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.
This report comes in PPT.
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.
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.
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 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.
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.See All of Our Definitions
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