World Market for Beauty and Personal Care

May 2022

The recovery that the industry anticipated after a challenging 2020 was reflected in a solid rebound in 2021. Driven by wellness, skin care led while colour cosmetics and fragrances regained momentum. E-commerce slowed, but increased penetration in certain categories, like skin care. Rising cost of goods and inflation casts uncertainty on economic gains. Price sensitivity due to market volatility in 2022 will heighten demand for multi-functional and affordable beauty and personal care.

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Key findings

Focus on health and safety heightens consumer demand for clinical, science-backed beauty

Evolving priorities around health and safety are created demand for beauty based on substantiated scientific claims. Brands that have science-backed credentials and proven efficacy are poised to do well in the forecast period, especially dermocosmetics. The rise of ingredient-led beauty searches also gives lesser known brands an opportunity to attract consumers interested in brand discovery and experimentation. Active ingredients that support skin health, especially those with moisturising and skin barrier protection benefits, with sustainably-sourced ingredients, will perform well.

Beauty and personal care players are experimenting in all aspects of beauty tech, especially phygital reality and personalisation

Because beauty tech encompasses a wide range of technologies, beauty players are experimenting to see what strategy fits best for their target consumers. Beauty brands, especially premium and luxury brands, will continue to debut in the metaverse with a virtual store presence and NFTs. However, consumers are eager to return to stores, so players and retailers must re-envision how a bricks-and-mortar store can still complement phygital experiences. Personalisation will be a major part of beauty discovery, with hyper-personalisation momentum faster in super-premium and premium products.

Demand for product and price hybridity in beauty and personal care grows amid volatile markets

Given 2021 and 2022’s high inflation rates, continued supply chain disruptions, geopolitical uncertainties and rising energy prices, consumers globally want brands that deliver the best value and optimal benefits. Multifunctional products thrive during periods of uncertainty, which was the case during the Financial Crisis, and that same pattern is expected in the forecast period. Prices are climbing across fmcg industries, and beauty players may need to revisit their profit margins, which will impact unit prices and pack sizes.

High levels of stress globally usher in demand for emotional wellness, tapping into beauty’s role in providing comfort and indulgence during the COVID-19 pandemic

In 2022 and beyond, the self-care narrative will be renewed, due to the current economic environment and geopolitical events. Beauty will increasingly be seen as a long-term investment in one’s health. Beauty-adjacent categories will also benefit, such as air care (eg home fragrance launches from fine fragrance players), ingestibles that leverage the “beauty from within” link between gut health and skin health, and beauty devices that mimic spa-level experiences. Fragrances’ association with emotional wellness is likely to endure in the forecast period, with emotional wellness as a key driver.

Conscious beauty is becoming more mainstream, driven by Gen Z and Millennial beauty consumer

Though “clean beauty” is still growing, conscious beauty is led by a “people over profit” mentality. Newer digitally-native and indie brands are being developed with social causes, waste reduction and circular systems in mind, which give them an advantage over other brands. Beauty brands that highlight the importance of mental health, universal design (eg braille, easy to open for consumers with differing levels of ability, etc) and positively benefit the environment will be in high demand. Packaging waste reduction will still be key, as companies aim to meet their sustainability commitments.

Scope
Examining five trends shaping the beauty and personal care industry
2021 marked the rebound the industry expected, a positive sign for long-term growth
Personal care essentials and trend-driven beauty contributed to resilience in the industry
Skin care maintained lead, while colour cosmetics and fragrances regained momentum
Asia Pacific’s growth hinged on skin care, while North America bolstered colour cosmetics
Hair care gains strongest in Asia Pacific and North America; largest losses in Latin America
The top 10 beauty and personal care markets maintained their rank in 2021
E-commerce growth slows in 2021, but increases penetration in skin care and cosmetics
Colour cosmetics recovers in 2021 with mid-single digit growth, but not quite to 2019 size
Asia Pacific to witness the fastest growth of all regions in premium fragrances
Rising cost of goods and inflation casts uncertainty on post-COVID-19 economic gains in 2021
Global stagflation scenario from war in Ukraine would affect largest beauty markets
Market fragmentation continues to rise in most regions
L’Oréal Groupe maintains leadership, while Beiersdorf regains sixth place
COVID-19 sees mass-led companies thrive, while premium continues to recover
Local Chinese brands are some of the fastest growing globally, propelled by C-beauty concept
L'Oréal leads in ethical claims
Business activity focused on premium indie brands, health and realignment
Examining five trends shaping the beauty and personal care industry
Clean to clinical: The rise of ingredient-led beauty
Beauty tech: Personalisation in demand, but price-value-efficacy “sweet spot” a challenge
Beauty tech: Phygital experiences underscore a wider metaverse movement
Product and price hybridity: Multifunctionality and affordability grow amid pricing pressures
Emotional wellness: Self-care morphs into emotive branding and adjacent wellness
Conscious beauty: Combining social purpose with environmental and economic sustainability
Digital engagement expected to wield greatest influence in the forecast period
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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