- Overview of the global beauty industry
- A look into newer products and technology that have hit the beauty market
- Trends to look for, going ahead in the industry
The global cosmetic product market, which is currently valued at USD 532.43 billion (as of 2017), is growing rapidly and is expected to reach a market value of USD 805.61 billion by 2023, registering a CAGR of 7.14% between 2017-2023. This will be propelled by the changing appetite of consumers’ for innovative and new skincare products. Moreover, it is a fact that the consumers are becoming more aware and conscious of their personal requirements, which has pushed the growth of the industry.
In the contemporary world, beauty and technology are increasingly blending together. On the product side, celebrity beauty product lines have changed the conversation of inclusive beauty across the industry for better. Furthermore, clean and natural beauty products intertwined with health and wellness for both female and males have become a requirement for choosing a beauty product. Direct-to-consumer beauty brands lead the pact with new trending products. Few of the big direct-to-consumer brands that have made a mark in the present market include Glossier, Everlane and Bonobos. That is not to say that these start-ups have killed the traditional brick-and-mortar stores, but, on the contrary, these are revitalizing them by putting their own spin to these physical stores.
K-beauty (Korean-beauty); known for its highly advanced ingredients and formulation, hit the global scene big time, around 2011 when Sephora began having the K-beauty products on its shelves. Ever since other brick-and-mortar retailers like Walmart and Target have started selling K-beauty products, including e-commerce platforms. While K-beauty is still highly in demanded, Japan of late has garnered a lot of attention for their beauty products. The nation has very strict regulations and the country’s Ministry of Health, Labour and welfare only recently authorised its first product to be labelled as ‘anti-wrinkle’. Further, some Japanese beauty brands that are gaining prominence include luxury beauty brand Tatcha, SK-II and DHC.
In addition, there has been a big time rise in male as well as gender-neutral beauty products. These gender-neutral products are the new male-focused beauty products, with companies like ASOS, Calvin Klein, Yves Saint Laurent, Clinique and other noted brands offering make-up for men, while start-ups like Context and incumbent brands including the likes of MAC, Tom Ford and Marc Jacobs have also launched gender neutral make-up lines. In order to catch up with this trend, brands such as Maybelline and Covergirl have also announced male brand ambassadors. Male grooming companies and hair loss are the leading categories.
While on the technology side, the beauty space is also no exception when it comes to technology that is revolutionising the industry. In the recent past, major beauty brands invested in technology like augmented reality for a better experience in customising beauty products and experiences. The beauty brands are increasing their partnerships with tech giants such as Google, Amazon, Facebook and Apple for driving sales through these platforms. These big tech giants are curating beauty shopping experiences through data on consumer preferences. Few of the notable new technologies that have entered and are re-defining the beauty and cosmetic world are detailed in the below table.
Social media platform has also played a very pivotal role in the growing prominence of the newly found independent direct-to-consumer brands and the well-established beauty brands for re-defining their presence. Of all the media and tech channels, YouTube’s beauty universe has gained enormous traction over the years with over 222 billion views and has become one of the top platforms for beauty related videos. In 2018, there was on an average of more than one million views on beauty related videos on YouTube per day.
While 2017 saw the retail space struggle, but the beauty industry thrived and saw major investments in augmented reality with an overall increase in the industry for a push towards technology backed beauty industry. Direct-to-consumer brands saw the largest number of deals (2017) across the beauty industry. The newer start-ups are pushing forward new beauty trends, but when it comes to sale numbers, the market is still largely owned by a handful of big companies. Beauty is one of the few spaces where the multi-brand retailers are still successful.
Alongside all this, some of the independent brands are also making waves in the current beauty market as they have captured the industry in recent times and are continuing to grow with their ever-increasing innovative product-line and enhancing customer acceptance.
Going forward, we can expect to see more and newer kind of inclusive integration between beauty and technology for delivery of more customised and personalised shopping experience when choosing a beauty product as the beauty industry becomes more tech-enabled. The use of digital technology will become more sophisticated as artificial intelligence and augmented reality enters the mainstream. Premiumization by brands on their products will also drive standards across all segments of the beauty industry. Beyond these major industry trends in the beauty industry, consumers are seeking greater health benefits and sustainability in their cosmetics similar to what consumers expect from their food. Thereby, influencing the buying behaviour of consumers based on the same aspect. Additionally, the beauty industry is witnessing more regulatory scrutiny amid increased ‘greenwashing’ across space (where brands claim their products to be organic and natural when it may not be the case) and a larger number of consumers are seeking transparency when it comes to beauty products.