Beauty, a subjective term for many, but an exponentially growing business for others, is emerging as the centre of attention for investors in the past few years.
Owing to the media portals, especially digital media across Instagram and Facebook, beauty (makeup and cosmetics) alongside personal care and skin regimes has caught traction. The segment is growing year on year consistently and sales have been increasing proportionately.
By analysing the changing consumer behaviours and presuming the sales for 2023, let’s see how the industry is expected to take shape this financial year.
Talking direct numbers
This sector is assumed to be USD 27.23 billion strong. As per the experts, it is expected to grow at a CAGR (Compound annual growth rate) of 3.86 per cent. This further indicates the pace of growth that is touching 143 per cent.
Globally, this rate is further up by USD 571.1 billion – signifying the penetration and the impact of beauty across international borders. These numbers are anticipated keeping in mind the latest stimuli and response of the target audience, based on recent trends.
The D2C sector soars in 2023
The direct-to-consumer sector is catching people’s attention as more and more customers prefer to connect directly with the brands, without involving third parties. The ubiquity of online mediums allows brands to create direct connections with consumers in more meaningful ways, and this ability has opened the door for a multitude of new entrants to enter the market more easily than ever before. Nearly one-third of beauty e-commerce is captured by such brands. And by personalising the experience for beauty enthusiasts, these labels will help sales to escalate to new heights in 2023.
Change is driven by the psychological & behavioural patterns of consumers
Consumer behaviour has evolved over time, especially in the past two years. There’s been a generational shift, and with the millennials/ Gen-Z forming a major chunk of the population in the country, the beauty industry is forced to depend on them substantially. Now, more than ever, sales are influenced by informed customers seeking need-based beauty products. Another shift is luxurious labels might be less in the spotlight while medium-sized companies are penetrating deeper into the market, making the overall sales of the sector boom.
Influencer marketing continues to grow in importance
As a consequence of the generational shift in online trends and communication, beauty influencers in India are playing a huge part in the expansion and revenue generation of this sector. They are not only influencing their circle but creating credible brand awareness indirectly or directly. They are also pitching people to engage and share beauty products, hacks, trends, brands and much more. Tailoring content and marketing based on contemporary expectations is a smart move to boost sales.
Sustainable beauty to be the star of 2023?
While the beauty industry is growing by leaps and bounds, there are still just a few big players in India when it comes to the clean and sustainable beauty segment. However, consumer awareness is growing and trends are changing as more people make choices that aren’t just good for them, but also for the planet. The clean beauty segment has enormous scope and is more than just a trend; it’s a movement that is here to stay. The big players in the industry recognize this and are trying to make the most of it by shifting their brand positioning. The contribution of the sustainable beauty segment to industry sales is expected to increase substantially year over year.
Although there have been significant economic challenges worldwide and a myriad of changes in the beauty sector, the beauty industry is well known for its resiliency. All the factors mentioned above are contributing to the industry’s growth and thus acting as financial pillars of the industry, making us anticipate a rise in sales for 2023.
Article by Mohit Jain, Co-founder and CEO, Kimirica Hunter International & Kimirica Lifestyle
