The Q4 2022 update for beauty and personal care shows an upgrade for 2022 compared to estimates made in Q3 2022, but a downgrade from April 2022 baselines. China’s recent changes in zero-COVID policies foretell future optimism for the second largest beauty and personal care market. Inflation continues to generate shifts in consumption that will be felt in 2023. Skin health, personalisation, digital engagement, and value creation play key roles in H2 2022 business activity.
This report comes in PPT.
High commodity prices and supply chain disruptions caused by the war in Ukraine and shutdowns in China amid its zero-COVID policy continue to set the global economy on a course of slower growth and high inflation. As a result, the Q4 2022 update shows an upgrade for 2022 from Q3, but a notable downgrade compared to a more optimistic baseline projected in April 2022. China’s recent changes in zero-COVID policies foretell future optimism.
In 2022 and 2023, habit persistence will account for a notable segment of growth, particularly affecting hair care, skin care and fragrances—suggesting that consumers are sustaining their pandemic-induced routines. However, players in other categories where habit persistence is less of a driver (eg colour cosmetics and sun care) can leverage “skinified formulas” and anti-ageing benefits to overcome these challenges.
Although median online price changes indicate consumer price inflation is reaching a peak, tightening consumer spending, due to high inflation, rising costs of essential goods and energy, may chip away at post-COVID-19 gains in beauty and personal care. Survey results and pricing analysis suggest that the inflation impact varies across markets, categories and tiers. Opposing motivations (eg post-pandemic indulgence to spend more vs trading down to private label) suggest that the inflation impact is not a straightforward issue.
AmorePacific’s acquisition of Tata Harper, Church & Dwight Co Inc’s acquisition of Hero Cosmetics, and Kosé’s focus on personalisation highlight the continued attractiveness of clean beauty and wellness-positioned brands. Wellness and self-care will be top of mind as we move into Q4 2022 amid a backdrop of worsening macro, pricing, and supply chain conditions.
This is the aggregation of baby and child-specific products, bath & shower, deodorants, hair care, colour cosmetics, men's grooming, oral hygiene, fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.
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