June 18, 2024

Cosmetics Market is Estimated to Witness High Growth Owing to Rising Per Capita Expenditure on Personal Care

The cosmetics market produces a wide range of skin care, hair care, color cosmetics, and fragrances used to enhance one’s appearance and overall look. Cosmetic products help boost self-esteem, minimize skin imperfections, and cover scars and blemishes while providing nourishment and hydration. New organic and natural product lines are gaining popularity owing to rising health concerns regarding chemical ingredients in mainstream cosmetics. The global cosmetics market is estimated to be valued at US$ 438.5 billion in 2024 and is expected to exhibit a CAGR of 5.3% over the forecast period from 2023 to 2030.

Key Takeaways

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., Revlon, Inc. Key players are introducing new organic and natural product lines to capitalize on the growing demand.

The increasing demand for organic and natural cosmetic products is being driven by rising health consciousness. More consumers are opting for chemical-free formulations due to greater transparency regarding ingredients. Eco-friendly brands that avoid animal testing and ensure sustainable production are also gaining popularity.

The global cosmetics industry has been expanding rapidly, especially in Asia Pacific and Latin America. Emerging economies are expected to fuel much of the market growth owing to rising disposable incomes, increasing female workforce, western influence, and greater emphasis on personal grooming and appearances. China, India, Brazil, Mexico and other developing countries present lucrative opportunities for established as well as new players in the industry.

Market Key Trends

One of the key trends gaining momentum in the global cosmetics market is the rise of organic and natural beauty brands. Traditional cosmetic players are reformulating their products by removing harsh chemicals and parabens to come up with cleaner labels. Companies are focusing on natural extracts, essential oils and vitamins to create safe formulations. This shift is being driven by the millennial population that pays close attention to ingredients and prefers greener alternatives. Consequently, the demand for organic makeup, natural skin care and herbal hair care products is on the upswing globally.

Porter’s Analysis

  • Threat of new entrants: The cosmetics industry requires large investments in R&D, branding and marketing. Established brands enjoy strong customer loyalty making it difficult for new entrants.
  • Bargaining power of buyers: Buyers have high bargaining power given the availability of substitute products. They can easily switch to alternatives based on quality, price and offers.
  • Bargaining power of suppliers: A few large suppliers provide key raw materials giving them moderate power over industry participants. However, availability of alternate suppliers offsets this power.
  • Threat of new substitutes: Potential substitutes include generic makeup products and herbal alternatives. However, strong branding keeps substitutes at bay.
  • Competitive rivalry: The market is dominated by global giants. Firms compete based on product differentiation, innovation, promotions and brand loyalty.

Geographical Regions

North America accounts for the largest share due to high per capita cosmetics spending, presence of leading brands and innovative product launches. The U.S dominates the regional market.

The Asia Pacific region is expected to witness the fastest growth led by cosmetics boom in countries like China, India and Indonesia. Rising incomes, growing beauty consciousness and social media influence are driving the APAC market.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it