The beauty and personal care industry driven by a demand for cosmetics and skin care products is undergoing radical change. The industry has been thriving as a result of technological and product innovations, in addition to high-profile mergers and acquisitions, the introduction of virtual try-on, and the rise of online marketplaces.
Personal care products, cosmetics, and even aesthetically pleasing makeup have a long and storied history in India. A growing number of domestic and international manufacturers have gradually expanded their presence, and the Indian beauty and retail market as a whole has seen newer products introduced over the years as a result of the heavy influence of western trends plus the growth of Indian entrepreneurs.
The rising number of working women, shifts in consumer preferences, and higher disposable incomes are all contributing to the sector's rapid expansion. In 2018, the global market for skin care products was estimated at $134.8 billion, and it is expected to grow at a CAGR of 4.4 percent till 2025, demonstrating the rapid expansion of the global cosmetics market. Zion Market Research predicts that by 2024, the global beauty industry will be worth $863 billion.
The demand for premium products is growing in India as Indian consumers are moving from functional products to more advanced and specialized cosmetic products. Although the market is highly saturated, it is still one of the best investment bets for market players as consumers understand the need to look flawless. But the rising priority placed on health is inspiring new developments in industry and commerce. The increasing interest in sun protection items like sunscreen, lotions, and face creams along with products like liquid collagen is also contributing to the upbeat outlook. Skincare accounts for about 45 percent of the personal care market.
Naturally-derived ingredients from plants and other natural sources are becoming increasingly popular in the skincare industry. These products are favored because they effectively transport the antioxidant benefits of superfoods without irritating the skin. As a result of the global fallout from the pandemic, many shoppers started giving ethically sourced, packaged, and manufactured goods more thought. The market for natural and organic cosmetics is expected to grow to $22 billion by 2024. The modern consumer, empowered by digital technologies, is savvy, environmentally conscientious, and picky about the brands they support.
Improved Product Knowledge
The level of product knowledge among consumers has undoubtedly increased. Consumers today pay more attention to the information about who and what a product is meant to serve than they do to the marketing strategies used to sell it. Well-informed consumers prefer products that adhere to scientific principles. It's also changing because companies have started making everything from face washes and moisturizers to eye creams, face masks, sunscreen, and even makeup for men, who were previously ignored by the beauty industry. These products are available in ever-expanding varieties, and they all seem to have reworked packaging and distribution to win over a younger audience.
The belief of the next generation in a non-binary gender classification has prompted the cosmetics industry to adopt gender-neutral makeup lines to be more accepting of all people. There are a lot of new products out there that don't make any effort to target a specific gender. Unisexual products that are designed to meet the needs of both sexes are replacing the once-popular practice of marketing to a specific gender.
Moving Beyond Metros
While it's true that the global pandemic has slowed the country's cosmetics industry's development, the widespread growth of the digital and manufacturing sectors has led to a booming demand for cosmetic products that isn't confined to metro and mini-metro urban centers. Considering how rapidly e-commerce has grown, several fresh, cutting-edge companies have sprung up to meet consumer demand.
The beauty industry has continued to thrive, albeit at a slower rate, despite the difficulties caused by the pandemic. The personal care market in India experienced an immediate boom as a result of the country's improved standard of living, with Euro monitor international projecting 9.7 percent annual growth between 2018 and 2023 before the pandemic struck. The preferences of consumers have shifted significantly over the past two years, with an increasing preference for online shopping as a result.
There has been a rise in the demand for the on-demand delivery of highly customized goods and services. A lot of people have different skin tones, hair textures, and preferred fragrances, so there's a real demand for customized cosmetics in the health and beauty industry. The success of cosmetics and hygiene product manufacturers depends on their ability to provide a unified, personalized, and convenient omnichannel shopping experience.
Brands need a quick capture of newly formed consumer expectations and shifting behaviors and an effective response to the evolving market if they are to remain competitive and have economies of scale. The expansion of consumer-friendly e-commerce options like clickable brand websites and social media platforms for advertising personal care products can only be good for business. The digitization of customer approach channels allows for the capture of new customers and the provision of a great customer journey to existing ones.
Understanding of Self-Care
Younger generations like Gen Z, who are acutely aware of social and environmental issues, will have a profound impact on the future of the personal care industry, which will become more proactive, mindful, and motivated toward well-being. The cosmetics business could not be in a better position right now. The self-care segment of India's beauty market is growing rapidly. There has been a recent uptick in the number of consumers actively seeking a more long-term, eco-friendly, and holistic beauty routine.
Due to increased global awareness and exposure, consumers have taken an ethical approach to their habits. These days, a product's ingredients are where the action is in terms of establishing its worth. This bodes well for those who are conscious of their beauty products, whose popularity we can expect to soar. The emphasis has shifted from superficial improvements to more fundamental ones like self-care, hygiene, and security.
Consumers' heightened sensitivity to the quality of the goods they purchase and the reputation of the brands they favor play a significant role. It's not just about the item itself, but also about the history of the company. Healthy and environmentally friendly alternatives that don't break the bank have become a top priority.
Looking further into the future, we can also anticipate that cosmetics will serve dual purposes as skincare products. Hybrid cosmetics with skin benefits are a growing beauty category that is expected to explode next year, according to a recent Mintel report. Cosmetics with skincare benefits are a hot commodity, and both indie and mainstream brands are racing to be the first to market.
There's potential for growth in the personal care industry, but it'll have to adjust to meet consumers' shifting tastes. Data-driven customization can help make the strategy more customer-centric and responsive. As the cosmetics industry takes the lead in advocating for diversity and inclusion, we can expect to see a meteoric rise in the popularity of organic and all-natural products going forward.