Did I get you with that title? Well, I tried; I tried to imitate news headlines. Yeah, guys, you read that right. A few days back, my buddies and I hit up our usual spot outside college to have our evening tea. It was drizzling, so we ordered some samosas (because what’s better than chai and samosas in the rain, right?).
There was a Dainik Bhaskar’s 12th June Udaipur edition lying on the table. With a samosa in one hand, I picked up this newspaper, and suddenly, my eyes locked on an article that said, “Economists are getting worried about an increase in lipstick sales.” I was like, wait, what is this? These days, newspapers are also going the YouTubers’ way of attracting viewers with clickbait titles. But yeah, not gonna lie; this article was the perfect thing to read with evening tea, so I gave in and went through it.
This got me super intrigued, so after getting back to my room, I went down the rabbit hole of internet research. You know how it is – one moment, you’re reading an article, and the next, you’ve got 15 tabs open. As a newbie MBA student with economics as one subject, I’m all about concepts being taught with interesting anecdotes or real-life examples. It makes the whole thing way more relatable. Anyway, I discovered there’s one more index called the “underwear index,” and it also gives us some clues about the economy’s current status.
Lipstick Index: What Women Do
The Lipstick Index was coined by Leonard Lauder, chairman of Estée Lauder, during the early 2000s recession. The idea is simple: during economic downturns, women tend to indulge in small luxuries, like lipstick, instead of big-ticket items like clothes or shoes.
So, when lipstick sales are up, it might indicate that the economy is down. It’s a fascinating way to look at consumer behavior. While it’s not an exact science, it gives an exciting glimpse into how spending habits can reflect more significant economic trends.
Imagine this – you’re cutting back on major expenses but still want to treat yourself, so what do you do? You buy a nice lipstick. It’s affordable, it makes you feel good, and it’s a small way to add a bit of joy to your life. This little act of self-care can actually signal that people are feeling the pinch financially.
Underwear Index: What Men Do
On the flip side, we have the Underwear Index, popularised by former Federal Reserve Chairman Alan Greenspan. This theory suggests that men’s underwear sales are pretty steady in normal economic times.
However, during a recession, sales tend to drop because men avoid spending on what they consider a non-essential item. Underwear is the last thing men stop buying, so if those sales decline, it might be a sign that the economy is really in trouble.
Men might skip buying new underwear during tough times because no one sees it, and it’s a way to save a bit of money. This decrease in sales can be an indicator that economic conditions are tightening. Again, it’s not a perfect measure, but it provides an intriguing peek into how consumer priorities shift during financial strain.
What’s Going on in India?
Now, let’s bring this back to India in 2024. According to recent market reports, lipstick sales have seen a noticeable uptick this year. This is partly attributed to more women entering the workforce and seeking affordable ways to enhance their professional appearance, as well as a general post-pandemic desire to indulge in small luxuries.
On the other hand, the underwear market has experienced a bit of a slump. With inflation and rising costs of living, many men are tightening their belts (pun intended) and postponing the purchase of new underwear. These trends could be signalling that while people are looking for small ways to boost their spirits, they’re also being cautious with their spending in other areas.
Wrapping Up
While these indices aren’t flawless economic indicators, they do offer a quirky and insightful way to understand consumer behaviour and economic conditions.
And let’s hope our job prospects aren’t tied to lipstick or underwear sales. Imagine telling your future boss that you knew you’d get the job because underwear sales were down! Whether the economy is booming or busting, let’s keep ourselves ready and maybe stock up on a few extra lipsticks and pairs of underwear for good luck. After all, you never know what might give you that extra edge! That perfect shade of lipstick or those lucky boxers might just be the secret to acing that dream interview!
I usually geek out on business, tech, sports, films, and a good dose of humor. I enjoy turning complex ideas into something simple and fun.
Let’s connect on LinkedIn and chat (or share some memes!)
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Currently figuring out MBA student life at IIM Udaipur.
I usually geek out on business, tech, sports, films, and a good dose of humor. I enjoy turning complex ideas into something simple and fun.
Let’s connect on LinkedIn and chat (or share some memes!)
