary consumers have become bargain hunters. The economic crisis has also made cheap cosmetics such as lipstick and cultural products sell well.The lipstick effect was first proposed in the 1930s during the great depression.
The global economic and financial crisis in 2008 brought lipstick to the market.Sales of lipsticks and face masks are on the rise, while "relaxation spending" such as hair and massage are also popular, us media said, in a sharp contrast to sluggish sales of other commodities and luxury goods.Sales at some of the world's biggest cosmetics companies, including l 'OREAL of France, confirm this view.L 'OREALl's sales rose 5.3 percent in the first half of 2008.The lipstick effect began to appear, and the theory of the lipstick effect, which was put forward in the 1930s, has been appearing in the overseas media.
During the recession, people's income and the expectations of the future will be lower, at this time of the first cut is the commodity consumption, such as to buy a house, car, travel abroad, so that it may have more than in normal times "cash", just to buy some cheap non-essential things, thus stimulating the cheap luxury consumption rising.Economic policy makers and enterprise decision makers can make use of this law, timely adjust their policies and business strategies, can minimize the negative impact of the crisis.
The popularity of the term "lipstick effect" in China stems from a debate in the country's film industry.The world economic and financial crisis is easily reminiscent of the economic crisis of the 1920s and 1930s.At that time, almost all industries were silent and cold, but Hollywood films took off, and lively musical films were popular, bringing joy and hope to the audience.Some people think that Chinese films can also use the "lipstick effect" to find an opportunity to rise in adversity.At the same time, some scholars pointed out that other cultural and entertainment industries could also benefit from the "lipstick effect" promoted by films.
From a microeconomic perspective, it is because the substitution effect is greater than the income effect.When you have a recession, people have less income, and they normally spend less;However, when people give up buying houses, cars, traveling abroad and other expensive goods, they will spend their spare money on the substitutes of those expensive goods --" cheap non-essential things ", which will produce the substitution effect.This substitution effect is far greater than the income effect of reducing consumption due to the decrease in income, so there is the lipstick effect.
The "lipstick effect" is just one of many consumer attitudes at present, which has created a certain possibility for the popularity of cultural products.For cultural and entertainment consumer goods, in addition to the "lipstick effect", "content is king, service first" is always the same iron law.When the economy is depressed, the pressure of life will increase, heavy life always needs something easy to relax yourself, so movies and other entertainment market consumption is not very expensive business will be better.