The Growing Cosmetics Market Driven by Higher Spend on Premium Beauty Products

The global cosmetics market is estimated to be valued at US$ 438.5 Bn in 2024 and is expected to exhibit a CAGR of 5.3% over the forecast period 2023 to 2030. Cosmetics refer to a range of care products used to enhance the appearance or odor of the human body. They include skin care products, hair care products, makeup, perfumes, and other care products. The high demand for premium cosmetics products that enhance beauty and pamper the skin and hair is driving significant market opportunities.

Key Takeaways
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Key players operating in the cosmetics market are L’Oreal S.A, Unilever plc., The Procter & Gamble Company, The Estee Lauder Companies Inc., Shiseido Company, Limited, LVMH Moët Hennessy, Kao Corporation., Oriflame Holding AG, Avon Products Inc., and Revlon, Inc. Cosmetics companies are witnessing higher demand due to growing consciousness among consumers regarding appearance and persona. The increasing spending power is encouraging consumers to spend more on premium beauty products. Technological advancements have revolutionized the cosmetics industry with the introduction of natural and organic products addressing sustainability and wellness needs.

Market Trends

The growing popularity of organic and natural cosmetic products is one of the key trends being witnessed in the market. Consumers are increasingly looking for products formulated with natural ingredients that are less toxic and have fewer side effects. Another major trend is the rising preference for multifunctional cosmetic products allowing users to perform multiple tasks. Products with anti-aging, sun protection, moisturizing and other benefits are gaining widespread acceptance.

Market Opportunities

The male grooming category presents significant growth opportunities for cosmetics players. While the market has traditionally been dominated by women consumers, men are also stepping up their spending on personal care. Another key opportunity lies in customized cosmetics developed specifically for different geographic regions, cultures and skin types using advanced research and analytics. Players investing in customized solutions can gain an edge.

Impact of COVID-19 on Cosmetics Market growth
The COVID-19 pandemic has significantly impacted the growth of the global cosmetics market. During the initial lockdown phases across various regions, retail stores selling cosmetic products were temporarily shut which severely affected sales. People were confined to their homes due to movement restrictions and had reduced occasions to use cosmetic products like makeup. This led to a major decline in demand especially for color cosmetics products in 2020. However, with increased preference for healthy and natural skincare products, the demand for products like moisturizers and face washes increased during the pandemic.

Major cosmetics manufacturers faced supply chain disruptions due to restrictions on transportation of goods. This hampered the procurement of raw materials and distribution of finished products. In response to changing consumer behavior, companies launched new hand sanitizers and focused more on online sales channels. With economic activities resuming and vaccination drives underway, the demand is recovering, though the impact will be noticeable for a few years. Companies will have to focus on developing affordable products, digital innovations and adapt sustainability strategies to cope with long term impacts.

The Asia Pacific region is where the cosmetics market in terms of value is highly concentrated. This is because of rising incomes, growing working women population, increased social media influence and proliferation of global brands in countries like China, Japan and South Korea. European region is also a major market led by color cosmetics demand in countries such as France, Germany and Italy. However, in terms of fastest growth, the Latin American region is emerging as the leading geography driven by rising affluence, expanding middle class and greater preference for premium international brands especially in Brazil and Mexico.