World Market for Beauty and Personal Care

May 2023

The looming factors of high inflation, rising unit prices and strained supply chains became significant challenges for beauty and personal care, resulting in a deceleration of growth in 2022. Especially supply chain disruptions and extended shutdowns in China in 2022 negatively impacted skin care and hair care. As prices increase further, consumers are forced to make more selective decisions, heightening demand for ingredient-led and hybrid wellness products.

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This report comes in PPT.

Examining five trends shaping beauty and personal care industry

As beauty and health products become more expensive due to high rates of inflation globally, consumers are forced to make more selective decisions when it comes to the products they buy.

The result has been a polarisation of spending across the product categories. Private label, price-accessible brands and “dupes” are emerging as a competitive alternative to balance consumer needs of efficacy and affordability. While inflation appears to have peaked globally last year, unit prices are likely to either remain steady or increase further. The biggest challenge will be to adopt a multi-faceted approach to ensure consumer loyalty, while beauty consumers increasingly make trade-offs to find the best intersection of value, efficacy and indulgence.

Momentum for ingredient-led beauty continues as consumers search for efficacy, international beauty concepts and sustainable sourcing.

While the “clean beauty” movement still involves avoiding certain ingredients (eg sulfates, parabens, etc) or embracing naturally-derived ingredients, this trend is a new take on “clean”. Instead, it highlights the benefits of specific ingredients (with many sourced from international beauty concepts such as ayurveda) and demonstrates how bioengineered ingredients can be just as effective.

With the perception of health and beauty becoming blurred, hybrid offerings of beauty brands and adjacent wellness categories are increasing.

As consumers' changing perception of beauty towards "a part of holistic wellness“, brands need to make a strong connection between the efficacy of their products and holistic health, which also can be proven scientifically, to gain consumers' trust. Only brands that have earned trust in the minds of consumers will be able to expand more easily into other categories.

Women’s health expands into a continuum of wellness needs, which companies are increasingly entering to position themselves as women’s lifelong wellness partners

Over the last few years, there has been a proliferation of multiple women-centred and women-founded health start-ups and substantial venture capital investment in this space. This has led to the development of products and services that help women achieve optimal care across a continuum of wellness needs from menstruation to skin, sexual health, incontinence as well as mental and gut health. The female wellness spectrum is under-penetrated and will be a key focal area in not only developed but also emerging markets.

Emotional values such as internal health benefit and social value identities have become essential factors in making a purchase decision.

Firstly, active ingredients and fragrances that are able to alleviate internal concerns, such as sleep issues, stress and anxiety. Neuroscience will be used as a biometric signal to evaluate emotional functionality, which opens a new opportunity space for fragranced products. Secondly, for social values, in the long term, it will become a must for brand to provide value that allows consumers to express their identities through purchasing.

Examining five trends shaping beauty and personal care industry
Post-COVID gains in beauty and personal care tempered by deceleration in 2022
Streamlined routines and pricing sensitivity led to more cautious beauty consumption
Skin care decelerates into slight decline in constant terms, joined by hair care
Despite 2022 declines in constant terms, Asia Pacific to underpin global growth in forecast
Rising inflation adds pressure on discretionary spend; price changes suggest a peak, for now
China and US maintained ranks , forecast for Brazil and Saudi Arabia upgraded in 2022
E-commerce growth slowed in 2022, but increases penetration in fragrances and skin care
P remium fragrances in Asia Pacific continues to maintain strong growth potential
Inflation is having “extensive impact” on beauty and personal care players across regions
The gap between current and constant growth widened in 2022
Many factors influence elasticity in beauty beyond price, such as trends and emotions
Price increases will vary across categories and markets, but unlikely to decrease in 2023
Beauty and personal care professionals take a multifaceted approach to combat inflation
Global stagflation scenario would have the greatest negative impact on skin care
Market fragmentation continues to rise in most regions
L’Oréal Groupe maintains leadership, while Coty moved up to eighth place
High inflation and China shutdowns decelerated the recovery of mass and premium in 2022
Local Chinese brands are some of the fastest growing globally, propelled by C-beauty concept
Companies’ ethical claims emphasise “vegan”, “organic” and “cruelty-free” features
Global companies investing in digitalisation and local R&D pillars in Asia
Direct sellers lean into digitalisation strategies through channels and marketing
Examining five trends shaping beauty and personal care industry
Premiumisation and affordability in beauty: Private label benefiting from restricted budgets
Ingredient-led beauty: A new take on “clean and conscious”
Blurring wellness spaces : Two-way expansion of beauty and adjacent categories
Supporting women’s health and wellness: A wide spectrum of need states
From function to emotion: Emotional value as an essential path to purchase factor
Global snapshot of baby and child-specific products
Global snapshot of bath and shower
Global snapshot of colour cosmetics
Global snapshot of deodorants
Global snapshot of depilatories
Global snapshot of dermocosmetics beauty and personal care
Global snapshot of fragrances
Global snapshot of hair care
Global snapshot of men’s grooming
Global snapshot of oral care
Global snapshot of skin care
Global snapshot of sun care
Regional snapshot: Asia Pacific
Regional snapshot: North America
Regional snapshot: Latin America
Regional snapshot: Western Europe
Regional snapshot: Middle East and Africa
Regional snapshot: Eastern Europe
Regional snapshot: Australasia

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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