The beauty market Part 2: development, trends, and forecasts

3. Natural cosmetics as a factor of the future

The market for natural and organic cosmetics is growing and there is no end in sight. On the contrary: Elfriede Dambacher, consultant and expert for the natural cosmetics market, reports at the 11th Natural Cosmetics Congress in Berlin in 2018 that the cosmetics market has developed very dynamically in the last twelve months.

While conventional cosmetics in Germany largely stagnated in the first half of 2018, the natural cosmetics market grew by 3.1% in the same period despite falling average prices. According to Dambacher, more and more new customers are turning to natural cosmetics, whereby the drugstore still the dominant channel is. Discounters have also become a dominant factor in the market in recent times. As an example, Dambacher called the permanent listing of the discounter Aldi’s with its own certified natural cosmetics brand. [1]

According to a new report from Grand View Research, Inc., it has been announced that the global organic personal care market is projected to reach $ 25.11 billion by 2025.

The reason is that the demand for organic skin care, hair care, and colour cosmetics is constantly growing while consumers are looking for natural and organic labels. [2]

According to Persistence Market Research (PMR), the global market is expected to reach $ 21,776.9 million by the end of 2024. These figures indicate an average growth of 8-10% per year. [3] The forecasts indicate that the market for natural cosmetics is developing positively and that we can certainly look forward to many great new products in the near future.

4. The influence of e-commerce on the cosmetics market

The beauty industry is undergoing constant change. The biggest market shares, as well as the brand awareness and trust of the customers, belong to the big world-famous cosmetics companies. Gyan Research and Analytics has analyzed the biggest key players in the market. [4] Other studies[5] are investigating the young beauty companies and find that they grow four times as fast as established cosmetics giants, namely by 15.7 percent and thus have captured a market share of 10 percent in the global market. [6]

Most of them started as online businesses and have reached a broad audience through strong social media presence and sophisticated digital strategies. The huge success of young cosmetics companies is due to their digital know-how.[7] In 2015, the online retail of beauty products accounted for a total of 6 percent of sales worldwide and grew by 20 percent. According to A.T. Kearney, online cosmetics retail will grow by 8 percent by 2019. In Asia (mainly Japan, South Korea, and China), online beauty retail is also very successful. This is confirmed by the percentage of sales: 68% of which were carried out on the Alibaba Singles Day (11^th November, yearly) alone via smartphone.[8] The German online cosmetics market is also showing an upward trend. As can be seen from the available statistics, the revenue share of e-commerce in the cosmetics sector accounted for around ten percent of total sales in the cosmetics trade. [9]

Stationary, established cosmetics manufacturers are forced to rethink their strategies and buy up young successful cosmetics providers as Douglas. In 2018, the market leader in the beauty sector acquired the majority in the perfumery chain Akzente and their successful online shop parfum dreams. [10]

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[1] Gschwind, S.: Natural cosmetics as a future market (2018)  (Stand: 17.05.2019)

[2] Grand View Research: Organic Personal Care Market Size Worth $25.11 Billion By 2025 (Stand: 19.05.2019)

[3] Persistence Market Research: Global Natural and Organic Personal Care Products Market is Expected to be Valued At US$ 21,776.9 Mn by the End of 2024 (Stand: 18.05.2019)

[4] Gyan Research and Analytics. Global Beauty Care Market (2014-2018). Procter & Gamble, Kao Corporation Limited, Unilever PLC, Henkel AG & Co. KGaA; Emami Limited, Marico Limited, Oriflame Cosmetics S.А., L’Oreal S.A, Avon Products Inc, Revlon Inc, Colgate-Palmolive Co, Hypermarcas S.A, Johnson & Johnson, Beiersdorf AG, Estee Lauder Companies INC, Shiseido Co Ltd, Natura Cosmeticos S.A, Amorepacific Corporation, Kose Corp, Elizabeth Arden Inc, Reckitt Benckiser Group Plc, Fancl Corporation, Coty INC- CL A, Noevir Holding Company, Lion Corporation Limited, Ales Groupe, Steiner Leisure Limited, Coreana Cosmetics Co Ltd, Energizer Holdings Inc, Dabur India Limited

[5] Marktanalyse: Die Beauty/Branche im Umbruch  (Stand: 18.05.2019)

[6] Marktanalyse: Die Beauty/Branche im Umbruch  (Stand: 18.05.2019)

[7] Marktanalyse: Die Beauty/Branche im Umbruch  (Stand: 18.05.2019)

[8] Lengow: Onlinehandel von Kosmetik-Produkten und das neue Shopping-Verhalten (Stand: 16.05.2019)

[9] Statista:  Entwicklung der Umsatzanteile im Online-Handel mit Kosmetik in Deutschland in den Jahren von 2015 bis 2017  (Stand: 15.05.2019)

[10] https://webdata-solutions.com/2018/06/19/marktanalyse-die-beauty-branche-im-umbruch/