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The beauty and personal care industry has always been a stable and reliable industry, but recently, it has especially been on the rise, generating over $625 billion in revenue across the world in 2023. Furthermore, the industry is expected to reach close to $736 billion in global revenue by 2028.
The beauty industry can be categorized into five different segments: cosmetics, fragrances, skincare, personal care, and beauty tech. In terms of revenue, Asia is the most profitable from beauty and personal care products. The massive country is expected to reach over $290 billion in yearly revenue by 2028. Personal care products consist of hair care, bathing products, deodorant, shaving products, oral care, etc., and it is the most popular segment of the industry; currently, the U.S. is leading control of the segment, generating over $90 billion in 2022.
There are many reasons behind the increase in popularity of the beauty and personal care industry as a whole; however, a leading cause is COVID-19. The spike in the importance of physical health during the pandemic also inspired an increase in emphasis on prioritizing mental health and wellness in most countries. Along with this, social media has had a greater influence on the industry, and during the pandemic, while people had more time on their hands, posting reviews became extremely popular, and documentation of those first-hand experiences of how the product works greatly contributed to increasing sales.
Furthermore, the beauty industry's digital presence has grown exponentially since 2020. Many companies have had to adapt to having a large online storefront, and now, when people post sponsorship videos, you can buy the product being showcased with a simple click. Shiseido, a Japanese-based company, has taken it a step further by allowing customers to add items to their digital cart by walking around the store and scanning items they are interested in with a wristband they wear. E-commerce beauty sales quadrupled from 2015 to 2022, and now beauty products make up over 20 percent of the entire e-commerce market. This shift has shown to be successful by the increase massive increase in sales, and as a result, advertising budgets for the beauty industry companies are massive; worldwide, close to $8 billion was spent on beauty advertising in 2022. Additionally, over 34% of advertising is allocated to digital advertising. Additionally, in the past decade, there has been major growth in the e-commerce channel of purchasing, and by next year, e-commerce is projected to replace specialty retail as the most popular channel for purchasing beauty products.
France, South Korea, the United States, Japan, and Germany are the top leaders on the production side of beauty production; they are the top 5 country exporters and together control over 50% of the market. France exports nearly $11 billion of products per year. Some of the top companies in the industry include L’Oréal, a French company producing over $40 billion in sales this year, followed by Unilever (United Kingdom), Estée Lauder and Proctor and Gamble (United States), and Shiseido (Japan).
The United States and Germany are also top importing countries, along with China, Hong Kong, and Singapore. When looking deeper into consumption patterns, consumption per capita tends to be higher in Germany, with 14% of people owning 10 or more products, while the average person owns 3-5 beauty products. Chinese consumers especially value quality, even if it comes at a hefty price; it is very common for them to purchase more luxury products compared to their counterparts in the US, UK, and Germany.
In conclusion, the beauty and personal care industry has demonstrated remarkable resilience and growth, bolstered by factors such as the COVID-19 pandemic, increasing focus on mental health and wellness, and the expanding influence of social media. With an ever-growing digital presence and innovative approaches to retail it will continue to be a profitable industry to keep an eye on.
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