MARKET OUTLOOK

The global active cosmetics market size was estimated at USD 8.25 billion in 2021 and is expected to reach 16.85 billion in 2027 with an estimated CAGR of 12.64% from 2022-2027. The market's healthy growth is attributable to the surge in the adoption of cosmetics formulated with active ingredients. The major driving factors of market growth are the growing awareness of skin care, higher disposable income, and a significant increase in the number of customers choosing natural and organic skin care products. People suffering from various skin and hair problems are focusing on adopting organic cosmetics, as these are derived from natural sources and are free from various harmful chemicals. Active cosmetics are personal care products that are either formulated/highly concentrated with active ingredients or is 100% active ingredient. The most common ingredients in active cosmetics include hyaluronic acid, vitamin C, vitamin E, and many more.

Consumers prefer active cosmetics for skin and hair care, which are readily available through various distribution channels, including pharmacies, drugstores, and many other channels. COVID-19 crisis has slowed down the growth active cosmetics market globally because of closed operations and, shortage of labor & supply chain blockage. Thus, online channels made it easier for several manufacturers to maintain a pace in sales and distribution. In the last few years, consumers have relied on online platforms for cosmetics shopping, which is also attributed to low cost or discounted prices and the COVID-19 pandemic. Hence, online sales channels have shown significant growth in terms of revenue during the COVID-19 pandemic and post-pandemic as well. Furthermore, the active cosmetics market in the APAC region is growing at the highest pace due to the rising population and increased awareness.

DRIVING FACTORS

• Rising consumer awareness among consumers regarding the adverse effects of synthetic counterparts

• Growing demand for natural and organic ingredients formulated cosmetics

• Increasing demand for skincare products

• A surge in demand for organic and natural beauty products

• The growing interest of male consumers in grooming and grooming-related products

SEGMENTATION INSIGHTS

INSIGHTS BY PRODUCT
Liquid active cosmetics is the dominating product type category in the global active cosmetics market, accounting for the highest market share of 58.67% in 2021. It is attributed to growing skin, hair, and body care that helps liquid products glide effortlessly on the skin and is the most preferred product type worldwide.

A wide range of global, regional, and local players offer a diverse range of active liquid cosmetics holding a dominant share in liquid products. The liquid segment is expected to grow at the highest CAGR of 12.94% during the forecast period. Cream-based active cosmetics is the second leading segment, with a market share of 29.55% in 2021. Cream-based products are preferred as they are needed in minimal quantity and have good blending properties on the skin. It also reduces the number of products in makeup bags. Other segments, including powder, bar, wax, or emulsion cosmetics, account for the third largest share. The growth is contributed by the population with dry skin. It is used mainly in makeup products as compact to give coverage to the face, concealing blemishes and discoloration. Therefore mostly used as a light coverage foundation. In addition, some companies such as L’Oréal, Croda International, Givaudan, and many more are now offering shampoos in the form of the bar to reduce water consumption and make it convenient while traveling to avoid the spilling of liquid body care products.

INSIGHTS BY GENDER
The female segment is the fastest growing segment, with the highest market share of 67.75% in 2021, and is expected to grow faster CAGR of 12.79% in the global active cosmetics market. This is because females are the primary consumers of body care and makeup products. The growing interest in skincare and organic & natural cosmetic products are the major driving factors for active cosmetics market growth in this population.

On the other hand, male consumers are also witnessing a growing interest in using cosmetic products for skin, hair, and body care. Among males, heterosexuals are the leading segment driving the active cosmetics market growth. APAC industry is one of the fastest-growing regions for men’s grooming and cosmetic product use.

INSIGHTS BY APPLICATION
Skincare is the fastest-growing segment under the application section, accounting for the highest market share of 47.27% in 2021. This is attributed to the growing awareness for health-promoting and self-care products and the ever-increasing aging population. Moreover, the omnipresent polluted environment and busy lifestyles also affect skin quality. Further, the increasing awareness of the side effects of synthetic chemicals in synthetic cosmetics, such as parabens, sulfates, and other toxic ingredients on the skin, has been attracting consumers to opt for active cosmetics in recent years. Thus, the growing demand for clean and toxin-free skincare beauty products is attributed to the skincare segment growth in the global active cosmetics market.

A number of both global and regional companies and distributors are fast shifting to e-commerce platforms to boost their sales as it is the best platform for consumers to easily access the desired product at a cheaper and discounted price. L’Oréal, Croda International, Givaudan, Shisheido, and many more offer a wide range of active cosmetics for skin and hair care. The hair care segment is the second largest growing segment in the application segment accounting for the share of 25.17% in 2021, attributed to growing interest in hair maintenance to improve hair quality and volume, reduce hair damage, and style the hair.

INSIGHTS BY DISTRIBUTION CHANNEL
Drug stores/pharmacy accounts for the highest share of 35.63% under the distribution channel segment in the global active cosmetics market, which is attributed to growing attention toward buying certified and safe cosmetics. As pharmacy products have proven effective, hence consumer’s first option is the pharmacy. Moreover, rising interest in cosmeceuticals and dermo-cosmetics to improve the skin and hair quality and overcome skin and hair problems such as skin scars, pimples, dandruff, scalp infections, and many more have thus highly contributed to the highest share of drug stores. 

During the COVID-19 crisis, the pharmacy segment witnessed a fall compared to pre-pandemic and e-commerce or online distribution channels due to lockdown worldwide and supply chain blockage. However, post-pandemic, the segment retained its pace and is now in a solid position to continue to drive beauty and personal care. In 2021, the online segment accounted for the share of 22.90%in the global active cosmetics market. An online channel brings various benefits to manufacturers and customers, such as lowering the number of brokers and distributors, cutting product prices, and being easily accessible with a wide range of product options.

GEOGRAPHICAL ANALYSIS

APAC accounts for the largest share of the global active cosmetics market and is expected to grow at the highest CAGR of 14.33% and holds about 35.10% market share. A steady rise in disposable income among consumers and an increasing focus on organic and natural cosmetics drive the active cosmetics market in the Asia Pacific. China and Japan are the leading countries with high demand for active cosmetics. China is the leading APAC region, with the highest market share of 22.35%. It is expected to grow at the highest CAGR of 15.65% during the forecast period, attributed to the increasing aging population and their primary focus on natural ingredients for skin, hair, and body care.

The U.S. is the leading active cosmetics market, with the highest revenue of USD 1.83 billion in 2021, followed by China and Japan. The United States is the world's most valuable beauty and personal care market due to increasing per capita expenditure on personal appearance, robust regulatory framework, a high penetration rate of global brands, and growing demand for natural cosmetics. Moreover, online distribution channel has dramatically influenced the active cosmetics market's growth, mainly during the COVID-19 pandemic.

Rising skincare regimes among the young population, high purchasing power, and expanding distribution channels are the primary factors driving the market in Latin America and Middle East & Africa. Convenience, growing multiple brands, and discounts offered by online channels are driving online sales in these regions. With the growing digital adoption, e-commerce is becoming a significant channel. It is also creating lucrative opportunities for both single and multi-brand stores of beauty and personal care (BPC) products across the regions. The social media influencer's trends showcasing their care regimens have risen over the past few years. Both local and international beauty companies have been turning to influencers to increase their brand awareness and reach potential consumers. However, the growth of the active cosmetics market in Latin America and, the Middle East & Africa is hindered by the high cost of products and ingredients, specifically given the growing shift towards organic and natural products and strict government regulations and industry standards related to the use of components in the cosmetics market.

COMPETITIVE LANDSCAPE

The global active cosmetics market is dynamic, with several key global players and a large pool of other prominent vendors offering a wide range of active cosmetics. L’Oréal, Shisheido, Givaudan, Croda International, and IFF are some of the key players in the market. There is a high focus on developing active cosmetics in the form of powder, bars, and many more. L’Oréal is highly focused on developing dermo-cosmetics and is the leading company in dermo-cosmetics. Companies are highly focused on inorganic growth. In recent years, the top companies in the market have made many acquisitions to strengthen their active cosmetics portfolios. As the demand for halal cosmetics is rising in middle east countries and highly developed countries, several companies are now focusing on developing active cosmetics with active ingredients derived only from plants. Increasing halal certifications can also be witnessed among several companies based in the Middle East, APAC, North America, and Europe.

Active cosmetics vendors face massive competition from many established vendors and emerging companies to become highly competitive. The vendors actively engage in strategic acquisitions and partnerships for inorganic growth and invest in R&D activities. Strategic partnerships and acquisitions remain essential competitive strategies for key players to expand their product portfolio and gain market share. Furthermore, the industry is experiencing an increase in product launches from various vendors coupled with R&D activities, thus enabling vendors to expand their presence, enhance market growth, and sustain their market position in the global active cosmetics market.

L'Oréal is the leader of a globalized, highly competitive cosmetics market and is the global leader in the active cosmetics market. Its active cosmetics division is the world leader in derma cosmetics, with international skincare brands recommended by healthcare professionals. It is composed of six brands originating from France and the U.S. Active cosmetics held a 12.2% share in 2021 out of all its other cosmetics segments.