Increasing disposable income and changing lifestyles are the core factors that are driving the color cosmetics market. With disposable income arises literacy and higher education which further drives the consciousness of aesthetics and personal care. An epic proportion of investments in advertisement campaigns over social media as well as traditional media which are being increasingly endorsed not only by mainstream celebrities but also by a new breed of social media influencers, which are facilitating the brand visibility to a greater degree resulting in increased brand awareness among the global consumers.
Another driver of the color cosmetic industry is the omnipresence of digital marketing whereby manufacturers are increasingly collaborating with social influencers as part of their business strategy. Moreover, the unrestrained torrent of digital marketing campaigns that consumers all over the world are subjected to irrespective of their internet browsing behavior steers the consumers towards a myriad of eCommerce portals, that influences their consumption patterns as well as meets their demand for color cosmetics concomitantly enabling companies to ensure repeat business.
Essential Oils and Resinoids; Perfumery, Cosmetic or Toilet Preparations, Exports (In Thousands of Us Dollars)
Source: International Trade Centre
Further, the rising demand for products that are derived organically, which in turn is fueled by the increasing awareness of animal welfare as well as of negative externalities to the environment is responsible for driving the global market for color cosmetics in the coming years. Also, the growing awareness of the harmful health effects is steering global consumers to cosmetics that feature the aforesaid attributes. Moreover, the onset of COVID 19 and the following period which witnessed lockdown measures institutionalized by various nations have led to an upswing of engagements that ranges from new ways of the congregation, like that of on-nomi; (????) a Japanese word for online drinking, which was reportedly set up on Zoom chat by a group of women of Japan’s Kanagawa Prefecture to online video conference, cookery shows, fitness, and health, have incentivized the consumers all over the world to revisit how color cosmetics should be employed leading to a further surge in the demand for color cosmetics resulting in the growth of color cosmetics market.
Increasing Global Population and Rural to Urban Migrations Are Poised to Impact the Color Cosmetics Growth
In light of the above the gradual global population growth, along with rapid urbanization and adoption of new trends is anticipated to further drive the need for color cosmetics, in part because of rural to urban migration and the consequent increase in disposable income. This has resulted in a shift away from the traditional way of living and adopting the means of living that are normally endemic to urban areas. In view of the above, it should be noted that 1.7 billion people i.e. around 23% of the world population lived in a city and 45 % of the world’s population resided in rural areas which are expected to fall by 40% by 2030 as per United Nations (UN). Furthermore, the growing female population has led to a higher purchase of color cosmetics in both developing and emerging economies procured through offline and online channels.
Thus, contributing to an increased sale over eCommerce channels which were already to the tune of 25 trillion USD in 2018 and was, according to UNCTAD, equivalent to 30% of the GDP (global gross domestic product) that particular year. The value of B2B eCommerce was $21 trillion I.e. 83% of all eCommerce and that of B2C eCommerce was $4.4 trillion. The top three countries which occupied B2C sales were China, the United States, and the United Kingdom. Further, the estimated cross border B2C e-commerce sales amounted to $404 billion in 2018. The effects of rapid urbanization also translate into the receipt of better education which automatically results in the capacity of high-income generation as well as a conscientious investment in personal grooming efforts through the means of personal care products leading to a surge in color cosmetics among others.
Rural Population (% of Total Population)
Source: World Bank
Emerging economies and promising online retail infrastructure are expected to augment the sales of color cosmetics during the next few years
The consumer goods industry of newly industrialized countries is witnessing an increased presence of online retailers that are facilitating the growth of the cosmetics market apart from factors like the growing middle-income group and the rising population of working women. In the case of China, in comparison with their predecessor’s today’s consumers are seeking out the quickest and the most convenient methods to meet their demands facilitated by the ability to purchase through mobile payment apps like AliPay and WeChat Pay. Besides, global companies with data-driven operations are leveraging consumer preference data, which are obtained from various digital platforms to better understand customer segments and consequently target the same which has driven better placement of products and marketing strategies satisfactorily meeting customer expectations. Moreover, a high degree of competition stemming from data-driven innovations is driving retailers to integrate their brick & mortar stores and online portals with social media marketing platforms. Further, there are increasing investments in launching mobile apps as well as partnering with companies that provide augmented reality (AR) enabled platforms.
Albeit both are strategic initiatives to extend the reach of the organization, the latter has emerged as the most viable endeavor since along with eCommerce capabilities it offers makeover filters and facilitates virtual makeup, successfully converting browsers to shoppers since consumers, in general, are increasingly averse to visit stores and try out various products. To this end certain key market developments like the acquisition of ModiFace a global name in augmented reality and artificial intelligence applications pertaining to the beauty industry, registering over 30 patents, by L'Oréal (Euronext Paris: OR) that was announced in March 2018, which is in accordance with digital acceleration strategy of the organization. As a result of the acquisition, ModiFace was slated to be integrated with L'Oréal's Digital Services Factory and collaborate with L'Oréal's Advanced Research ultimately empowering L'Oréal’s 34 international brands with the most innovative technology. Again in 2018, Coty Inc (NYSE: COTY) had reportedly announced the launch of its app less augmented reality experience enabling a virtual try-on experience available directly in the browser on most modern smartphones featuring full looks from its COVERGIRL's spring '18 collection. After trying out new looks prospective customers could conveniently purchase then new COVERGIRL products that were integral to each beauty look from the featured assortment on Walmart.com with which Coty Inc also reportedly partnered with to extend a seamless shopping experience.