The global cosmetic industry is estimated at 400 billion and growing.
For some people, a morning routine starts with a cup of coffee. For others, it’s a jog around the neighborhood and for millions of women, it’s cosmetics. Why do women care so passionately about makeup? Studies indicate that an estimated 44 percent of American women don’t leave their homes without makeup on, and further research concluded there were two reasons for that. One was camouflage, to cover up marks that make them feel anxious or insecure, and the other was seduction – to feel noticeably more attractive, which also helps them feel more confident, sociable, and assertive.
The women using cosmetics have indicated a concern that if they show their natural, untouched face, they can’t accomplish either one. There’s also a widespread belief that attractive people are treated more favorably in all areas of life, from dating to hiring. That may be a crucial reason why so many women feel like going a day without makeup seems weird, even unnatural. Many of them have been putting it on for so long that it’s become a key part of their daily routine. That’s also why the cosmetics industry is not only booming but is one of those industries that rarely gets impacted by recessions or economic downturns. Globally, the Cosmetics Industry is expected to reach $412 billion by 2024, an increase from $299 billion in 2016. This is an industry that continues to serve a sky-high customer demand, with increases in profits coming now from millennials who are driving up sales of all forms of cosmetic products.
It is no secret to anyone that beauty is a lucrative business that moves billions of dollars a year. And that unlike other businesses, it has survived economic crises. It is clear that today any business needs to be digitized. Only those who adapt to new changes can survive and grow.
Despite the difficult year 2020 was, the beauty industry did very well. That’s in part because brands, with their dominance of social media, are appealing to a customer base that remains willing to spend.
The pandemic reduced the places to go, but it didn’t stop people from wanting to get glamorous. According to research by McKinsey, the beauty industry is outpacing many of its peers who also rely on retail. And it grows because its brands are relevant (looking good never goes out of style), they dominate social media, and they attract millennials and Gen Z, all willing to spend.
While this is a competitive field, it’s not one that operates in the same way as clothing and apparel, since cosmetics are not bound by fashion trends happening across the world. Instead, it is meeting consumer demand for a wide variety of skin-care products such as face masks, peels, creams, blush, and sprays. There is particularly high demand among middle-aged consumers for anti-aging products, which is increasing the profitability of this lucrative field. The market has shifted and adjusted in recent years. There’s been a trend toward organic and natural cosmetics, with both of those terms showing up more and more on cosmetic labels these days. For consumers looking for living simpler, more natural lives, there are organic beauty brands available in a wide range when it comes to price and product. Not only is this viewed as a way to cover marks and blemishes but caring for our skin is also considered a simple and effective way to ensure long-term skin health and radiance, since these products combine vitamins and minerals that heal and restore the skin without hurting the Earth. In other words, these products can be good not only for our body, but for the planet and its sustainability. Consumers today tend to be well- informed and are looking for products which are less harmful in terms of chemical composition. More than a few manufacturers are going out of their way to keep pace with this newly emerging trend.
Today, the cosmetics market is anything but stagnant and is being driven heavily by innovation, with new product development continuing to bring to market an assortment of products that is matching the rise in consumer disposable income in developing countries such as China, India, and Malaysia. These new innovations are also helping to drive additional growth across North America.
Skincare products represent the fastest-growing segment in the cosmetics market, while anti-aging products have increased in popularity due to consumer demand to improve their appearance and look more youthful.
This is also an industry that was among the earliest to find a solid footing through e-commerce websites in addition to department stores, supermarkets, and wholesalers. Online sales channels have exhibited remarkably high growth opportunities in recent years, as customers become more comfortable with shopping online or through their mobile device.
The digital revolution has played a key role in driving cosmetics demand across the globe, as eCommerce sites now reach mass markets worldwide. Social media has also considerably helped companies reach out to their customers and have been particularly effective in showing not just the products, but customers and their testimonials about the benefits of these using them. The industry is changing in another way: it’s no longer entirely about women. In the last decade, any social stigma against makeup for men has been fading, and it’s now far more common for men to appear in cosmetics ads.
That includes Manny Gutierrez, known on social media platforms as Manny MUA, who became the first man to star in a Maybelline campaign in 2017. Gutierrez, who dropped out of medical school to pursue a career in beauty, has since become a male makeup vlogger and YouTube star.
The cosmetics industry is not only enormously profitable but is diversifying its customer base in uniquely modern ways.
The main competitors are the big makeup brands like Estee Lauder, MAC, Mary Kay and Bobbi Brown along with smaller indie brands like Kylie Cosmetics. Our target market is divided into two niche demographic categories. Firstly, our premium cosmetic products are suitable for middle aged women in the United States who prioritize quality over all other considerations. Malibu cosmetics is an e-commerce holdings premium cosmetic brand and pricing will reflect that. Our online e- commerce strategy will allow us to carve out a niche by targeting these women in Facebook initially and other sales channels using effective video and banner ads with superior sales copy. Facebooks advertising data and algorithms will identify our best customers and optimize our adspend to insure a minimum 300% return on adspend.
Providing personalized customer service, fast shipping times comparable to Amazon will help build our customer base and repeat business.
Our products will be sourced in the United States thereby providing an immediate competitive advantage as we are not dependent on the global supply chain. The second target market will be the Gen Z and Millennial demographic 18-35.
This is the fastest growing e-commerce demographic and the biggest opportunity to grow our brand and increase revenue.