E-commerce-driven beauty industry: a billion-dollar business
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The beauty industry is one of the most valued by millions of people around the world, reaching a growth of 6.8% in 2020 and containing up to 20 different categories, where cosmetics and wellness products are the fastest growing.
Thus, the main drivers of the sector are anti-aging products such as moisturizers, which grew 10.7%, and hair care products, with 8.5% growth. This has benefited due to the rebound of e-commerce, which in 2020 will grow 17%, hand in hand with the pandemic and confinement, according to data from The Logistics World.
In the specific case of Mexico, the beauty industry has reached an estimated value of 7,370 million dollars, according to data from the National Chamber of the Cosmetic Products Industry (Canipec). A person spends an annual average of up to 305 dollars on this type of products.
This is strongly driven by e-commerce, which in 2020 will grow 81% over the previous year, according to figures from the Mexican Association of Online Sales (AMVO).
Trends in the beauty industry
Sustainability, ethics and inclusion
Although it may seem that these concepts are separate, the truth is that they go hand in hand. It is expected that brands that appeal to natural and organic products and that are also respectful of the principles of inclusion and diversity will grow at exponential rates in the coming years.
The pandemic accelerated a process of digital transformation that was already underway, triggering the need for users to shop from home. How can we invest in and take advantage of this trend?
In this channel is the Mexican brand Pai Pai, founded in 2013 and whose profile is 100% animal cruelty-free, in addition to showing men using some of its cosmetic products, and although for the moment women represent the majority of its clientele, male acceptance is expected to continue to rise.
A study by Another Company carried out in several Latin American countries highlights that inclusion is a determining purchasing factor for at least 27% of the people surveyed.
In this way, we can see not only how the beauty industry extends to men, but also that most brands have expanded their catalog with products for all skin types, as well as a wide range of foundation colors so that everyone has the same possibilities of finding their ideal shade.
The rapid aging of the population has led to an increase in demand for anti-aging products, making skin care the most profitable category in the sector, with a market share of more than 35%, according to Statista data.
In this regard, collagen was one of the most acclaimed beauty products during 2020 and sales of supplements based on this ingredient soared 94% as consumers embraced the trend “from within” with supplements from brands such as Dose & Co, Revive, NeoCell and H&B.
As for products made with hyaluronic acid, another important element for skin plumpness, 29% of U.S. customers sought to purchase one.
It should be noted that the skin care category includes not only anti-aging products, but also many others that contribute to general health and wellness.
One example is the French company Gallinée, a specialist in skin microbiomes, which launched a prebiotic toothpaste and a prebiotic-probiotic tablet supplement that dissolves in the mouth for a few minutes. This range of products protects the existing ecosystem of the mouth.
Personalization and omnichannel
Consumers expect brands to understand their needs and provide strategies to meet them, as well as to develop products that are unique. Therefore, one of the priorities of brands is to use technology to better understand the customer and from this provide a better experience.
One example is Glitzi, the Mexican startup founded just in 2018 that has managed to grow 300 percent. The company has a platform for wellness and beauty services at home and seeks to standardize the quality of its services through the certification and professionalization of its coaches.
But if we are talking about personalization, companies should not only focus on a tailor-made product, but also on a tailored experience. The fact is that the new generations are marking an unprecedented change in terms of consumption patterns. The channels of access to beauty products have been amplified thanks to the Internet, and now customers do not need to travel to a store, but have an infinite catalog just a click away.
From virtual stores, showrooms to online testers. Personalized filters and even machines that scan the skin to find the ideal shade of makeup, coupled with social commerce, a key factor in the industry, as it is estimated that 72% of users have made a purchase from a social network.
As we can see, the beauty industry, with all the categories it involves, is a profitable business for the future and, hand in hand with e-commerce, will have a significant expansion in the coming years.
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