Beauty Industry Statistics and What They Mean for Your Business

Apr 7, 2019
Beauty Industry Statistics

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Analyzing and understanding current beauty industry statistics is key for growing your business. You need to be able to differentiate between the trends that are important for your business and can drive growth, and those that are fleeting. Statistics can help you do just that.

When it comes to the beauty industry, adapting to the current landscape is critical. If you just keep doing what you've always done (even if you’re doing it well) - you’re moving backward. It’s a fast-moving sector, where new products, brands, and innovations are released on what seems like a daily basis.

We’ve outlined some of the latest beauty industry statistics in the article below. See what they mean for your business and what you can learn to take your brand forward with success.

Natural skincare at different price points

When consumers first started to use and become interested in natural and organic skincare, these products were mostly high-end at a premium price point. In general, they cost more to manufacture, so the price was higher.

Now younger generations expect to be able to buy natural and organic products, but at an affordable price. Almost a fifth of Generation Z say they prefer to make their own personal care products, compared to just 12% overall, which means that to get their business, these products can’t only live at the luxury end of the market.

The young-adult population of between 15 to 25 is a massive untapped market, as this age group accounts for approximately 21.7% of the total global population. Following this statistics, producing affordable, natural skincare represents a massive growth opportunity.

On the flip side, females aged 25 and older are willing to spend more of their income on premium products. Therefore, the high-end organic skin care market will continue to play a key role in the beauty industry.

E-commerce sales open up new markets

Online retailing has had a huge impact on the sales of natural and organic skin care products. Beauty industry statistics suggest that half the growth is online. The high penetration of smartphones with internet access, especially in developing markets, has driven the positive impact on online sales.

Growth has come from markets in highly populated countries such as India, Brazil, and Mexico. This is partly due to increased purchasing power and an encouraging regulatory environment for investments in organic skin care products.

Businesses need to invest in their e-commerce presence, especially when it comes to sales and overseas shipping options.

Regulations drive up the use of natural ingredients

According to beauty industry statistics, the global organic personal care market size is projected to reach $25.11 billion by 2025,  which is a CAGR of 9.5%. Natural ingredients – such as jojoba oil, pomegranate oil, papaya, pineapple, argan oil, and essential oils like lavender – are driving growth and increasing consumer demand in the skin and hair care market due to their antioxidant properties.

It’s not just consumer demand that companies need to track when it comes to the use of synthetic ingredients; regulations are also playing their part.

California banned the sale of animal-tested cosmetics in 2016, while the UK banned animal-tested cosmetics in 1998, and the EU followed suit in 2013. It’s important to keep track of upcoming regulations as governments look to restrict these kinds of ingredients and production methods.

Sustainability is more than just a buzzword

Millennials and Generation Z are increasingly choosing brands according to their environmental and sustainability practices. It’s no longer enough to pay lip service to being sustainable; consumers are demanding concrete commitments. In fact, two-thirds of consumers say they aim to have a positive impact on the environment through everyday actions.

Many consumers believe that the beauty industry is not doing enough, especially as the sector generated over 142 billion units of packaging in 2018.

Sustainability practices that can win back consumer trust range from using less water in production to more easily recyclable packaging and a significant reduction in the use of plastic. But sustainability along the supply chain is also important. Your company needs to be clear that it is only partnering with and sourcing from companies that operate under the same principles.

Significant opportunities for early entrants

According to the latest beauty industry statistics, hair care is dominating the natural and organic personal care market, with an approximate market share of 30% in 2017. This growth is only going to continue due to rising purchasing power, a growing millennial population, and a surging urban population.

Yet the global hair care care market is fragmented, with some hair care market players operating on a local level while others are operating on a regional and global level. Only a few players dominate the competition in the global hair care market. This means the sector is ripe for new entrants who can make their mark with the right strategy and products.

Another largely untapped growth market is in children’s personal care products. This is a growing market that represents a real opportunity for early entrants to establish a foothold.

Growth is expected to continue in the coming years as parents, particularly in high-income countries, address concerns with reducing their children’s chemical exposure. The best opportunities here will be products with safety and organic certifications, as well as prominently featured natural ingredients.

Want to learn more?

Check out the new guide from Schwartz Natural Cosmetics - we've compiled latest market insights and business tips for entrepreneurs in the skin and hair care industry. Download the Ultimate Business Guide to Private Label Skin and Hair Care in 2019 and learn about how you can build your own customized product.

Download the Ultimate Business Guide for Private Label Skin and Hair Care

This blog post is for educational purposes only.

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