Strategy Briefing

E-commerce Acceleration in Beauty

Jan 2020

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

E-commerce beauty and personal care has grown the fastest of all channels globally and continues to gain share from store-based retailing. E-commerce acceleration is being driven by trending focus areas, such as online communities and personalisation technologies, while challenges such as internet access and sustainability concerns create opportunities for players to innovate and grow.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Key Findings

E-commerce registers rapid growth, but remains small vs other channels

E-commerce beauty and personal care is a US47.1 billion industry and has grown the fastest of all channels globally, but captures just 11% of all beauty and personal care sales as of 2018. E-commerce continues to gain share from store-based retailing, which in 2018 accounted for 80% of global beauty and personal care sales.

Skin care and colour cosmetics are leading contributors to growth

Key e-commerce categories are skin care and colour cosmetics. The boom in D2C brands, the impact of online influencers, and growing sophistication of beauty tech that provides product recommendations drive e-commerce skin care and colour cosmetics sales.

Opportunities to capitalise on beauty and personal care e-commerce exist in trending areas

Themes driving beauty and personal care e-commerce include exclusive collections and limited releases; expansion of consumer bases beyond target audience and using online as the conduit; online-only private label brands; vocal and highly-engaged online communities; beauty apps and super apps; augmented and virtual reality, artificial intelligence, voice; and personalisation technologies.

Varying challenges translate into market-specific solutions

The largest e-commerce challenges are internet penetration and banking access in emerging regions, while beauty-specific challenges include sensorial product limitations, packaging, and sustainability.

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Introduction

Scope

Key findings

E-commerce, A Strong Competitor in Beauty

E-commerce grows rapidly, but remains small versus other channels

Key beauty e-commerce regions are Asia Pacific and North America

Key e-commerce categories are skin care and colour cosmetics

Digital engagement is the second-most influential trend globally in 2019

Smartphones play a key role in e-commerce acceleration in beauty

Consumer-centric Strategies Bring Opportunities

Respondents cited e-commerce for largest gains, driven by these themes

Going beyond target audiences to drive engagement, purchases online

Exclusive collections bet on consumers’ desire for uniqueness

Personalisation is a point of differentiation for online beauty purchases

E-commerce is the default for DNA-driven personalisation , a rising trend

Brand-adjacent online communities strengthen consumer engagement…

…while presence on influencer-led online communities helps drive traffic

Beauty integration in apps drives momentum in China…

…but nascent in US and other markets with sizeable beauty e-commerce

Augmented/virtual reality, AI are tools used mainly by premium players

Voice search and commerce represent further frontiers of beauty

Online-only private label beauty demands for affordability and simplicity

Challenges are not Industry Specific

Beauty challenges include sensorial trials and experiences

Solutions available for packaging, but sustainability still an open question

Internet access presents challenges beyond beauty

Large unbanked population hinders e-commerce momentum

A Positive Outlook

Beauty e-commerce to grow robustly across all regions to 2023

Beauty e-commerce well developed in China, Japan and South Korea…

…but potential exists in India and Indonesia, especially in skin care

Skin care continues to be the biggest contributor to e-commerce…

…while colour cosmetics is key in Australasia, fragrances in Latin America

…alongside e-commerce growth in personal care in North America

Two approaches to leverage strengths of e-commerce in beauty

Omnichannel is the path of greatest opportunity

Omnichannel has proven success in North America

Appendix

Overview of Beauty Survey: product and brand coverage

Overview of Beauty Survey

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Megatrends

Strategy Briefing

E-commerce Acceleration in Beauty

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Key Findings

E-commerce registers rapid growth, but remains small vs other channels

Skin care and colour cosmetics are leading contributors to growth

Opportunities to capitalise on beauty and personal care e-commerce exist in trending areas

Varying challenges translate into market-specific solutions

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key findings

E-commerce, A Strong Competitor in Beauty

E-commerce grows rapidly, but remains small versus other channels

Key beauty e-commerce regions are Asia Pacific and North America

Key e-commerce categories are skin care and colour cosmetics

Digital engagement is the second-most influential trend globally in 2019

Smartphones play a key role in e-commerce acceleration in beauty

Consumer-centric Strategies Bring Opportunities

Respondents cited e-commerce for largest gains, driven by these themes

Going beyond target audiences to drive engagement, purchases online

Exclusive collections bet on consumers’ desire for uniqueness

Personalisation is a point of differentiation for online beauty purchases

E-commerce is the default for DNA-driven personalisation , a rising trend

Brand-adjacent online communities strengthen consumer engagement…

…while presence on influencer-led online communities helps drive traffic

Beauty integration in apps drives momentum in China…

…but nascent in US and other markets with sizeable beauty e-commerce

Augmented/virtual reality, AI are tools used mainly by premium players

Voice search and commerce represent further frontiers of beauty

Online-only private label beauty demands for affordability and simplicity

Challenges are not Industry Specific

Beauty challenges include sensorial trials and experiences

Solutions available for packaging, but sustainability still an open question

Internet access presents challenges beyond beauty

Large unbanked population hinders e-commerce momentum

A Positive Outlook

Beauty e-commerce to grow robustly across all regions to 2023

Beauty e-commerce well developed in China, Japan and South Korea…

…but potential exists in India and Indonesia, especially in skin care

Skin care continues to be the biggest contributor to e-commerce…

…while colour cosmetics is key in Australasia, fragrances in Latin America

…alongside e-commerce growth in personal care in North America

Two approaches to leverage strengths of e-commerce in beauty

Omnichannel is the path of greatest opportunity

Omnichannel has proven success in North America

Appendix

Overview of Beauty Survey: product and brand coverage

Overview of Beauty Survey

Why buy this report?

Want to find out more about this report?

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