Beauty Industry News Industry News
The beauty industry is experiencing a new era of growth and expansion on a global scale. This market is expected to reach retail sales of US$580 billion (about €533 billion) by 2027, according to forecasts from a study released by The Business of Fashion (BoF) and McKinsey & Company.
According to the study “The state of fashion: Beauty”, this growth will be transversal to all beauty categories, including skin care (skincare), fragrances, make-up and hair, which will grow at an average rate of 6% per year , between 2022 and 2027.
Even so, the skincare segment stands out as the one that is expected to show the fastest growth, being “driven by innovation and consumer demand for products that favor science-based effectiveness”. In this sense, it is expected that this segment will reach sales in the order of 260 billion dollars (239 billion euros) in 2027, compared to the current figure of 190 billion dollars (174.6 billion euros).
According to the report, there are five trends that will shape the future of the industry in the near future: geographic diversification; need for business expansion; merger and acquisition opportunities; influence of Generation Z; and expansion of wellness and personal care.
With regard to geographic diversification, the study predicts that companies in the beauty sector will, in the coming years, look to markets other than the United States of America (USA) and China. In this sense, and although it is expected that these will continue to be the industry’s main markets, other regions should play a more important role in generating revenue, such as India and the Middle East.
Regarding Generation Z, the BoF and McKinsey & Company report warns that brands must “adapt product portfolios, channel mix and marketing strategies to connect with the younger generation of consumers, who prioritize value and effectiveness in the selection of beauty products”. “Generation Z is more loyal than many brands might think. Even when they want to try new products, almost 60% are willing to continue to buy their favorite brands”, concludes the study.
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