At this year’s Cosmetics Europe Annual Conference, Euromonitor beauty & health senior research analyst Emilie Hood shared an in-depth, data-led analysis of the beauty and personal care industry across the globe.
According to Euromonitor’s data, in 2023 the global beauty and personal care industry was valued at ($570bn US dollars), which was up by 9.3% compared to 2022.
Hood noted that there was around 4% increase on growth from 2021 to 2022, without including inflation. And that looking at a five-year period up to 2028, the compound annual growth rate was forecast to be 8.4%, which was higher than Euromonitor’s predicted figures last year, according to Hood.
Looking at these impressive figures, there’s no doubt that cosmetics is a thriving industry across the world and that it is showing no signs of slowing down any time soon.
We’ve summarised some of the most important points Hood shared about the global beauty and personal care business landscape now and in the future and wrapped it up in a two-part series. Look out for Part II early next week…
What’s the highest-value global beauty market?
Hood revealed that Asia Pacific is still the largest beauty and personal care market globally – contributing almost a third of the overall value.
“A lot of this comes from skin care,” she explained, “and there are a few reasons. Firstly, the population is very large in Asia Pacific, with increasing spending power. They also have quite intricate routines. In other markets, people tend to use three or four items of skin care, whereas in some of the markets in APAC, they'll be using six or seven.”
She also shared that although the North American and Western European markets are “more mature with a lot less innovation,” they are still growing.
Which beauty categories are thriving?
Globally, skin care remains the largest category. It was the same last year and the year before and is likely to continue this way. “We expect to it to continue to be the highest in terms of value,” said Hood.
“Skin care generally has a far broader range of products in that category than same fragrances. Consumers will use one or two fragrances habitually, whereas with skin care, they'll usually use between four and six products,” she explained.
The hair care category is one to watch, as it is growing in value.
“A completely new behaviour is setting in and it's all about this skinification of hair care – where consumers are paying more attention to hair health,” she said.
Hood also highlighted that more people are looking for long-term solutions and adding products like hair masks and serums on top of their usual shampoo and conditioner.
She noted that other categories are “remaining stable in terms of there is growth, but there's nothing dramatic happening, particularly within personal care.”
“Consumers want to spend more they want to try new things and get some indulgence,” she explained.
“Dare I say it, categories like oral care and deodorant are slightly less thrilling for consumers. They want deal-driven products and if they have one that already works, they're not going to venture outside of that.”
Which holds more value: mass or premium?
“Mass is bigger than premium in terms of value,” said Hood.
“There are a number of different things contributing to this,” she explained.
“The first being that products like toothpaste or bath and shower products are used more frequently, so consumers might buy that once or twice a month. Whereas they will probably buy fragrance every six months to a year.”
“However, this year premium growth has been quicker and larger than mass growth,” Hood continued.
She noted that this was “down to the ‘lipstick effect’ around inflation” – the concept that when people’s spending is restricted, they will treat themselves to something small and indulgent like a new lipstick, rather than spend on other bigger and more costly luxuries.
Hood said this is noticeably seen among the designer fashion brands that also sell cosmetics. Customers who may have bought an item of clothing will “trade down” to a cosmetic product to still have a treat.
She also flagged up that Euromonitor forecasts that mass is going to grow significantly more due to the emerging markets. “They are spending a lot more on mass products,” she explained.
Which retail channels do beauty consumers favour?
“We’ve seen a real huge boom in retail ecommerce, said Hood. “Obviously, Covid brought about that for everyone, and that was a real force of change.”
However, she said that while there has been a consumers still being interested in retail ecommerce, beauty and personal care consumers are still “pretty loyal to brick and mortar stores, across the board.”
“So with things like oral care and deodorants, they'll generally pick that up as they're going about their routine, for example in the supermarket. “But then with the more emotive products, they enjoy going out and testing, even if it's something that they buy already, they enjoy going and looking.”
For Hood, customer experience was a key factor in this. “There is that indulgence that is prevalent in brick-and-mortar that just isn't in ecommerce retail,” she said.
She also highlighted that we are “seeing a shift in this when it comes to price sensitivity – when there are massive discounts on ecommerce stores, that people would perhaps rather go in-store and get, such as fragrance."
Enjoyed reading this? Look out for Part II of this story to get more insights from Euromonitor’s Emilie Hood.