Premium cosmetics are manufactured by utilizing certain specialty ingredients. These cosmetics are usually accompanied with some value addition such as organic ingredients including essential oils, plant extracts, microalgae, and pearl extracts. These products usually cost higher than other ingredients and thus are responsible for the high price of premium cosmetics. Premium products are made using organic ingredients such as essential oils, plant extracts, microalgae, and pearl extracts, which usually cost higher than other ingredients.
Increasing beauty consciousness among the populace in emerging economies is boosting growth of the premium cosmetics market. Increasing inclination of males towards overall body care coupled with social trends related to beauty and cosmetics, is also fueling market growth. According to Coherent Market Insights, the men’s grooming products sector is expected to witness significant growth, exhibiting a CAGR of 8.91% over 2018 and 2025. A major challenges faced by the premium cosmetics market include strict regulations regarding chemical ingredients used in premium cosmetics.
Global Premium Cosmetics Market – Market Taxonomy:
On the basis of distribution channel:
- Specialty Stores
On the basis of product type:
- Skin Care
- Hair Care
- Hygiene Products
Among distribution channels, the online segment is expected to garner significant traction over the forecast period. Growing online retail around the world is responsible for growth of this segment. According to India Brand Equity Foundation Report (IBEF), in 2016, over 62% of young consumers in major economies prefer online stores for buying beauty & grooming products. Moreover, ease of access and reliable services of giant online retail stores such as Alibaba Group (China), Amazon Inc. (U.S.), and Flipkart (India) play a major role in growth of the online segment.
Among product type, the skin care segment is expected to hold the largest market share over the forecast period. Leading market player such as L’Oreal S.A. generated 37% of its annual revenue in 2017 from its skincare segment. The company has identified the segment as a high growth segment and launched multiple products to boost its sales. Multifunctional products, which incorporate the properties of different products such as skincare, make-up into one are gaining significant traction. For example, Dior’s lip care product Color Reviver Lip Balm is designed to serve as both lipstick and lip gloss. Such products have piqued consumer interest and are projected to be a major driving factor for the premium cosmetics market.
Global Premium Cosmetics – Market Outlook:
North America is expected to account for the largest market share in the global premium cosmetics market during the forecast period (2018-2025). The market in the region is supported by stringent regulations imposed on the use of harmful chemicals in cosmetics. For instance, various regulatory bodies such as United States Department of Agriculture (USDA) and Food and Drug Administration (FDA) are restricting the use of harmful chemicals in cosmetic products. For example, chemicals such as formaldehyde and hydroquinone which are banned in few countries around the world.
In Asia Pacific, a thriving retail sector will boost the market for premium cosmetics. According to Indian and Chinese government sources, the retail sector in India and China was valued at US$ 950 billion and US$ 11 trillion, respectively in 2017. Furthermore, growing urbanization in emerging economies in the region is expected to boost the market for premium cosmetics in the region. According to L’Oreal, China recorded US$ 77 spending per capita per person on cosmetics in 2016 with US$ 71 by consumers aged 14–18 years and US$ 85 by consumers aged 19–24 years. Increasing number of company are seeking investments in these countries due to high growth potential, this in turn, is increasing growth of the market for premium cosmetics in the region. For instance, L’Oreal’s invested in an acquisition of Magic Holdings International Ltd., in China in 2013, while it invested over US$ 150 million in India since 2011. In 2016, Coty Inc. completed a merger with the Specialty Beauty business of Procter & Gamble Company.
Major players operating in the premium cosmetics market include L’Oréal S.A., Avon Products Inc., The Procter & Gamble Company (P&G), Unilever plc, Oriflame Holding A.G., Revlon Inc., The Estee Lauder Companies Inc., Shiseido Company Ltd., and Coty Inc.
- In October 2019, Burberry Group PLC, a Britain-based luxury fashion product manufacturer had launched a line of premium perfumes for women.
- In September 2019, Asquan Group, a manufacturer of applicators, cosmetics, accessories and packaging solutions for beauty & cosmetics brands in partnership with Pylote had launched antimicrobial makeup and mascara brushes at MakeUp in NewYork trade show.
- In September 2019, Beiersdorf AG, a German consumer goods manufacturer had launched a skincare brand for tattooed skin. This new product range contains INKGUARD-Technology® to maintain tattoos on the skin for long.
- In May 2019, Kylie Cosmetics had launched its new line of products – Kylie Skin, which offers vegan skincare products.