Recovery from the pandemic has already begun and the future seems to be smiling on the Beauty industry. The target is set at US$616 Billion turnover by 2025, a 5% average annual increase compared to the US$483 Billion registered in 2020
Analysts say that the e-Commerce boom and the tendency of individuals to increase their personal expenditure on beauty products will lead to a market rally, with exciting predictions that foresee Europe at US$28 Billion in 2024, thanks mostly to the sales of subscription boxes that should reach US$875 Million by 2024
In the continent (according to Cross Border Growth Capital).
E-commerce is expected to grow 5 times more than traditional channels and is becoming fundamental for anyone wanting to take advantage of the sector’s rebound.
From a global point of view, Asia still represents the biggest beauty market (38%), followed by Europe (24%) and the United States (18%). Among the European States, we have Germany that leads the region with US$14.9 Billion, followed by UK at US$12.9 Billion and France in third position on US$12.5 Billion. Italy and Spain, which are still less digitally-oriented are worth about 50% of the German market but offer more opportunities for new arrivals into their markets, as development space is still available with reasonable advertisement investment.
Browsing through market categories we see that the most important segment in 2020 was personal care products with a gross value of US$215 Billion (45%) and that is due to reach US$285.5 Billion by 2025. The skincare sector follows with US$169.2 Billion (27%) and in third position the general cosmetics that represent 18% of the global beauty market but is the most promising in the medium range: the forecast talks about the growth of 6.4% in the next five years to reach US$118.5 Billion by 2025. Fragrances have a minor impact with a share of 10%
A new trend on the international market is that of the Subscription Box, an idea coming from the USA based on a recurring delivery of niche products as part of a marketing strategy and a method of product distribution. Subscription boxes are particularly suitable for beauty products as they offer a convenient selection of products (delivered monthly or quarterly) to the clients that pay in advance a “Subscription” allowing brands to count on a positive cashflow.
In Europe, Germany is number one also in the sales of subscription beauty boxes with 120.27 Million Euros in revenue; the UK follows with 93.74 Million Euros and France with 75.77 Million Euros.
Great expansion is registered in the Spanish and Italian markets where growth of about 36% is expected over the next 4 years.