TAGS: Sustainability / Natural Cosmetics Decorative Cosmetic Skin Care Hair Care
According to Grand View Research, the global beauty and personal care products market size was estimated at USD 518.56 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 7.7% from 2023 to 2030.
One of the primary factors driving market expansion is the rising consciousness of consumers about their appearance. Beauty and personal care products such as skin care, color cosmetics, and hair care are becoming an integral part of daily grooming among millennials.
The introduction of cosmetics with natural, non-toxic, and organic ingredients has also been boosting market growth.
Factors Driving Market Expansion
The easy availability of these cosmetic items through various sales channels such as specialty stores, pharmacies, and beauty salons has contributed to the growth of the market in terms of value sales. In addition, the increasing focus of male consumers on skin care and grooming to enhance their physical appearance and take better care of their skin is anticipated to offer strong opportunities for growth. Increasing investments in the research and development of new and effective offerings also bode well for market growth.
Rising consumer awareness about using cosmetics that are
vegan, organic, natural, and, at the same time, good for the planet has encouraged manufacturers to launch new offerings and expand their footprint. For instance, in June 2021, SO'BiO étic, a socially responsible French beauty company, launched its organic beauty line in the U.S., to supply eco-friendly and healthy beauty items. The company’s products do not contain glycol,
parabens, silicones, nanoparticles,
PEG, or chemical filters.
Various chemicals used as ingredients in beauty and personal care products can have adverse side effects on the skin. Similarly, long-term and extensive use of hair care commodities containing harsh chemicals can lead to numerous hair problems such as hair fall, premature greying, and dry and lackluster hair. Growing consumer awareness regarding the probable side effects of using such products is one of the major factors limiting the growth of conventional beauty and personal care products.
Consumer trends have been shaping the market for beauty and personal care products over the years. Ongoing trends influencing the market include sustainability, natural and organic ingredients, health, and convenience. The growing consumer preference for natural, organic, vegan beauty and personal care products to avoid the harmful effects of synthetic and rough chemicals is boosting the market growth. Consumers are replacing conventional beauty and personal care products with clean labeled and environment-friendly products.
The primary consumer demographic propelling the trend is composed of Millennials and Gen Z, who exhibit heightened enthusiasm for organic and natural beauty products in comparison to the general consumer base. According to a blog by ESW in July 2022, within this age group, 43% of consumers express a preference for natural skincare, surpassing 31% of the overall consumer population in the U.S.
The COVID-19 pandemic has also had a significant impact on the growth of the market. The pandemic disrupted the production as well as supply of beauty and personal care items. The situation was exacerbated by strict restrictions on movement, as well as social distancing and stay-home policies. Demand for new orders from retailers came to a standstill as major markets were under lockdown and commodity sales took a major hit, both through online and offline channels.
Type Insights
The conventional beauty and personal care segment accounted for the largest revenue share of 84.8% in 2022. Low prices of the conventional type compared to organic variants and their easy availability through various distribution channels across the globe have driven segment growth so far. However, conventional cosmetics frequently contain a high percentage of petroleum-based ingredients, which is not only harmful to the skin when not properly refined but also required extensive mining, which can endanger wildlife and soils. This could hamper segment growth.
The organic segment, on the other hand, is anticipated to witness strong growth over the forecast period. These cosmetics are formulated by using organically sourced ingredients and are safe for the skin,
cruelty-free, and aid in the protection of the environment and biodiversity. Rising consumer awareness regarding the benefits associated with the use of organic cosmetics is expected to drive its adoption among consumers globally. This, in addition to a rising number of players offering clean and organic beauty and personal care products, is likely to boost the segment over the forecast period.
Product Insights
The skin care segment accounted for a revenue share of 33.6% of the beauty and personal care products market in 2022. This is attributable to the rising popularity of cosmetics containing natural and organic ingredients such as herbs,
plant extracts, and
fruit extracts. Skin care products can have numerous benefits and functions, such as rejuvenating and protecting the skin,
treating wrinkles and
signs of aging, reducing the occurrence of acne,
lightening spots, and keeping the skin healthy and young. These benefits continue to propel the growth of the skincare segment.
The hair care segment is expected to register a CAGR of over 7.9% during the forecast period.
Hair care products are used to solve various hair problems like frizzy hair, split ends, hair fall, dandruff, and dry or itchy scalp. The
availability of a wide range of hair care products, such as shampoo, conditioner, hair gel, hair wax, hair serum, hair oil, and hair colorants, in different formats and for various customer requirements will drive segment growth over the forecast period.
Distribution Channel Insights
The specialty stores segment held the largest revenue share of 35.6% in 2022, driven by the growing presence of such stores around the globe. These stores have been focusing on offering natural and chemical-free beauty and personal care products to pique customer interest and allow them to choose from numerous brands and variants before making a purchase. Additionally, the presence of store associates that help customers select the right cosmetics for their needs and provide adequate knowledge about the ingredients has been boosting the growth of this segment.
Supermarkets and hypermarkets have become popular for the purchase of beauty and personal care products as they offer a wide range of items under a single roof and are located near residential areas for convenient and easy accessibility. The e-commerce channel, on the other hand, is projected to register the fastest CAGR from 2023 to 2030. Rising internet penetration and target marketing by companies to reach a wider audience has fueled segment growth. In addition, heavy discounts and offers provided by online platforms will boost the sale of beauty and personal care items through this segment.
Regional Insights
Asia Pacific held the dominant revenue share of 39.2% in 2022 and is also expected to exhibit the fastest growth over the forecast period. This is attributable to the rising number of working women in countries such as China and India and their growing interest and spending capacity for beauty and personal care products. Moreover, the rising young population in these countries with access to the Internet is expected to offer immense opportunities for the growth of the regional market over the forecast years.
The growth of the Europe market for beauty and personal care products is fueled by the growing inclination of consumers toward natural and vegan cosmetics, especially in the UK, France, and Germany. In North America, consumers are willing to pay a high price for cosmetics that enhance their physical appearance, and this is especially true for consumers in the U.S. and Canada. The higher spending power of consumers in these regions and the presence of leading players will drive the regional markets.
Canada is expected to grow at a CAGR of 8.6% from 2023 to 2030. According to the International Trade Administration, the recovery of the beauty and personal care industry in Canada presents a significant opportunity for cosmetic product exporters from the U.S. The growing desire for natural or organic, cruelty-free, and non-animal-tested cosmetic products is an ongoing product trend in beauty products.
Due to consumer preferences, the Canadian skin care market now comprises about 40% of organic and ethically derived goods. Emerging market trends have fostered the expansion of cosmetic items in Canada. In addition to using technology to improve marketing methods, this includes producing products to appeal to the age, gender, and ethnicity of consumers. The popularity of beauty products has also been aided by the use of innovative, environmentally friendly packaging and design.
Source: Grand View Research
