Top Five Trends for Beauty and Personal Care in 2023

At a global level, post-pandemic recovery in 2022 was tempered by deceleration, in constant terms, driven by high inflation, rising unit prices and strained supply chains. Despite returning consumer confidence, sustained momentum in digital beauty engagement, and the reintroduction of travel and social occasions, challenges still exist for the beauty and personal care industry in 2023. Euromonitor International takes a deeper look at five key trends that are adding value for consumers and impacting beauty consumption.

Premiumisation and Affordability in Beauty: Increasingly price-sensitive skin care consumers in 2022

Inflation is having a profound impact on beauty and personal care, resulting in nuanced changes in consumption. As beauty and health products become more expensive due to high rates of inflation globally, consumers are forced to make more selective decisions when it comes to the products they buy. These changes vary based on consumer segmentation.

According to Euromonitor International’s Voice of the Consumer: Beauty Survey, fielded June to July 2022 (n=20,320), more global respondents in 2022 sought out price-sensitive attributes (such as value for money, multi-functional benefits, low price), compared to 2021, when shopping for skin care; an increase of approximately 2.5 percentage points.

More global respondents in 2022 sought out price-sensitive attributes compared to 2021, when shopping for skin care

^{Source: Euromonitor International’s Voice of the Consumer: Beauty Survey, fielded June to July 2022 (n=20,320)}

Findings suggest that more quality seekers and premium buyers sought lower prices, such as through promotions or price-accessible brands in 2022 year compared to 2021. Low prices, however, became less influential to value buyers in 2022 compared to the previous year - which appears contradictory at first, but could suggest that value buyers accept the inevitability of rising prices and were more focused on finding multifunctional or multi-benefit skin care instead. As 2023 progresses, the concept of “value” is expected to evolve in dynamic ways as beauty consumers reconsider their spending habits, such as efficacy seekers being more price sensitive in 2022 vs 2021.

Ingredient-Led Beauty: Green chemistry spotlights biotech’s influential role in innovation

Amid recalls and high-profile lawsuits (such as the 2023 pending lawsuit over chemical perms and relaxants), beauty consumers are becoming increasingly ingredient-conscious. Pandemic-heightened awareness for surfaces and ample consumer free time during lockdowns drove interest in and performance of single-ingredient brands. Even the most unregulated of beauty markets are now considering stricter rules, such as the Modernization of Cosmetics Regulation Act of 2022 in the US.

^{Source: R+B}

Malaysia’s first circular brand R+B formulates skin care products from plant-based ingredients, catering for the eco-conscious consumer and fast-tracking consumer trust of the brand due to familiarity of formulations.

The result is greater consumer appetite for sustainability, biotech, international beauty concepts. Essentially combining environmental sustainability with advances in biotech, “green chemistry”, which focuses on eliminating hazardous substances and adding or replacing previous ingredients with biobased ones, has emerged as a major focus area among beauty and personal care players. “Upcycling” is the latest green chemistry innovation, which refers to the transformation of a by-product or waste stream to a usable ingredient, and is a segment that is expected to accelerate in 2023.

Blurring Wellness Spaces: Two-way expansion of beauty and adjacent categories

Driven by increasing consumer demand for holistic health and prevention since the emergence of COVID-19, companies across consumer goods industries have rushed to merge traditional portfolios with emerging health needs. The result is a two-way expansion that includes blurring categories and hybrid offerings across home care, nutritional foods, fashion and apparel, and supplements, to name a few.

While this is not a new phenomenon unique to 2023, beauty is expected to strengthen its overlap with other industries, especially consumer health.

“Looking healthy” was the #1 way beauty was perceived among global consumers

^{Source: Euromonitor International’s Voice of the Consumer: Beauty Survey, fielded June to July 2022 (n=20,320)} 

Beauty as health was particularly important to baby boomers and Generation X, but millennials and Generation Z’s focus on preventative health underscores the need for brands to gain consumers' trust as a "holistic health enhancer” in the coming years.

Supporting Women’s Health and Wellness: A wide spectrum of need states

As the discourse around female empowerment and gender inclusivity widens, a greater awareness of women’s health will have a notable impact on the industry from 2023 onward. Women’s health encompasses multiple areas of care across a woman’s lifecycle from puberty and fertility to menopause and beyond. Identifying gaps across the women’s wellness solutions spectrum presents opportunities for beauty brands to think beyond conventional innovation spaces.

For instance, a greater understanding of how hormonal imbalances correlate with changing skin and hair needs (dryness, thinning, elasticity), presents prospects for alignment of beauty routines with tailored solutions across cycle care, menopausal and maternal health. Equally, the exploration of converging spaces such as intimate care and sexual wellness would come as a natural extension to strategies that endorse a more holistic wellness-oriented approach. For beauty brands, part of the challenge will be mapping the right investment in this space, since entry could come in different forms, and assessing market readiness and consumer demand for products and service centred around the natural hormonal journey.

From Function to Emotion: Neuroscience applications emerge in beauty and personal care

As beauty consumers search for newness and innovation, emotional values such as internal health benefits and social value identities have become essential factors in beauty consumers’ purchasing decisions.

                            ^{Source: Yahoo}

US-based candle brand Nette leverages neuroscents to create candles and fragrances, based on analysis from IFF’s Science of Wellness that blends artificial intelligence with neuroscience.

Neuroscience, especially brain wave detection, is starting to be used as a biometric signal to evaluate emotional functionality. The concept of “neuroscents” which elicits emotional responses that are neurologically proven, opens new opportunities for fragrance and ingredient players in 2023 to not only provide the product but also educate consumers on this emerging segment.

Demand will continue for beauty and personal care that educates, delights, and provides value

Based on 2022’s performance, the outlook for 2023 has grown increasingly cautious due to lower consumer confidence and purchasing power. However, as evident since pre-COVID-19, beauty consumers are continuously searching for newness and innovation.

The global beauty and personal care industry is predicted to record a 3% CAGR in constant terms over the forecast period

^{Source: Euromonitor International}

While consumer restraint is expected to be more apparent in the industry in 2023, there are also ample opportunities for beauty players to position themselves as subject-area experts and trusted guides through these five key trends.

Learn more about beauty in our report, World Market for Beauty and Personal Care, to identify opportunities and prospects in beauty by geography and category.