Development and business opportunities in the field of cosmetics

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Development and business opportunities in the field of cosmetics

Roman Ustymenko

Owner, Alfa Beauty Group

Abstract

The research is dedicated to a comprehensive analysis of the development and business opportunities in the field of cosmetics. The aim of the study is to delve into the current state and trends of the cosmetology market, thereby determining future business trajectories in line with the existing market dynamics and structure. A methodological approach was adopted, incorporating independent calculations to project the future market structure and volume.

The results of the research shed light on key market trends, both existing and emergent. Detailed insights into the volume and structure of the cosmetology market are provided, highlighting the interplay of e-commerce that characterizes the industry. The study further unravels consumer behaviors, brand dynamics, and the evolution of market structures, particularly in response to global trends. The study identified pivotal trends in the cosmetics domain, spotlighting innovative business opportunities. A marked rise in the male demographic has spurred the launch of men- specific skincare lines, grooming kits, and educational content tailored for men. The dominance of K-beauty is evident, with an influx of products boasting unique textures and formulations, as well as the embrace of beauty gadgets and ingredients intrinsic to Korean traditions. Ethical and transparent purchasing influences are driving the adoption of eco-friendly packaging, open-source ingredient disclosures, and collaborations with ethical brands. While women remain core consumers, product diversification caters to different age groups, and collaborative campaigns with female icons emphasize their central role. Practical implications of the research are manifold. Businesses and stakeholders can leverage the insights to strategize their market positioning, product development, and marketing initiatives. The study offers actionable intelligence, potentially aiding in informed decision-making processes for industry players.

Keywords: cosmetics industry, market trends, digital technologies, consumer behavior.

Formulation of the problem

The dynamic interplay of science, art, and commerce characterizes the cosmetics industry, making it a resilient and continuously evolving field. As societal trends, technological advancements, and shifting consumer preferences mold its landscape, the topic of "Development and business opportunities in the field of cosmetics" emerges as a comprehensive exploration into the heart of the industry.

Central to this exploration is the understanding of the volume and structure of the cosmetology market. Beyond the quantitative facets, there is a keen interest in the qualitative elements that dictate the industry's trajectory. Consumer behaviors, brand positioning, and market structure evolution remain paramount in deciphering the overarching trends.

Furthermore, the cosmetics industry, with its inherent dynamism, responds and adapts to global trends, ensuring it remains at the forefront of consumer demands. Recognizing and capitalizing on the main trends, both emerging and established, is vital for informed decision-making. Business opportunities, strengths and weaknesses, as well as market threats and prospects, will be elucidated to provide a holistic view of the industry's potential.

Incorporating digital technologies into the analysis adds another layer of depth. As digital transformations continue to revolutionize industries across the board, their implications and applications in the realm of cosmetics cannot be understated. The role of these technologies, from e-commerce platforms to augmented reality applications in product trials, will be thoroughly examined to highlight their significance in shaping the future of the cosmetics industry.

Analysis of recent research and publication

The study of the cosmetics market's development, particularly from a scholarly perspective, is not as extensively documented as one might expect. This has necessitated a turn towards statistical websites and industry reports to garner in-depth insights into the topic. Nevertheless, there have been noteworthy contributions by researchers and scholars in the domain that deserve special attention.

Zhang Ya's work in 2021 is an enlightening exploration of contemporary trends within the cosmetics industry, delving into the nuances of marketing techniques in a rapidly evolving market environment [1]. Achim A-L.'s research provides a lens into the changing behaviors of Chinese beauty consumers post-pandemic, revealing the adaptability and resilience of the market [5].

Sviderska et al.'s research in 2023 is of particular note, examining the cosmetic products market in Ukraine, while attempting to identify the underlying factors influencing market trends [6]. Similarly, Parkhomenko's study elucidates the trends shaping both the global and Ukrainian cosmetics markets, marking it as a crucial read for anyone looking to understand regional dynamics [7]. Lebedynets and Kazakova's research delves deep into the prevailing trends in Ukraine's cosmetics products market, offering a granular look into the region-specific shifts [9].

Kim and Park, in their 2020 study, tackle the intriguing domain of crossnational market segmentation, specifically focusing on the Korean Wave's influence in ASEAN countries, highlighting the importance of cultural dynamics in market strategies [8].

The Watanabe's research investigates the intricate world of social media networks of cosmetic brands. Their social network analysis, especially in the context of domestic and international retailers, provides unique insights into the power of digital interconnectivity in the modern cosmetics market [10].

Despite the extensive literature in the field of cosmetics, several areas remain underexplored. Key among them is the in-depth analysis of sustainable and ethical production in cosmetics, the intricate psychographics of consumers beyond broad market trends, the integration of emerging technologies beyond e-commerce, the unique dynamics of nascent markets, and the evolution of brick-and-mortar establishments in a post-pandemic world.

The purpose of the study is to investigate the current state and trends of the cosmetology market and determine the directions of business development, taking into account the current dynamics and structure of the market.

Presenting main material

business cosmetics trends

In 2022, the global cosmetics market has reached a valuation of $443.5 billion, showcasing the robust nature of the industry. The most significant contributor to this value is the skincare segment, which stands at $172.9 billion. This dominance underscores the global emphasis on skin health, preventive care, and the pursuit of aesthetic appeal. Hair Products, with a valuation of $93.1 billion, emphasize the multifaceted approach to hair care, ranging from its health to its aesthetic representation, resonating with both functional and stylistic consumer needs. The Make-up segment, valued at $84.3 billion, reflects not just the aesthetic desires of consumers, but also cultural, social, and sometimes even political expressions. The 'Other' category, encapsulating various products, is valued at $93.2 billion, highlighting the diversity of consumer needs and the industry's adaptability.

Given the consistent growth trends observed from 2019 to 2022, it's evident that the market is witnessing a compound growth pattern. By projecting this rate of growth forward, by 2027, the cosmetics market is anticipated to reach an impressive $573.9 billion. Within this, the skincare segment will potentially breach the $223.8 billion mark, reiterating its dominance in the market landscape. Hair Products and Make-up segments are also poised for substantial growth, with anticipated valuations of $120.5 billion and $109 billion, respectively, by 2027. The 'Other' category is projected to match this growth, reaching an estimated $120.6 billion [2,3].

Fig-1- Global cosmetology market development forecast Note: Author's calculation

Examining the primary trajectories of the cosmetics market evolution, we first recognize that women remain the pivotal consumer base. Their beauty rituals, spanning from skincare to make-up, have fortified the cosmetics industry's foundation. However, it's the rise of the male demographic that's turning heads. While women's consumption patterns remain relatively established, men grapple with determining optimal skincare and grooming routines, signaling a potential market education gap [4].

The influence of K-beauty trends cannot be understated. Hailing from South Korea, these trends emphasize skin-first approaches, layering techniques, and innovative ingredients, which resonate with consumers globally. Their dominance has paved the way for holistic beauty routines and introduced unique textures, formulations, and packaging designs to the market.

Lastly, delving into consumers' purchasing behaviors, it's evident that decision-making is no longer solely based on product effectiveness. Ethical considerations, ingredient transparency, brand values, and sustainability are increasingly under the spotlight. Brands aligning with these consumer values and emphasizing a holistic approach to beauty and wellness are more likely to foster loyalty and drive sales.

As the cosmetics industry continues to flourish, staying attuned to emerging trends and capitalizing on the inherent business opportunities can give brands a competitive edge. Table 1 shoes more detailed exploration.

Table 1

Business opportunity forecasting based on key trends in the cosmetics market [1,6]