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.
This report comes in PPT.
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.
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.
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.
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.
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.
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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