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Although in-store shopping has long dominated the beauty sector as the primary way consumers purchase beauty products, the industry is increasingly shifting online. E-commerce is set to represent a quarter of the beauty market by 2027. In this blog, we'll explore the growth of the beauty industry and the key factors driving its expansion.
With e-commerce projected to grow 12% annually from 2024 to 2027, online shopping has become essential for omnichannel retailers. However, traditional channels such as specialty stores, grocery stores and drug stores are also expected to continue growing as many consumers still enjoy discovering and trying products in store.
The global beauty industry continues to grow across all categories and has shown resilience during challenging economic conditions and, indeed crises. Following a strong recovery since the height of the COVID-19 pandemic, the beauty market is projected to reach $580 billion by 2027, with an annual growth rate of 6%.
The beauty industry is rapidly evolving and is expected to undergo significant transformations in product offerings, sales channels, and markets by the end of the decade. Gen Z consumers, in particular, are leading this shift as their perspectives on beauty evolve, along with their views on sustainability, the influence of social media, and the acknowledged importance of self-care.
Along with e-commerce, another significant trend driving this evolution is the rise of ‘premiumisation’. The premium beauty market is projected to grow by 8% annually between 2024 and 2027, compared to 5% for mass-market beauty. Consumers are increasingly willing to spend more on luxury items such as fragrances and make-up.
Moreover, the same research indicates that 42% of consumers in six countries, including the UK and the US, enjoy trying new brands. Shoppers are also purchasing across various price points, with both online and in-store experiences influencing their buying decisions. This growing preference for omnichannel shopping — utilising both digital and physical stores — is prompting established brands to expand their online presence whilst encouraging independent brands to establish physical locations. Major online platforms such as Amazon and Tmall have expanded their beauty offerings, while direct-to-consumer brands are becoming more tech savvy.
The beauty industry is experiencing rapid growth, especially in e-commerce. With increasing online sales and shifting consumer preferences, brands must adapt to stay competitive. Flixmedia’s cloud-based content syndication platform helps brands showcase their rich content on a global scale, improving the online shopping experience for beauty shoppers. To discover how Flixmedia can benefit your brand and enhance your e-commerce presence, schedule a demo today.
https://www.mckinsey.com/industries/retail/our-insights/the-beauty-market-in-2023-a-special-state-of-fashion-report
