We may be entering into 2023 faced with global economic uncertainty, but as indicated by past recessions – beauty is resilient.
2023 growth in beauty & personal care
The global beauty and personal care industry will generate $571 billion worldwide in 2023, marking an 8% year-over-year increase (Statista).
cosmetics will see the second-largest annual growth in 13 years
The global cosmetics market is set to hit $103.8 billion in 2023- a staggering 11.6% year-over-year increase. Per Oberlo, Cosmetics serve as the third-biggest revenue-generating category in the global beauty market, making up 18.2% of the beauty industry’s total revenue in 2023, behind personal care and skin care, which hold 44.4% and 27.3% of the market share, respectively. The global hair care market is also on the rise due to consumer demand for personalized and chemical-free products that cater to their individual needs. Haircare was valued at US$ 82.3 Billion in 2022 and is expected to have a CAGR of 4.4% during 2023-2028 (imarc group).
growth in online shopping and social commerce
In 2023, the industry will also experience continued growth in online shopping and a rise in social commerce.
In 2023, US shoppers will spend close to $24.5 billion on beauty/cosmetics online alone, and US retail social commerce sales will increase 63.3% between 2022 and 2024, to $86.7 billion
Social media platforms, not search engines, are fast becoming the preferred way for younger consumers to start their purchase journey. From discovery and inspiration, to purchase, consumers are gravitating towards social platforms such as TikTok and Instagram.
the lipstick index; consumers will continue to indulge in beauty products
The resilience in this industry in the face of current economic stress could be attributed to the lipstick index, a concept brought forth by Leonard Lauder, chairman of Estee Lauder. Lauder observed that after historical events such as the Great Depression and 9/11, cosmetic sales rose in contrast to the state of the economy.
The lipstick index maintains that consumers will indulge in discretionary purchases that provide an emotional uplift without breaking their budget. In this case, they tend to buy small luxuries such as lipstick and other beauty products instead of more expensive luxury items such as jewelry, apparel, and other accessories. This is largely due to the “feel good factor” – when we are on a budget, we will typically indulge in something that makes us feel good.
quality products will reign supreme
Overall, this is great news for brands in the beauty & personal care industry, but they’ll need to note that in 2023 consumers will be a bit savvier about where they spend their hard-earned money and will have a discerning eye for quality products.
As we see trends emerging that glorify having a few of something great – whether it be building a wardrobe full of quality basics or having a skincare routine made up of a small number of high-quality products, it will be more important than ever in 2023 for brands to innovate and prove the quality-for-cost of their products to stand out from the competition and gain new or retain existing consumers.
Interested in opportunities to help your brand stand out in 2023? Download our report, 6 trends that will define beauty marketing in 2023, to learn more.