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Exploring The Evolving Landscape of Dermocosmetics

12/7/2021
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Skin health and wellness, magnified by preventative health concerns, underline growing demand for dermocosmetics

Within the past decade, consumer focus has shifted from the basic concepts of aesthetic beauty to the broader idea of skin health. Wellness, which consumers are increasingly seeking to achieve in their nutritional, physical, and lifestyle habits, is helping to generate demand for dermocosmetics. The latter is designed to promote health and beauty of skin and hair by combining properties of cosmetics products (including but not limited to cleansing, moisturising, beautifying) and those of dermatological products (treating skin and/or scalp concerns). These therapeutic-positioned products are suitable for sensitive skin and claim to offer relief, healing or treatment of specific skin and scalp concerns, such as acne, redness, eczema, hair loss, seborrheic dermatitis, as well as products that can improve health and appearance of skin and scalp.

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As an increasing number of consumers globally seek a “back to basics” approach to beauty that relies on scientific claims and underscores healthy living trends, dermocosmetics has experienced notable growth, due to its association with safety, efficacy and transparency. In fact, since 2019, the performance by dermocosmetics within hair care and skin care has exceeded growth of both categories overall. The changing epidemiology of pandemic-induced skin conditions has accelerated demand, due to consumers’ increased hygiene habits and preventative health behaviour, supporting the category’s 5% growth on a global level in 2020. Disposable incomes, which traditionally might have been allocated to leisure, travel and other categories, were limited by the pandemic, giving consumers additional funds, and helping them to enter the dermocosmetics segment or upgrade to premium brands.

Broad appeal integral to dermocosmetics’ positioning due to emphasis on solutions

Based on data derived from Euromonitor International's Voice of the Consumer: Beauty Survey, between 20% and 25% of global respondents reported using dermocosmetics in 2020, a marginal improvement on 2019’s figures. Dermocosmetics’ usage among both genders rose from 2019 to 2020, underlining the popularity of the segment overall. As the positioning by brands of dermocosmetics tends to be genderless, the products are sought by any consumer looking for therapeutic benefits to resolve acne, sensitive skin and hormonal changes, as well as skin and hair health. This underscores the importance of wellness trends.

Younger consumers (ages 15-29) are eager to use dermocosmetics but sometimes lack purchasing power, in which case, brands should ensure that their messaging is easily understood by both users and purchase decision makers (such as parents of teenagers). Consumers of dermocosmetics also tend to be digitally savvy, more likely to purchase premium beauty products, and maintain extensive routines—all of which provide a strong base for the segment to expand through beauty personalisation tech and omnichannel distribution

Dermocosmetics has benefited from recent consumption migration; consumers who are reducing their premium beauty spending are migrating to dermocosmetics, while those who demand efficacy and safety are trading up from mass beauty. Although premium dermocosmetics comprises a larger share than the mass segment, the latter witnessed faster growth than premium in 2020. This is the result of a drop in discretionary spending in 2021 and the rising cost of goods globally, creating less financial leeway for consumers to risk purchasing products that do not work as intended. The mass segment, in particular, has gained renewed popularity through social media, which is a vital source of skin care research for millennials and Generation Z consumers. For example, CeraVe, a 15 year-old brand, has regained popularity amongst the younger generation through collaborations with KOLs (key opinion leaders) and influencers on TikTok.

The microbiome space remains one of the most actively explored niche areas of dermocosmetics, which continues to improve quality, technology and therapeutic positionings. Dermocosmetics’ microbiome opportunities are strongest in anti-agers, acne treatments and postbiotics. Further studies through a personalisation approach with a formulation of appropriate strains will make the concept more credible. However, larger strides made by the category are dependent on regulatory standards of microbiome products, which are continually changing.

Future outlook

As we close out the year, the overarching question remains whether the high growth witnessed by dermocosmetics in 2020 and 2021 can be sustained heading into the forecast period. On the one hand, the preventative health factors that the pandemic has magnified, which increased demand for dermocosmetics, may subside, leading to a levelling off of the category. On the other hand, dermocosmetics is part of a wellness proposition, a megatrend that permeated the pre-pandemic zeitgeist of beauty and personal care and one that will be long-lasting, beyond the effects of COVID-19. Regardless, dermocosmetics players should continue to leverage their strengths to continue to grow: digitalisation (through virtual consultations, telehealth visits, health apps, personalisation capabilities), omnichannel distribution, and a focus on claims that strengthen the segment's science-backing positioning and credibility.

For further insight, take a look at the brief, here.

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