Competitor Strategies in Beauty and Personal Care

December 2022

2022 saw the beauty market recover, as pent-up demand was released. The outlook is, however, still challenging. With inflation-driven rises in the cost of living, leading to more careful consumption, discretionary spending on beauty and personal care is being squeezed. Consumers' value perception is shifting to simplicity and accessibility. Brands are exploring digitalisation and phygital reality technologies to create premium and personalised experiences, to maintain customer loyalty.

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This report comes in PPT.

Key Findings

Bounce back in demand for premium beauty and personal care from pandemic contributes to growth

L'Oréal retained its leading global position in 2021, while Estée Lauder continues to gain value share from its premium portfolio. LVMH’s momentum in 2021 stemmed from pent-up demand for luxury goods, as spending power returned post-pandemic, while Procter & Gamble has established a Specialty Beauty division that will focus on premium channels.

Changes in post-pandemic economy give rise to new priorities among beauty consumers

The global outlook remains challenging, with rising inflation that threatens consumer confidence and post-COVID-19 gains. Consumers’ perception of value is being redefined amid a shift towards simplicity and accessibility. Beauty players should be attentive to selective spending on higher quality items that project longevity, concentrated formulations that result in less frequent replenishment, multifunctionality and science-backed credentials.

Beauty players increase exposure in virtual world and digital engagement to generate a more premium experience

With the world entering a new phase of digital reality, the rise of the Metaverse has created a new territory to explore for the beauty industry, which many large players have leveraged. Using technologies to provide customers with accurate product recommendations and customisation is an area that brands have been quick to enter, while some players in Asia Pacific are exploring 3D printing technology.

Personalisation has evolved from being a nice-to-have to a necessity across industries

Personalisation investment is coming from all tiers of players; however, the closure of personalisation initiatives from Beiersdorf and Shiseido casts doubt on the long-term viability of bespoke formulations. Some players in hair care have been able to bring mass customisation to scale successfully. A safer route for expansion is diagnostic personalisation, since beauty is leading the way with AI technology and product curation to relieve consumers of guesswork.

Key findings
Companies at a glance
Prestige beauty and personal care portfolios provide growth momentum
Bounce back in demand for premium portfolios from pandemic contributes to growth
Emerging and developing markets continues to lead growth, but it has slowed
Shiseido to restructure to focus on high-growth categories, while L’Oréal maintains lead
Beiersdorf and Natura&Co heavily dependent on top three brands, while Unilever diversifies
Half of the top 10 beauty players are expected to see their ranking change by 2026
Johnson & Johnson Inc leads body powder sales in Asia Pacific, overtaking Unilever in 2021
Changes in post-pandemic economy give rise to new priorities among beauty consumers
Seen as less elastic post-COVID-19, holistic wellness a key component in value creation
“Clean” concepts and ingredient-led beauty magnify efficacy and safety aspects
Luxury players tap into value creation through multifunctionality and limited editions
Skin health a major focus as companies invest through M&A and partnerships
Exposure in virtual world, innovative digital engagement add to a more premium experience
Brands enrich consumer experience in Metaverse
Cutting-edge digital tech nologies used for consumer engagement
Players use artificial intelligence in skin care and colour cosmetics customer journeys
Personalisation has evolved from being a nice-to-have to a necessity across industries
Luxury and emerging players capitalise on mass customisation
Beauty players use partnerships to capture more detail in diagnosis stage
Players incorporate personalisation to elevate the consumer journey in-store
Investment from both niche and multinational players, but doubts in long-term momentum
Key findings
Overview of Beauty Survey
Overview of Beauty Survey: Product coverage

Beauty and Personal Care

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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