Enjoy a 10% discount when you use the code EQLYSEP23 at checkout from the 20th to the 30th of September 2023

Health and Beauty We examine the trends underlying the growth of the global marketplace in health, beauty and hygiene. Our analysts will point the way forward by highlighting critical innovations and behaviours that are driving industry evolution.

Private Label Meets Consumer Needs for Budget-Friendly Beauty

Emilie  Hood Profile Picture
Emilie Hood Bio

Recent inflationary pressures are encouraging beauty consumers to seek alternatives amid rising costs of living. Private label is emerging as a clear winner in the competition to balance consumer needs for efficacy and affordability within beauty and personal care.

Private label benefits during times of economic crisis

Private label has historically performed well in times of economic uncertainty - such as in the 2008-2009 global financial crisis - behaviour that is being repeated during the current cost-of-living crisis. Consumers are looking to save money through non-branded products where they place a greater value on function over names. As the financial pressures on consumers continue, this growth is developing across other categories where private label shares were relatively small.

Private label growth in 2022 is most pronounced in personal care

Personal care has noted the most consistent growth for private label since 2019, with bath and shower achieving the highest growth of any other category in 2022. This was also evident throughout oral care, baby and child specific products and sun care during the year.

Private label’s penetration of beauty-centric has also grown, driven by consumers trading down from brand names. Although private label’s growth was modest in skin care, the high product variety suggests greater potential in Western Europe and high growth from a small base in Asia Pacific.

In hair care, private label's double-digit growth since 2019 is above the average in the category, indicating consumers are converting from branded competitors

Source: Euromonitor International

Price increases are encouraging consumers to turn to private label

Private label is a popular choice for consumers looking to trade down. Euromonitor International has identified a greater willingness to purchase private label and low-cost products among all generation groups in 2023.Budget-Friendly Beauty chart1.svg

Price increases by competitors are providing opportunities for private label players to gain share, as the greater control the latter have over supply chains and simplified distribution models, the more they are able to maintain their accessible price without sacrificing profits. In a move to offer more affordable products and capitalise on ingredient-led beauty, Boots launched its private label line, Ingredients, which comprises of similar products focusing on single ingredients. This line competes closely with Estee Lauder Cos Inc’s The Ordinary - which in early 2023, announced an increase in price, citing rising costs. Boots Ingredients products are on average now 13% cheaper than The Ordinary’s alternatives. This example demonstrates the ability of private label to undercut competitors through their ability to control pricing.

“Dupe” culture grows among younger generations, boosting private label

Many retailers in the US and the UK that offer private label are launching “dupes” specifically designed to replicate premium products, thereby balancing consumers’ needs for affordability and premium features. Lacura, for grocery retailer Aldi, has launched budget alternatives to prestige brands with similar formulations and ingredients at more affordable price points. Its Caviar Day Cream amounts to just a fraction of the price of La Prairie Skin Caviar.Budget-Friendly Beauty chart2.svgConsumer habits and financial constraints are driving private label in beauty, particularly among Generation Z. Social media platforms, including TikTok, have helped expedite the popularity of dupes in beauty, gamifying the search for consumers of all income tiers. Euromonitor International’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2022 (n=39,832) found that 37% of consumers with an annual disposable income of USD150,000 prioritised finding a bargain. 

37% of consumers with an annual disposable income of USD150,000 prioritised finding a bargain

Source: Euromonitor International

Videos on the platform discuss the similarities between premium and private label products with presentations on Primark beauty and Superdrug beauty dupes amassing 241,000 and 228,000 likes, respectively.

What does the future of private label look like in the long term?

With the effects of economic uncertainty set to continue in 2023 and beyond, private label holds a newfound appeal to premium beauty and personal care consumers.

Private label can further expand by developing and promoting premium attributes while managing pricing agility

Source: Euromonitor International

Retailers should be wary of the legal risks or brand dilution of solely following leading names or focusing on duplication.

Once inflation wanes and consumer pricing sensitivity subsides, will private label have demonstrated efficacy and built long-term consumer loyalty, or will consumers trade up and revert to private label in more limited situations? Euromonitor International is leaning towards the former, given that consumer-driven data show private label is more closely competing with branded products, but only time will tell.

Read our article Inflationary Pressures Encourage Beauty Consumers to Seek Alternatives for further analysis on consumer pressure as a result of inflation.

Learn more about inflation in our report, Beauty Inflation Surge: Tackling Margin Pressures and Uncertainty, to understand how consumers and beauty players are overcoming this challenge.



Interested in more insights? Subscribe to our content

Explore More

Shop Our Reports

A Clean Evolution: Redefining Value and Priorities in Disposable Wet Wipes

The disposable wet wipes space is undergoing a clean evolution, as approaches to cleaning evolve against the backdrop of inflation, urbanisation and…

View Report

Ingredient-Led Beauty

Amid high-profile lawsuits and recalls, ingredient-led beauty is propelled by consumers’ quest to control their health. Awareness is rising among all beauty…

View Report

Global Inflation Tracker: Q3 2023

This report examines inflation levels and drivers globally and in key countries. Global inflation is moderating, although divergence among the key economies…

View Report
Related Content Inflationary Pressures Encourage Beauty Consumers to Seek Alternatives Learn More
Related Content Beauty Inflation Surge: Tackling Margin Pressures and Uncertainty Learn More