Cosmetics Market Size, Share & COVID-19 Impact Analysis, By Category (Hair Care, Skin Care, Makeup, and Others), By Gender (Men and Women), By Distribution Channel (Specialty Stores, Hypermarkets/Supermarkets, Online Channels, and Others), and Regional Forecasts, 2021-2028

The global cosmetics market size was USD 277.67 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with cosmetics witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited lower growth of -10.57% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 287.94 billion in 2021 to USD 415.29 billion in 2028 at a CAGR of 5.0% during the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Cosmetics products have become essential goods in life as they can enhance the individual's overall appearance and thereby help achieve a positive impact on the personality. The manufacturing of such items has been controlled by a handful of multinational corporations. They offer a wide variety of products, including face care, hair care, and lip care, among others, which are essential to fulfill the particular requirements of the end-user. Moreover, increasing launches of anti-aging products, developing innovative and convenient packaging designs, and compact containers that can be easily carried on the go are also attracting consumers. The hair type, skin tone, eye color, and shape of lips vary for each person. Therefore, manufacturers are focusing on developing and having a diverse product portfolio that can cater to the specific requirements of every individual.

An Infographic Representation of Cosmetics Market

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Product Sales Declined during COVID-19 due to Store Closures

The cosmetic industry has been stunned by the COVID-19 crisis resulting in a significant decline in the demand for cosmetic products. Additionally, the consumer purchasing pattern has dramatically changed across the beauty and personal care space due to the strict lockdown and widespread store closures in the first half of 2020.

As per Estee Lauder Companies Inc.'s news published in April 2020, most retail stores operated by the company or its customers had to be closed down since mid-March 2020 across its operating regions, including The Americas and Europe, and the Middle East & Africa. As per the same source, the company's travel retail business was affected negatively due to strict restrictions imposed on travel, particularly air travel. However, the company took efforts to participate in COVID-19 relief activities through funds and product donations. Estée Lauder's production site, located at Whitman, the UK, started to manufacture hand sanitizers under its brands Jo Malone London and Estée Lauder due to its heightened demand, which would donate to employees and front-line workers.

Retail store closures led to a rapid shift towards online channels that provided growth opportunities to manufacturers. As per L'Oréal's 2020-annual-results published in February 2021, the company's sales increased by 62% for e-commerce across all divisions and all regions, accounting for about 26.6% of the total company's sales for 2020.

Therefore, players operating in the beauty market are trying to streamline their supply chain during the pandemic period and focus on increasing online sales. On the other hand, the opening of offline stores would further boost product sales in the near future.

LATEST TRENDS

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Growth of E-commerce Industry and Improved Marketing Activities by Manufacturers are Vital Trends

Various players in the market are initiating digital marketing strategies, preparing interactive advertisements, and making substantial efforts to promote their products through social media, which is likely to foster product demand. The rising influence of social media and increasing internet penetration attract consumers towards e-commerce to buy personal care products. For instance, in August 2019, Grupo Boticário, a Brazil-based beauty products company, announced its plans to acquire Beleza na Web, an e-commerce platform for selling its products. Therefore, manufacturers are focusing on offering a large number of products through an online channel to meet consumer demand.

DRIVING FACTORS

Rising Awareness Regarding Health, Hygiene, and Grooming to Fuel Demand

Concerns regarding body and well-being are increasing daily due to a busy schedule, changes in routine, eating habits, and fluctuations in the sleep cycle. Beauty products can alter the quality, cleanse, and beautify external body parts and thereby can help individuals to look healthier and more attractive. Therefore, these are some of the factors that resulted in flourishing product demand from younger and aged populations. Additionally, the increasing trend of using sun care products, night skin repair creams, refreshing fragrances, and hair colors, and others, is also expected to boost the product demand. For instance, according to the 'Sun Safe Behavior Survey 2018' of the Canadian Dermatology Association, the number of individuals using sunscreen all year round increased from 17% in 2015 to 26% in 2018 in Canada.

Moreover, manufacturers are focusing on introducing personalization and digitalization in cosmetic products to attract a customer base. For instance, in February 2020, L'Occitane Group launched its new personalized skincare system, 'Duolab,' having a countertop device operated using artificial intelligence. This device can diagnose an individual's skin condition as and when required and then provides a customized face care solution in the form of freshly blended cream.

Therefore, increased awareness regarding grooming coupled with technological advancements is expected to support the cosmetics industry growth in upcoming years.

Adoption of Sustainable Cosmetics to Drive Market Growth

Products formulated with naturally derived ingredients are gaining more popularity across the globe owing to their safe and non-toxic nature. Demand for eco-friendly products is expected to grow in the near future, owing to the growing awareness regarding sustainability among the population. This can be attributed to rising consumer awareness regarding the adverse effects of synthetic chemicals on health and the environment. For instance, according to the report, ‘Organic Beauty and Wellbeing Market’ published by the Soil Association Certification report, in 2018, in the U.K, the organic personal care market witnessed a growth rate of 7% in 2018.

Additionally, consumer preference is shifting towards vegan products that do not contain any ingredient derived from animals. Furthermore, manufacturers also focus on providing sustainable packaging solutions, such as paper-based, degradable, and refillable packaging options, on attracting more users and reducing their carbon footprint.

RESTRAINING FACTORS

Rising Awareness of Side Effects and Access to Surgical Options to Hamper Growth

Cosmetic products contain several synthetic chemicals such as preservatives, pigment molecules, and other additives, which can have serious side effects on the body such as allergic reactions, the formation of black patches, acne or discoloration, and others. This can be attributed to the continuous deposition of toxic chemicals in the body due to prolonged exposure to these products. These factors are also shifting the consumer preference towards cosmetic surgeries, which can alter their appearance permanently and thereby help them reduce the daily use of beauty products. Therefore, rising customer awareness regarding the adverse effects of cosmetic products is expected to restrain the cosmetics market growth.

SEGMENTATION

By Category Analysis

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Skin Care Segment Dominated due to Their Daily Usage by Wide Range of Population

Based on the category, the market is segmented into hair care, skincare, makeup, and others. The majority of the population uses skincare products daily compared to hair care products and, therefore, is expected to hold a significant share. For instance, according to the ‘Consumer Survey on Cosmetic Dermatologic Procedures 2018’ conducted by the American Society for Dermatologic Surgery (ASDS), about 80% of consumers spend more than USD 100 per month on skincare products in the United States.

Haircare includes several products such as shampoo, hair colors, oil, serum, and others. These products provide nourishment to the roots of the hair and improve the texture of strands, which are more in demand from the younger population. Makeup products include face powders, blush, mascara, and lipstick, which further enhance the look. Innovative color shades and affordable makeup products to the mass population are expected to drive the segment growth.

The other segment includes fragrances and hygiene and oral care products. And, the need for such products, including fragrances, teeth whitening creams, and breath fresheners, is increasing globally owing to growing hygiene awareness, thereby boosting the segment growth.

By Gender Analysis

Rising Demand from Working Women to People the Women Segment

Beauty products have a more significant influence on female end-users. The younger generation and working women are increasingly exploring beauty care solutions. Therefore, an increasing number of working women globally is expected to boost product demand and support market growth. For instance, according to the data released by the Australian Government in February 2020, among all the employed individuals in Australia, women held a share of about 47% in 2019.

Awareness regarding men’s grooming is increasing across the globe, which is driving product demand. For instance, according to the survey conducted by The Bluebeards Revenge in the U.K. in 2018, 52% of the men surveyed said that they wish to pay more for grooming products in the coming year.

By Distribution Channel Analysis

Hypermarkets/Supermarkets Segment to Dominate due to Wide Availability of Products under One Roof

The market is segmented into hypermarkets/supermarkets, specialty stores, online channels, and others in terms of distribution channels. Hypermarkets & supermarkets segment holds a major share in the global market owing to the availability of a wide range of products from various cosmetic brands under one roof; bulk purchasing from these stores provides various discounts and offers. Thus, this led to the growth of the segment.

The offerings of specialty stores include beauty brands products where the availability of products is generally less. The online stores segment is projected to grow significantly due to the ease and convenience offered by online purchasing. Additionally, online stores provide different benefits such as free home delivery, discounts on bulk orders, & gift coupons and also save their time going to offline stores.

REGIONAL INSIGHTS

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The market in North America has witnessed positive growth owing to the higher spending power of the populace, coupled with increased demand for luxury and premium products. Additionally, an increasing number of beauty product stores in the region is also one of the major flourishing factors for the market's growth during the forecast period. For instance, in February 2020, Sephora, one of the largest cosmetic chains in the U.S., announced its expansion plans, including opening about 100 new stores across the North American region 2020.

The European market is characterized by leading players in the beauty & personal care industry, including L'Oréal and Beiersdorf AG, Unilever, and others. Moreover, factors such as an increased number of beauty salons and a rising number of millennials and generation Z in the region are expected to propel the demand for various cosmetic products. For instance, according to Annual Report 2018-2019 of The German Cosmetic, Toiletry, Perfumery and Detergent Association, between the years 2013 to 2018, the skin & face care products market witnessed an average growth of 2.7% per year, and it was about 4.1% per year for decorative cosmetics market in Germany.

The Asia Pacific is expected to hold a significant size of USD 102.55 billion in 2020 due to emerging economies such as China and India. This is due to several factors, including increasing urbanization and standard of living and an increasing number of working women, which, in turn, fuel the product demand. For instance, according to data released by the Ministry of Economy, Trade, and Industry of Japan in 2019, the quantity of cosmetics produced has increased from 434 thousand tons of units in 2017 to 455 thousand tons of units in 2018.

The middle-class population is likely to purchase beauty products as they evolve rapidly based on the significant changes in their preferences. Thus, the rising middle-class population in the region is responsible for the burgeoning demand for products. For instance, according to the article, ‘The Middle Class in India- From 1947 To The Present and Beyond’ published by Association for Asian Studies in 2018, in India, the middle-class population was about 5% to 10% of the country’s population in 2005 which is expected to increase to about 90% by 2039.

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The market in South America, and Middle East & Africa is expected to hold a comparatively lower share than other regions. However, rising disposable income, increasing access to international products, and the growing availability of affordable products are expected to drive the market growth in these regions.

KEY INDUSTRY PLAYERS

The Market is Highly Fragmented with a Varied Product Portfolio of Companies

The cosmetics industry is highly fragmented, owing to the presence of several domestic and international players across the globe. Additionally, companies are focusing on developing organic and natural products, which will propel market growth. Manufacturers are focusing on attractive packaging options, substantial promotional activities, and the development of novel products to attract consumers and gain a strong foothold in the market.

For instance, in February 2021, Kao Corporation introduced a serum, SOFINA iP INTERLINK SERUM Pore Refining Moisture. This product would condition the skin to provide a clear, moist texture along with concealing pores.

LIST OF KEY COMPANIES PROFILED:

• L’Oréal S.A. (Paris, France)


• Unilever (London, U.K.)


• Procter & Gamble Co. (Ohio, US)


• The Estée Lauder Companies Inc. (New York, U.S.)


• Beiersdorf AG (Hamburg, Germany)


• Shiseido Co., Ltd. (Tokyo, Japan)


• Coty Inc. (New York, U.S.)


• Natura & Co. (São Paulo, Brazil)


• Kao Corporation (Tokyo, Japan)


• Johnson & Johnson Services, Inc. (New Jersey, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• January 2020: Natura &Co acquired Avon Products, Inc., which offers beauty and personal care products. This acquisition would aid Natura in expanding its product portfolio.


• February 2021: Revlon partnered with MDR Brand Management for new product launches, wider retail reach, deeper consumer engagement across the EMEA, APAC, and Americas.

REPORT COVERAGE

The market research report provides a detailed global cosmetics industry analysis and focuses on crucial aspects such as leading companies, product categories, and distribution channels. Besides this, the report offers insights into the market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the global market over recent years.

Report Scope & Segmentation