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The luxury cosmetics market share is expected to increase to USD 28.22 billion from 2021 to 2026, and the market's growth momentum will accelerate at a CAGR of 7.77%.
The growth of the market depends on several factors such as increased demand for luxury skincare products, growing product launches, and the emergence of omnichannel retail. The market also faces some crucial challenges such as lack of luxury brand penetration in major parts of developing regions, including MEA and APAC, the availability of counterfeit products, and stringent regulations in product formulations, labeling, and packaging.
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Increased demand for luxury skincare products is a key driver boosting the market growth. Some professional skincare manufacturers offer advanced treatments followed by pricier luxury skincare products. Consumers are increasingly concerned about issues like aging spots and acne, making them willing to invest in luxury skincare.
These innovative products use high-quality ingredients, driving product premiumization. With rising disposable incomes, consumers don't mind spending on luxury, especially in skincare. Global luxury cosmetics companies are expanding their skincare offerings. For instance, Shiseido Co., Ltd. sold bareMinerals, Laura Mercier, and BUXOM to Advent International for USD 700 million in December 2021 to focus on high-end skincare brands in the APAC region.Skincare manufacturers invest in innovative ingredients and technologies for healthier, youthful-looking skin. The market is filled with advanced anti-aging products catering to various skin types. Estee Lauder's Idealist Pore Minimizing Skin Refinisher is one such product that addresses texture and wrinkles.
Increasing online retailing is a key trend influencing the market growth. Increased internet access and the proliferation of smart devices have expanded consumer reach to online shopping platforms. Retailers utilize these platforms to broaden their customer base and geographical presence. The convenience of online shopping and enhanced e-commerce security drive the growth of the online luxury cosmetics market.Many mineral cosmetics vendors primarily sell their products through e-commerce sites and are increasingly launching products online. For example, in February 2022, Amorepacific Group introduced its luxury skincare brand, Sulwhasoo, on Tata CLiQ Luxury in India.
Sephora is prominent in both offline and online distribution, while Nykaa E-Retail Pvt. Ltd. focuses on online cosmetic retailing, offering discounts and detailed product information. It's projected that 26.8% of global health and beauty sales will come from online shopping, up from 20% in 2021. The expanding internet user base in developing countries presents substantial market potential for luxury cosmetics, driving demand.
Lack of luxury brand penetration in major parts of developing regions, including MEA and APAC is a key challenge hindering the market growth. Cosmetic product manufacturers face ongoing challenges in establishing effective distribution networks and devising strategic distribution plans. These challenges become particularly complex in the case of luxury beauty products like face oils, primarily available through specialty beauty retail stores, department stores, and occasionally online retailers. Consequently, these two retail formats, along with online channels, serve as the primary distribution partners for luxury cosmetics manufacturers.
The prevalence of department stores and specialty beauty retail stores is highest in developed regions and tier-1 cities such as New York City, London, Shanghai, Tokyo, Rio de Janeiro, and Berlin. Conversely, luxury cosmetics see limited uptake in tier-2 and tier-3 cities in developing regions like MEA and APAC, making it impractical for retailers or vendors to establish a presence there. Furthermore, logistics pose a significant challenge, as many retailers, whether brick-and-mortar or online, struggle to establish robust delivery networks in these areas. The limited access to consumers and low penetration of luxury brands in most parts of developing regions, including MEA and APAC, present obstacles to the growth of the global luxury cosmetics market in the forecast period.
The luxury cosmetics market share growth by the organic segment will be significant during the forecast period. Organic cosmetics and cosmeceuticals are gaining popularity as these products contain biologically active compounds, which have medicinal effects on the skin and are free from toxic compounds that are harsh on the skin. Compounds such as parabens and phthalates, which are extensively used in chemical-based cosmetics, are also known to cause cancer and type II diabetes, due to which organic skin care products and cosmeceuticals are gaining popularity, which will drive the segment growth in the coming years.
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The rising access to online shopping through the internet and smart gadgets and increasing penetration of vendors will facilitate the luxury cosmetics market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The COVID-19 pandemic hampered the growth of the regional market in 2020. The luxury cosmetics market in APAC was adversely impacted owing to the rapid increase in the number of COVID-19 cases, which affected the workforce, raw material supply, intermediate food products, and trade and logistics, leading to demand-supply volatility and uncertain consumer demand in the regional luxury cosmetics market. However, with the introduction of COVID-19 vaccines in 2021 and COVID-19 appropriate behavior, the market is bouncing back with the resumption of production. Thus, the regional luxury cosmetics market is expected to grow positively during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Corp.shiseido- The company offers luxury cosmetics under the subsidiary Lancome Paris.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Luxury Cosmetics Market Scope |
|
Report Coverage |
Details |
Page number |
131 |
Base year |
2021 |
Historic period |
2017-2021 |
Forecast period |
2022-2026 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.77% |
Market growth 2022-2026 |
USD 28.22 billion |
Market structure |
Fragmented |
YoY growth 2021-2022(%) |
7.42 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 51% |
Key countries |
US, Canada, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
CHANEL Ltd., Christian Dior SE, Coty Inc., Kao Corp., Kose Corp., La Mer Technology Inc., Laura Mercier US Buyer LLC, LOreal SA, LVMH Moet Hennessy Louis Vuitton SE, Oriflame Holding AG, Pat McGrath, PUIG S.L., Ralph Lauren Corp., Revlon Inc., Shiseido Co. Ltd., The Estee Lauder Co. Inc., Unilever PLC, and Avon Products Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by Type
6 Customer Landscape
7 Geographic Landscape
8 Drivers, Challenges, and Trends
9 Vendor Landscape
10 Vendor Analysis
11 Appendix
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