The skincare industry is expected to reach $180 billion, an increase of over 30%, in the next five years
The cosmeceutical industry is raging with profits nowadays. With rising disposable incomes, growing awareness of new products, the emergence of e-commerce beauty sites, etc., the beauty industry is defying gravity.
Since the last few years, the make-up industry has been driving the growth wagon. However, the industry has witnessed a recent shift from make-up to skincare. While colour cosmetics (foundation, creams, powders, lipsticks, and other colour-based makeup) are still popular with young people, it’s facing stagnation. However, skin care in the real sense has just started and is registering exponential growth.
Long gone are the days when skin care was limited to face washes, moisturizers, and cold creams. Now, the skincare industry has adapted to personalisation, and there is a product available for every skin type, colour and for various other concerns related to the skin. The market is segmented into various products such as serums, night creams, anti-ageing, toners, masks, sheet masks, etc, targeting all age groups and skin types.
Growing awareness about one’s looks and skin quality, the increase in spending power are driving demand in the global skincare market. Moreover, the omnipresent polluted environment and the busy lifestyles are affecting the quality of the skin, this has also surged the need for quality skincare.
The global skincare market was valued at nearly $135 billion in 2018, increasing by nearly 60% in the past 10 years. It is projected that the skincare industry will reach $180 billion, an increase of over 30% in the next five years.
Millennials are Augmenting the Industry
In today’s economy, almost every other industry is targeting the millennials, as they are the potential buyers. Millennials are the top growth drivers of the cosmetics industry, but with emerging trends and the recent shift from make-up to skincare, millennials are now investing in the latter. In fact, they are the largest segment of buyers of skincare buyers. A desire for “dewy” skin has likely been prompted by the Instagram selfie phenomenon, which has eventually led to an increase in demand for skincare.
Major Players Venturing into Skincare
The potential of the industry can be witnessed by this fact that major industry players are now venturing into skincare, or expanding their skincare range. The growing trend towards clean and flawless skin, which is becoming fashionable, is propelling the beauty majors to bring out variety in a skincare range.
Recently, beauty mogul and Forbes’ youngest self-made billionaire, Kylie Jenner, is all set to launch her skincare range “Kylie Skin”. Jenner’s move to dip into the skincare industry further accentuates the potential this industry holds.
Paying More for a luxurious Experience
People’s obsession with healthy skin can be witnessed through the fact that they are willing to pay more for a luxurious skincare experience. Skincare is available in different ranges, but a lot of people are opting for the best since affordability has gone up with rising disposable incomes. Big players have registered a huge spike in the growth of their skincare category. For a luxury brand, Estée Lauder, skin products brought in $1.7 billion in sales̶ up by 16%̶ in its latest quarter. The sharp spike was due to the stellar sales of prestige brands like La Mer, Estée Lauder, and Clinique.
In fact, it is said that when it comes to premium and luxury products, people are willing to pay more for skincare rather than make-up.
E-commerce Offering the Opportunity to Explore
The increasing use of online platforms to reach out to a wider consumer base has brought about exponential growth in the global skincare market. Savvy companies and distributors are fast shifting to e-commerce platforms to boost sales.
The easy availability of the products online offers the freedom of exploring and trying out new products before making the final purchase. People are enjoying new products and finding new brands on different portals and reading reviews of existing customers before making up their minds. This is part of a larger generational shift of younger consumers rejecting the brands their parents preferred and seeking out locally-made, artisanal and natural products across consumer categories.