The size of the worldwide cosmetics market was USD 277.67 billion in 2020, and it is anticipated to increase at a CAGR of 5.0% between 2021 and 2028, rising from USD 287.94 billion in 2021 to USD 415.29 billion in 2028. The demand and growth of global cosmetic market, which will recover to pre-pandemic levels after the pandemic is ended, is what caused the CAGR to increase. The impact of COVID-19 on the world has been unprecedented and astounding, and the epidemic has had a detrimental effect on the demand for cosmetics in every region. According to the data, the worldwide market saw a growth rate that was lower in 2020—-10.57%—than it had been on average between 2017 and 2019.
Because they may improve a person’s entire look and have a beneficial effect on personality, cosmetics items have evolved into necessities in life. A small number of international businesses have been in charge of the production of such things. In order to meet the specific needs of the end-user, they provide a wide range of goods, such as those for the care of the face, hair, and lips, among others. Additionally, customers are being drawn to the growing number of anti-aging product launches, as well as the creation of practical and inventive package designs and small, portable containers. Each person has a unique hair type, skin tone, eye color, and lip shape.
As a result, producers are putting more effort into creating and maintaining a broad range of products that may satisfy each person’s unique needs.
Product sales decreased as a result of store closures
The COVID-19 scandal has shocked the cosmetics sector and caused a sharp decrease in demand for cosmetics. Additionally, the rigorous lockdown and extensive store closures in the first half of 2020 drastically altered consumer purchase patterns throughout the beauty and personal care sectors.
According to news reported by Estee Lauder Companies Inc. in April 2020, most retail locations run by the company or its clients had to be shut down as of mid-March 2020 across all of its operating regions, including the Americas, Europe, the Middle East, and Africa. The same source claims that stringent limits on travel, especially air travel, had a detrimental impact on the company’s travel retail operation. However, the business made an effort to contribute to COVID-19 relief efforts by donating money and goods. Due to the increased demand, Estée Lauder’s production facility in Whitman, UK, began to produce hand sanitizers under the Jo Malone London and Estée Lauder brands for use by employees and front-line personnel.
Because of the closing of retail stores, there was a quick transition to online channels, which gave manufacturers room to flourish. According to L’Oréal’s 2020 annual results, which were released in February 2021, the company’s e-commerce sales climbed by 62% across all divisions and geographies, making up around 26.6% of the overall company’s sales for 2020.
As a result, companies in the cosmetics industry are seeking to optimize their supply chains during the epidemic and concentrate on boosting online sales. The opening of offline stores, on the other hand, would increase product sales in the near future.
A number of market participants are starting digital marketing campaigns, creating interactive commercials, and exerting significant effort to promote their products through social media, which is likely to increase consumer demand for the product. Consumers are drawn to e-commerce to purchase personal care items due to the growing influence of social media and expanding internet usage. For instance, Grupo Boticário, a Brazilian manufacturer of cosmetics, declared in August 2019 that it intended to buy Beleza na Web, an online store that would enable it to sell its goods. To satisfy customer demand, producers are concentrating on providing a wide range of items through an online channel.
Due to a hectic schedule, changes in routine, eating habits, and variations in the sleep cycle, concerns about one’s body and well-being are rising every day. A person can seem healthier and more appealing by using beauty items to improve the quality, cleanliness, and beauty of their exterior body parts. These are some of the elements that led to a flourishing demand for products from both young and old people. The rising popularity of sun care items, night creams for skin restoration, revitalizing scents, and hair dyes, among other items, is also anticipated to increase product demand.
In fact, the number of people applying sunscreen year-round in Canada climbed from 17% in 2015 to 26% in 2018, according to the Canadian Dermatology Association’s “Sun Safe Behaviour Survey 2018.”
Additionally, in order to expand their consumer base, manufacturers are emphasizing the introduction of personalization and digitization in cosmetic items. For instance, the L’Occitane Group introduced its ‘Duolab’ personalized skincare system in February 2020. This system includes a countertop gadget that uses artificial intelligence. When necessary, this gadget can detect a person’s skin condition and then deliver a personalized face care treatment in the form of freshly mixed cream.
Therefore, it is anticipated that the expansion of the cosmetics sector in the next years would be supported by increasing awareness of grooming together with technical improvements.
Adoption of Eco-Friendly Cosmetics Will Boost the Market
Due to their safety and lack of toxicity, products made with organically derived chemicals are becoming more and more popular worldwide. Due to public awareness of sustainability development, there will likely be a rise in the demand for eco-friendly items in the near future. This is due to growing consumer knowledge of the harmful effects of synthetic chemicals on human health and the environment. For instance, the organic personal care industry in the United Kingdom expanded at a pace of 7% in 2018, according to the Soil Association Certification study titled “Organic Beauty and Wellbeing Market.”
Additionally, goods without any ingredients originating from animals are becoming more and more popular with consumers. In order to draw in more customers and lower their carbon footprint, manufacturers also concentrate on offering sustainable packaging alternatives, such as paper-based, biodegradable, and refillable packaging choices.
Reasons for Restraint
Growing Concern over Side Effects and Easy Access to Surgical Options as a Growth Suppressor
Preservatives, pigment molecules, and other synthetic compounds included in cosmetic items, as well as other additives, can have harmful side effects on the body, including allergic responses, the development of black spots, acne, or discoloration. This can be ascribed to the body’s ongoing accumulation of hazardous substances through repeated exposure to these items. These considerations are also causing consumers to favor cosmetic procedures that may permanently improve their look and enable them to stop using beauty products on a regular basis. Therefore, it is anticipated that growing consumer knowledge of the negative effects of cosmetic goods would limit the expansion of the cosmetics business.
Skin Care Sector Dominated as a result of their widespread use
The market is divided into categories for hair care, skincare, cosmetics, and other products. Given that more people use skincare products every day than hair care products, skincare is predicted to hold a sizable portion of the market. For instance, 80% of American consumers spend more than $100 a month on skincare products, according to the “Consumer Survey on Cosmetic Dermatologic Procedures 2018” study by the American Society for Dermatologic Surgery (ASDS).
Numerous items are used in hair care, including shampoo, hair dye, oil, serum, and others. The younger generation is more in need of these products since they increase the texture of hair strands while also nourishing the hair roots. Face powders, blush, mascara, and lipstick are examples of makeup items that further the appearance. It is anticipated that new color palettes and cost-effective cosmetic items for the general public will fuel market expansion.
The other category consists of goods for oral care, hygiene, and aroma. Additionally, the demand for such goods, such as perfumes, teeth-whitening treatments, and breath fresheners, is rising internationally as a result of rising hygiene awareness, which is fueling the segment’s expansion.
By Gender Analysis
Increasing Demand from People and Working Women the Women’s Section
Female end customers are more significantly impacted by beauty goods. Younger people and professional women are more interested in beauty care options. Therefore, a rise in the number of working women throughout the world is anticipated to increase product demand and promote market expansion. For instance, according to figures given by the Australian Government in February 2020, women had a share of around 47% of all Australians who were working in 2019.
Globally, there is a growing awareness of men’s grooming, which is driving up product demand. For instance, according to a poll done by The Bluebeards Revenge in the U.K. in 2018, 52% of the men asked said that they would be willing to pay more in the upcoming year for grooming items.
Because so many products are available under one roof, hypermarkets and supermarkets will dominate this industry
In terms of distribution channels, the market is divided into hypermarkets/supermarkets, specialty shops, internet channels, and others. Due to the availability of a large variety of items from numerous cosmetic brands under one roof, the hypermarkets and supermarkets segment occupies a significant stake in the worldwide market; bulk shopping from these stores gives various discounts and incentives. As a result, the category grew as a result.
Products from beauty brands, whose availability is typically limited, are included in specialty retailers’ product offerings. The simplicity and convenience of online shopping are expected to cause the online retailers category to expand significantly. Additionally, customers may save time by shopping at offline stores by using online retailers’ free home delivery, bulk purchase discounts, and gift vouchers.
Due to developing economies like China and India, the Asia Pacific region is predicted to have a sizeable USD 102.55 billion in 2020. This is a result of a variety of causes, including rising urbanization and living standards as well as an increase in the number of working women, all of which feed the demand for the product. For instance, the number of cosmetics manufactured went from 434 thousand tonnes in 2017 to 455 thousand tonnes in 2018, according to information provided by the Japanese Ministry of Economy, Trade, and Industry in 2019.
According to the book Beyond, which was released by the Association for Asian Studies in 2018, the middle class made up between 5% and 10% of India’s population in 2005 and is projected to reach 90% by 2039.
Due to the population’s growing purchasing power and rising demand for luxury and premium goods, the market in North America has experienced favorable development. Additionally, one of the key factors driving the market’s expansion throughout the projection period is the region’s expanding number of beauty product retailers. For instance, one of the biggest cosmetics retailers in the United States, Sephora, revealed its development plans in February 2020, involving the establishment of around 100 additional locations throughout the continent of North America.
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Leading companies in the beauty and personal care sectors, such as L’Oréal, Beiersdorf AG, Unilever, and others, dominate the European market. Additionally, factors including an increase in beauty salons and a rise in the number of millennials and Generation Z in the area are anticipated to fuel demand for a variety of cosmetic items. For instance, between 2013 and 2018, the market for skin and face care products grew on average by 2.7% annually, while the market for decorative cosmetics grew on average by 4.1% annually, according to the German Cosmetic, Toiletry, Perfumery and Detergent Association’s Annual Report 2018-2019.
In comparison to other areas, South America, the Middle East, and Africa are anticipated to have a smaller market share. However, greater disposable income, improved access to imports, and an increase in the number of reasonably priced goods are anticipated to fuel market expansion in these areas.
The market research study offers a thorough analysis of the worldwide cosmetics industry and puts a special emphasis on important factors including top businesses, product categories, and distribution methods. In addition, the study analyses significant industry advancements and provides insights into market trends. The study includes a number of reasons in addition to those that were already discussed that have helped the worldwide market expand in recent years.