The Global Cosmetics Market Anticipated to Generate a Revenue of $457.8 Billion, Growing at a CAGR of 5.1% from 2020 to 2027 - Research DiveDownload Sample Reports Overview
The global cosmetics market is estimated to be valued at $457.8 billion by 2027, surging from $375.5 billion in 2019 at a noteworthy CAGR of 5.1%.
Impact Analysis of COVID-19 on the Cosmetics Market
The global market for cosmetics is estimated to experience a decline amid the COVID-19 pandemic. The growth is fluctuating amidst the pandemic due to decline in demand for cosmetics as majority of people are working from home. Due to complete lockdown situations across various countries people are working from home and the compulsion on wearing masks has made wearing makeup less important for the people. The closure of beauty outlets, hypermarkets/supermarkets, and supply chain disruptions has further led to decline in the demand. Some of the premium beauty stores may never open again and reopening might be delayed due to the ongoing pandemic. All these factors have greatly affected the cosmetics market.
Certain key vendors operating in cosmetics market, such as Coty Inc., an international cosmetics company, switched their manufacturing from cosmetics to cleaners and hand sanitizers during the pandemic. The Coty, Inc. on March 25, 2020 started manufacturing hydro-alcoholic gel as a sanitizer to combat COVID-19 virus. These hand sanitizers are distributed free of cost to pharmacies, company employees, medical and emergency service staffs.
L'Oréal Paris India, the leading cosmetics manufacturer, started creating engaging content under the series name ‘Lockdown Binge’ on YouTube. This features various tutorials such as hair coloring at home, to ensure safety of customers and employees. In addition, Lakmé Salon, a part of Hindustan Unilever, took prompt steps to combat the pandemic by making use of Arogya Setu app, for contract tracing and self-assessment of its employees during the pandemic. Also, the use of masks, gloves, sanitizers, and biodegradable disposables increased during this time. Along with Lakmé Salon, several other companies adopted technologies such as virtual try on products, contactless home delivery and billing solutions.
In addition, the pandemic has led to cancellations and postponements of beauty events across the world, due to which the cosmetic brands shifted to virtual events to keep everyone connected during the crucial times. Cosmetics play an important role in our day-to-day life by enhancing our appearance, boosting self-esteem, improving the texture of skin, hair, nails, and other body parts. These factors are estimated to create lucrative investment opportunities during the forecast period.
Global Cosmetics Market Analysis
The enormous growth of the global cosmetics market is mainly attributed to rising beauty consciousness among population, increase in disposable income, rising usage of natural cosmetic ingredients, product innovations, and advancements in beauty treatments. The anti-ageing, rejuvenating, and skin brightening properties of the cosmetic products are attracting large number of consumers. The natural and organic cosmetics products such as Juice Beauty, True Botanicals, Herbivore Botanicals, and others have several benefits as they are derived from plant sources, rich in botanicals, vitamins, that heals and restores our skin properties. The aromatic scents, attractive recyclable & reusable packaging, use of clean ingredients, and great textures are key drivers for the cosmetics market. In addition, the launch of new technologies that redefines beauty are key drivers. For instance, Modiface, a leading Augmented Reality (AR) technology for beauty industries, launched app ModiFace on September 12, 2016. This app is helpful for the dermatologists to measure the state of skin, to detect & quantify the skin changes such as discoloration, dark spots, dryness, and others. This app is widely used in AR apps by leading cosmetics manufacturers namely Sephora, Unilever, Allergan, and others. All these aspects are estimated to drive the market for cosmetics and fuel the growth of the market.
The ill-effects of chemical-based cosmetics that contains number of dangerous chemicals may obstruct the growth of the market. When a person uses chemical-based cosmetics, their skin absorbs the chemicals which can enter into the blood stream or some of the lip cosmetics might get ingested that can lead to developmental delays, neurological issues, cancers, and other disorders that are expected to hamper the market during the forecast period.
The product innovations and technological advancements are estimated to create huge opportunities for the global cosmetics market in the future. Avon, a pioneer of beauty companies, discovered the new skincare technology called Protinol on January 29, 2020, that can restore both types of collagen which is found in healthy skin to mimic the collagen ratio found in baby skin. Collagen is responsible for quality, texture and bouncy effect found in baby skin. Shiseido, the Japanese leading cosmetic and beauty company launched new beauty brand Baum on January 31, 2020. The products under this brand use the power of trees to support healthy skin regardless of gender or age. Also, this brand uses sustainable product packaging by using up-cycled wood. Up-cycling wood is the process of making creative reuse of wood that has much higher value than the original. Such innovations driven by sustainability are estimated to generate huge growth opportunities in the market. In addition, on January 1, 2019, L’Oréal, the international cosmetics company headquartered in France, unveiled its latest technology of wearable sensor that can measure the pH level within 15 minutes. This will allow the company to offer personalized product for the individuals based on the pH level. Such initiatives by the cosmetic manufacturers are estimated to drive the market growth and create huge growth opportunities in the market during the review period.
Global Cosmetics Market, Segmentation
The global cosmetics market is segmented based on category, gender, distribution channel, and region.
The category segment is further classified into skin & sun care products, hair care products, deodorants & fragrances, and makeup & color cosmetics. Among these, the skin & sun care products are anticipated to have the dominant market share and surpass $164.2 billion by 2027, with an increase from $147.6 billion in 2019. The growth is majorly attributed to the use of skin & sun care products in daily healthcare regimen of individuals. The sun care products are effective in reducing the risk of skin cancer, protection against inflammation, sunburn, hyperpigmentation, and other issues. There are ample of benefits that are offered by skin care products such as they help in preventing skin problems such as acne, wrinkles, rejuvenates your skin, protects skin from pollution, has brightening & lightening properties, and others. All these factors are predicted to create a positive impact on the category sub-segment throughout the forecast period.
The gender segment is further divided into men, women & unisex. The women sub-segment is anticipated to have a dominating share in the global market and register a revenue of $233.4 billion during the analysis timeframe. The huge growth in this sub-segment is attributed to increase in beauty consciousness among women. Further, variety of beauty products such as hair care products, nail care products, sun care products, skin care products, deodorants, makeup, and color cosmetics are available for women. Also, from ancient times the cosmetic industry is largely driven by women population as they are more beauty conscious. Various top brands such as Avon Products, Inc., Kao Corporation, Oriflame Cosmetics S.A., and others are available in the market that offer numerous products at competitive prices. All these factors are anticipated to generate lucrative revenue throughout the forecast period for the gender segment.
The distribution channel segment is further classified into hypermarket/supermarket, specialty stores, pharmacies, online sales channel, and others. Among these, the hypermarket/supermarket distribution channel is anticipated to have the dominant market share and surpass $171.4 billion by 2027, with an increase from $152.6 billion in 2019. The growth is majorly owing to the availability of large variety of cosmetic products from various brands under one roof. Also, hypermarkets/supermarkets offer attractive discounts, shopping is convenient, and customers can also try the tester products. The customers get wide range of options to choose from, based on the brand, price, product composition, features, benefits, and others. Also, the display of goods at hypermarket/supermarket is neat and attractive. All these factors are predicted to create a positive impact on the distribution channel sub-segment of the cosmetics market throughout the forecast period.
The cosmetics market for the Asia-Pacific region is projected to witness rapid growth. This region generated a revenue of $135.6 billion in 2019 and is further projected to reach up to $181.3 billion by 2027. The growth in disposable income, appetite to discover & experience new products, proactive beauty & wellness are the major drivers for the market growth. Also, various company initiatives in Asia-Pacific region are driving the cosmetics demand. For instance, Shiseido, leading cosmetics manufacturer, has begun selling its cosmetic products to Sri Lanka from March 2020, via its distributor LUXASIA PARTNERS PTE. LTD., which is the largest retail & e-commerce network of Asia-Pacific region. With this initiative, the Shiseido products are now being old across 88 countries and regions across the world. These aspects are anticipated to boost the market growth in the Asia-Pacific region.
Key Players in the Global Cosmetics Market
Some of the leading global cosmetics market players are –
- Avon Products, Inc.
- L’ORÉAL S.A.
- Kao Corporation
- Revlon, Inc.
- Oriflame Cosmetics S.A.
- Shiseido Company, Limited
- Skin Food Co., Ltd.
- The Estée Lauder Companies Inc.
- Procter & Gamble Company
- Unilever Plc.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Cosmetics Market
- Bargaining Power of Suppliers: The companies involved in cosmetics business are high in number. These companies are working on product launch, innovations, acquisitions, and partnership to deal with the supplies. Further, the volatile demands in supplier pricing may impact company profitability.
Thus, the bargaining power of the suppliers is moderate.
- Bargaining Power of Buyers: Buyers have a high bargaining power, primarily because of the huge number of suppliers, competitive pricing offered by suppliers, and variety of products available having different benefits. The buyers have more choice in selecting the right cosmetics.
Hence, the bargaining power of buyers is high.
- Threat of New Entrants: Startups entering this market are making advancements in the cosmetics products such as sustainable & attractive packaging and use of natural ingredients rather than synthetic ones that can attract customers.
As a result, the threat of the new entrants is moderate.
- Threat of Substitutes: Also, not many alternative products are available to the customers.
Therefore, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: The ventures operating in the global cosmetics market are focusing on strategies such as acquisitions, product innovations, capacity expansion, and product launch at competitive prices to hold their position in the market. Such initiatives help the companies in strengthening the footprint worldwide.
Therefore, competitive rivalry in the market is high.