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.
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