Beauty & Personal Care Market: ECommerce & Clean Beauty Set Global Pace Beauty and personal care products are one of the fastest-growing consumer goods globally. This fast-paced growth is majorly attributed to the rising personal appearance and hygiene concerns, as well as rapid urbanization, specifically in emerging economies. According to Inkwood Research, the global beauty & personal care market is set to record a revenue of $750.53 billion with a CAGR of 3.13% during 2023-2032. The beauty and personal care industry is evolving with innovative trends each year, also taking into account unisex and men’s products. Trends are defined by factors that potentially change business dynamics. They center around urbanization, aging populations, natural disasters, pandemics, innovations associated with recent developments, etc. Taking these into consideration, here are the two key trends that define the global beauty & personal care market:
E-Commerce’s Strong Foothold
Digital transformation is no longer privy to beauty brands. The transformation process has enabled beauty brands to add an array of services that use virtual reality (VR), artificial intelligence (AI), and machine learning to offer a better shopping experience. These entail skin consultations, virtual-tryon, personalization, diagnosis, etc. Accordingly, the beauty industry is now considered a brimming ecommerce category with a loyal consumer base. As per McKinsey & Company, in-store shopping in most major beauty-industry markets accounted for around 85% of purchases before COVID-19. The further reduction of in-store traffic induced by the pandemic drastically changed consumer buying behavior, thereby accelerating the shift to online shopping. How Does E-Commerce Benefit the Beauty Industry? The role of e-commerce encompasses key features that offer direct advantages for businesses, facilitating the beauty industry’s vast presence in the e-commerce landscape. The leading features are: 1. Boosting Revenues The scope for catering to a global consumer base, from local businesses to multinational beauty brands, is enabled by the ever-growing reach of e-commerce. Also, beauty businesses can penetrate international markets without acquiring local property overseas or hiring an on-field team of managers to delegate operations with partial autonomy. Additionally, e-commerce’s userfriendliness worldwide allows for global expansion, significantly boosting revenues. 2. Technology Integration
The sale and purchase of beauty & personal care products majorly rely on the senses: smell, touch, and sight. This dependence is challenging for online retailers, with technology coming to their rescue. Technology has successfully recreated the in-store experience, enabling the ‘test’ of makeup products in a virtual environment before the purchase. Accordingly, the beauty industry has witnessed some of the most creative implementations of emerging technologies. For instance, augmented reality (AR) integration in the buying process. It helps acquire consumer data like facial contour mapping, skin texture, product choices, etc. In October 2019, the leading AR company, Perfect Corp (Taiwan), partnered with Jack Ma’s Alibaba Group (China), an e-commerce giant, to integrate its YouCam Makeup AR virtual try-on technology. This introduced new virtual tryouts to consumers in China. Moreover, Alibaba revealed that the integration increased their conversation rate by four times. Furthermore, in 2018, L’Oréal India bought ModiFace (Canada), an augmented reality firm, to offer virtual one-on-one beauty consultations through video chat and try-on for hair color and makeup. The company claims to have twice the engagement using AR tools. Such developments have created an embodied and safe experience for cosmetic stores on their e-commerce pages. 3. Consumer Data Access Beauty market markets and owners prioritize data for product development and target marketing. Consumer intel, like product preferences, demographics, frequency, expense cap, spending behavior, etc., is generated through directed questionnaires, past records, market surveys, and onboarding campaigns. This helps beauty brands offer highly-customized product offerings. Particularly, product personalization by virtue has the advantage of minimizing the number of purchase returns. As per our evaluations, e-commerce is the fastest-growing distribution channel in the global beauty & personal care market, expected to record a CAGR of 4.46% by 2030.
Clean Beauty: More than a Buzzword
There is an increasing inclination among consumers toward detoxification and wellness with regard to products and diet. As a result, consumers are making ‘clean’ and considered choices. Also, there is more awareness regarding the harm caused by synthetic ingredients in preservatives and fragrances, with product labels getting second and third glances. Further, the shifting consumer preferences and tastes can potentially encourage wider acceptance of currently under-represented product lines. For instance, the need for natural ingredients in products will continuously influence the demand for organic goods. Additionally, companies are making investments in R&D to keep up with such trends. As per our analysis, skin care is the largest revenue-generating product type, projected to garner a 23.40% revenue share by 2032. Much of this is attributed to the way consumers view skin care and beauty post-pandemic. The pandemic changed the way consumers view beauty and skincare. Consumers are more conscious about their skincare choices now than ever. With routines on hold during the pandemic, lifestyle choices were evaluated. People became more conscious about health, wellness, and the nature of what they consumed.
At the same time, they had the time window to assess the impact of their choices on the environment. This, in turn, resulted in opting for products free of parabens, sulfates, and other toxic ingredients. Subsequently, the niche demand for ‘toxin-free’ and ‘clean’ beauty & personal care products has become a mainstream trend, with D2C brands leveraging this opportunity. Such trends are estimated to redefine the global beauty & personal care market growth during the forecast period. FAQs:
Which is the leading country in the global beauty & personal care market? A: China is the leading country in the global beauty & personal care market.
Which is the fastest-growing product type in the global beauty & personal care market? A: Skin care is the fastest-growing product type in the global beauty & personal care market.