Premium Cosmetics Market

SKU: DMFMCG2140 | Last Updated On: Aug 04 2022 | Available Formats

Premium Cosmetics Market Expected to reach a high CAGR of 5% By 2029: DataM Intelligence

Premium Cosmetics Market is segmented By Product (Skincare products, Fragrance, Color cosmetics, Haircare products, Suncare products, Deodorants, Baby care products, Bath products), By Distribution Channel (Offline Distribution Channel, Online Distribution Channel), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2022-2029

Premium Cosmetics Market is expected to grow at a CAGR of 5% during the forecasting period (2022-2029).

Cosmetics are substances or products used to enhance or alter the appearance of the face or fragrance and texture of the body. Many cosmetics are designed to apply to the face and body. They are generally mixtures of chemical compounds derived from natural sources (such as coconut oil) or maybe synthetic. Cosmetics applied to face for improvement of appearance are called makeup, including lipstick, eye shadow, foundation, mascara, blush and bronzer, among other products.

Furthermore, premium cosmetics is a category of the cosmetic industry that costs much higher than regular cosmetic products and can alter or enhance the appearance of the face, the body's texture or scent. Most chemical components in high-end cosmetics are derived from natural sources, although they can also be man-made, synthetic or halal.

Market Dynamics

The global Premium Cosmetics market is primarily driven due to an increase in anti-aging awareness campaigns, rising disposable income and the growing aging population. Moreover, growing consciousness among young and old consumers regarding their physical appearance has fostered the demand for premium cosmetics.

Tremendously improving demand for anti-aging products and long-lasting makeup is driving the premium cosmetics market growth

Skin aging is characterized by a steady decline in the skin's functional abilities due to changes in some internal organs' work and general fitness levels. Skin aging is growing, coupled with the growth of the aged global population. For instance, According to U.S. Census Bureau, more than 54 million adults in the country are 65 years of age or older, making up roughly 16.5 %. Furthermore, according to the 2020 National Commission on Population report, there were be 67 million men and 71 million women aged 65 and older in India by 2021. The senior population is growing at a faster rate than the general population.

The growing population has escalated the demand for various products and the cosmetics industry is among the most popular in recent times. Thus to overcome the aging side effects on the skin, the need for anti-wrinkle treatments has expanded due to the growing customer desire for goods that quickly reduce the indications of aging, including wrinkles, lines, blemishes, frowns lines and pigmentation.

Additionally, the per capita use and spending of skin care products worldwide have been considerably impacted by the promotional techniques employed by various manufacturers. It has been seen recently that the majority of the top anti-wrinkle product firms have started to market their goods as high-quality organic, natural, safe and extremely effective. The growth in anti-wrinkle product demand has boosted the market share of the premium cosmetics industry in return, leading to huge growth opportunities for the product in the forecast period.

High-cost premium cosmetics hurdle the market growth of the product

The high cost associated with premium cosmetics is the major restrain impacting the market growth for the premium cosmetics industry. Studies have revealed that most women spend an incredible US$ 234 annually on cosmetics. Furthermore, that is based on a conservative assessment, considering the buyers of "premium" goods like US$ 100 Chantecaille mascara, US$ 40 Nars lipstick and US$ 50 Benefit highlighter. However, research shows that only 15% of the total product cost goes toward the ingredients. The rest is spent on glossy appeal, marketing and product branding. Thus, due to large-scale investment, few top players are ruling the premium cosmetics market, which creates limited options for the customer to compare the price chart; hence, only the upper middle class can afford the product.

COVID-19 Impact Analysis

The unprecedented COVID-19 outbreak has had a significant negative impact on the premium Cosmetics industry. The sudden arrival of the deadly virus has shown negative effects on the cosmetics industry and hence in return, hurdles the growth of the premium category of the product.

With firms converting to producing hand sanitizers and cleaning supplies and providing free beauty treatments for frontline response workers, the sector has positively responded to the situation. At the same time, the industry's leaders must keep their financial side of the business. Even though the COVID-19 pandemic will have a considerably higher economic impact on brands and stores than any recession, there are indications that the beauty industry may again be comparatively robust. In February, China's sector sales decreased by up to 80% from the same month in 2019. 

The year-over-year reduction in March was 20%, which was a quick recovery under the circumstances. Consumer survey data revealed that they would spend less on beauty products in the forecast period in various markets (largely due to declines in cosmetic spending). Thus the reduction in the overall cosmetic sector has severely hampered the premium cosmetics industry during the 202-2021 period. However, with changing COVID-19 conditions, the market is expected to regain the market growth momentum in the forecast period.

Segment Analysis 

The global premium cosmetics market can be segmented on type, source, gender, distribution channel and region.

The Premium skincare products segment accounted for the majority share in the market owing to escalating demand for face creams and body lotions across the globe, which is expected to impact the market over the forecast period positively.

The global premium cosmetics market is segmented by skin care products, fragrance, color cosmetics, hair care products, sun care products, deodorants, baby care products and bath products. In 2021, the Premium skincare products segment accounted for the majority market share. The escalating demand for face creams and body lotions globally is expected to impact the market over the forecast period positively. 

In addition, the rise in disposable incomes over the past decade coupled with the growth in global economies, changing lifestyles and rising demands for skin and sun care products due to varying climatic conditions encourage the growth of the market for cosmetics. A shift of preference towards natural and organic beauty products, particularly in U.S. and European countries, fosters the growth of the cosmetics market. In 2018, Unilever agreed to acquire 75% of the Italian personal care business Equilibra.

Geographical Analysis

North America accounted for the majority share in the global premium cosmetics market owing to the presence of major players and growing demand for premium makeup and anti-aging skincare products

By geography, the global premium cosmetics market is segmented into North America, Asia-Pacific (APAC), Europe, South America and the Middle East and Africa (MEA).

In 2021, North America accounted for the majority share in the global premium cosmetics market owing to the presence of major players and growing demand for premium makeup and anti-aging skincare products. Understanding the unique needs and characteristics of one's skin and using personalized product formulations to match those requirements has become a crucial trend in the market, which, in turn, has propelled the growth in sales of premium cosmetics in the region.

In Asia-Pacific, countries- like China, India, Indonesia and Vietnam present considerable growth opportunities for the market players, primarily due to the growing millennial population. Furthermore, high awareness regarding cosmetics products, such as facial makeup, hairstyling and coloring products, is expected to drive the market’s growth in the forecast period. The demand for multifunctional products drives innovation, as price-conscious consumers opt for products that provide hydration and skin protection.

Competitive Landscape

The premium cosmetics market is highly competitive with the presence of local and global companies. Some prime companies contributing to the market's growth are CHANEL, Coty, Estée Lauder, L’Oréal, LVMH, Shiseido Company, Limited, Kosé Corporation, Kanebo Cosmetic, Kao Corporation, Revlon, Inc and others. 

The major companies are adopting several growth strategies such as acquisitions, product launches and collaborations, contributing to the global premium cosmetics market growth. 

• In July 2021, The organic skincare firm Refresh Botanicals from Canada announced the opening of its Indian store. Refresh BotanicalsTM, a natural and organic skincare brand first introduced in Canada in 2017, immediately gained popularity across Canadian and U.S. markets.

L'Oréal

Overview: L'Oréal has spent more than 100 years devoted itself to beauty. The Group generated 27.99 billion euros in 2020 and employed 85,400 people globally with its unique international portfolio of 35 distinct and complementary brands. L'Oréal, the largest beauty corporation in the world, has a presence in all retail outlets, including mass market, department stores, pharmacies, drugstores, hair salons, travel retail, branded retail and online shopping.

L'Oréal's strategy is based on research and innovation, with a 4,000-person research team committed to addressing global beauty ambitions. In order to strengthen its ecosystem and create a more inclusive and sustainable society, L'Oréal has established ambitious sustainable development targets for the Group for 2030.

Product Portfolio: 

• Loreal Paris Color Riche Matte Swarovski Lipstick: The product keeps lips incredibly moisturized, silky and smooth. It is a stunning color and is appropriate for any event or style. The intensely hydrating lipstick has a stunning velvet matte texture. The special formulation combines matte gel technology to produce an extreme matte effect with jojoba oil for excellent moisturizing—a rich matte look delivered by highly pigmented color. Jojoba oil moisturizes lips and leaves a silky, smooth finish. It is quite pleasant and non-drying on lips.

Key Development:

• In 2022, Lancôme, a luxury cosmetics brand, was brought back to India by L'Oréal India. The company is considerably closer to Indian consumers than Lancôme due to the popular Advanced Génifique Youth Activating Serum, Teint Idôle Ultra Wear Foundation and La Vie Est Belle Fragrance.

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