Beauty Trends 2024 - Industry Outlook
Key Highlights
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The beauty and personal care market is positioned to generate a staggering revenue of US$646.20 billion in 2024, with an anticipated annual growth rate of 3.33% (CAGR 2024-2028).
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The beauty tech sector is poised for remarkable growth, with a projected CAGR of 18.8% from 2021 to 2026.
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In 2023, a significant 77.5% of beauty products were sold through brick-and-mortar stores.
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In 2024, the United States leads the global market, boasting an estimated revenue of 100 billion USD, following closely behind are China, Japan, India, and Brazil.
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Wrinkles dominate beauty discussions among US and UK consumers, Germans tend to express greater concerns about dry skin issues. In France and Spain, the focus shifts to under-eye circles.
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Before making online beauty purchases, a staggering 90% of consumers prefer to explore retailer websites, often opting for unbranded searches.
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Consumers are gravitating towards clean and minimalist packaging, prioritizing functionality and efficacy in their purchases.
Market Overview for 2024
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The beauty and personal care market is on a trajectory of substantial growth, poised to generate a staggering revenue of US$646.20 billion in 2024.
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Diving deeper into this market reveals its diverse segments, including four primary segments: cosmetics, skincare, personal care, and fragrances.
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In tune with the evolving technological landscape, the emergence of the tech beauty segment adds another layer of innovation and opportunity for companies.
As illustrated in Figure 1, personal care products lead the market in revenue contribution, estimated at US$282.80 billion in 2024. Skincare follows closely behind with US$186.60 billion, trailing cosmetics at US$180.40 billion, fragrances at US$59.87 billion, and finally beauty tech at US$8.46 billion. Notably, personal care products exhibit the highest growth potential with a CAGR of 3.6% from 2022 to 2028, while beauty tech shows promising prospects for long-term growth (Figure 2).
In 2024, although there's space for newcomers in the beauty and personal care market, existing players must stay flexible and innovative to maintain their market position. By focusing on core segments, embracing emerging trends like beauty tech, and consistently providing value to consumers, brands can leverage the industry's growth potential and stay competitive. Also, it's evident that as technology continues to advance, the traditional retail experience remains relevant and can complement digital innovations, offering customers a holistic and engaging shopping experience.
Sales of Beauty and Personal Care
Despite the rapid growth of e-commerce as a sales channel for beauty products, offline retail still dominates the market. In 2023, a significant 77.5% of beauty products were sold through brick-and-mortar stores.
While e-commerce is expected to maintain its status as the fastest-growing sales channel, with a projected annual growth rate of 12% between 2022 and 2027, traditional retail channels are anticipated to experience a resurgence post-pandemic.
Examining online channels (Figure 3), the distribution between mobile and desktop devices reveals a consistent trend. While the share of mobile devices is already higher, it is expected to continue growing in the coming years. This trend is not surprising, given the increasing interest in the beauty tech segment and its alignment with
mobile-based experiences.
In terms of the competitive landscape, the beauty and personal care market is primarily dominated by five key players: L'Oréal Groupe, Procter & Gamble Co, Unilever Group, Estée Lauder Cos Inc, and Colgate-Palmolive Co. Their respective market shares for 2023 are outlined in Figure 5.
Regarding brand shares within the beauty and personal care sector, the top five brands are:
Beauty and Personal Care Challenges for 2024
Who to target?
In the beauty and personal care industry, understanding both the hard and soft segmentation criteria of your audience is important to comprehending your brand's characteristics. Why? Because consumers seek beauty products whose brand identity resonates with them.
For example, MAC Cosmetics targets a youthful demographic through its vibrant color palettes, bold contrasts, and intense saturation in both its promotional campaigns and product offerings. In contrast, Estée Lauder focuses primarily on women aged 25 to 55 with significant disposable incomes, appealing to professional women who prioritize skincare alongside fashion. This emphasis on individuality and embracing natural beauty is evident in Estée Lauder’s brand identity. Their unwavering commitment to excellence extends to their pricing strategy, positioning their products at a premium level to attract discerning customers.
Recent research, analyzing 7.5 million individuals participating in over 49 million online conversations revolving around cosmetics and skincare, revealed nuanced trends across different demographics and regions.
While wrinkles dominate beauty discussions among US and UK consumers, Germans tend to express greater concerns about dry skin issues. In France and Spain, the focus shifts to under-eye circles.
What's particularly noteworthy is that before making online beauty purchases, a staggering 90% of consumers prefer to explore retailer websites, often opting for unbranded searches. This highlights the importance of understanding that consumers prioritize product attributes and benefits over specific brand names.
Furthermore, beauty routines vary across different demographics and regions. In Germany and France, Gen Z views beauty rituals as a welcome escape from daily stress, while Millennials, Gen X, and Baby Boomers prioritize efficiency. In the UK, efficiency remains a key consideration across all age groups, while in the USA, Gen Z values self-care moments, with efficiency remaining essential for other age demographics.
Gen Z consumers are particularly discerning, conducting thorough research on product ingredients and benefits before making purchases. They gravitate towards brands that champion sustainability, diversity, and inclusion, while also maintaining an authentic and approachable image that extends beyond product offerings.
The beauty and personal care industry increasingly opens to younger consumers, with many brands introducing products specifically tailored to teenagers. For example, UK-based Snails offers a child-friendly nail range appealing to fashion-forward young enthusiasts. Polish makeup brand Inglot's YSM (Young Skin Makeup) line includes a cream foundation designed for youthful skin, highlighting the industry's focus on meeting the evolving needs of younger demographics.
How to Scale Up?
Although renowned for its high profitability, with EBITDA margins reaching up to 30%, the beauty industry continues to attract new founders and investors due to its lucrative nature, but achieving significant scale-up for new brands remains
a formidable challenge.
While the past decade has witnessed a proliferation of new and independent labels, benefiting from increasingly lower barriers to entry, many struggle to transcend initial success and achieve substantial growth. Among 46 brands established in or after 2005, with global retail sales ranging from $50 million to $200 million by 2017, only five surpassed $250 million in global retail sales five years later, in 2022. Merely two brands achieved global retail sales exceeding $750 million.
To achieve successful scaling, brands must prioritize omnichannel expansion and internationalization. Category expansion proves effective when executed at a certain stage of brand growth, enhancing and safeguarding the brand's unique value proposition. Unique Selling Proposition (USP) plays an important role in standing out amidst competition.
Beauty Trends 2024
Simply Beauty
The beauty industry is undergoing a significant transformation, with consumers increasingly prioritizing efficacy and practicality over elaborate packaging and flashy marketing tactics. This shift underscores a focus on ingredient quality, product effectiveness, and the appeal of simplicity. Rather than being swayed by superficial elements, consumers are now more inclined to seek tangible results as justification for premium pricing.
For many beauty enthusiasts, scientific validation plays an important role in their product selection process. Brands that can offer research, clinical studies, or certifications to support their claims of effectiveness stand to earn credibility and trust among consumers. By showcasing the scientific foundation of their products, brands can instill confidence in consumers, assuring them that their investments yield measurable benefits.
Moreover, there's an opportunity for brands to embrace minimalism and simplicity in both packaging and design. Clean, sleek lines, subtle hues, and refined aesthetics evoke a sense of understated luxury. Brands that adopt minimalist packaging not only project a premium image but also resonate with consumers' desire for streamlined, uncomplicated beauty routines.