On Thursday, we talk about beauty insights! In today’s #beautythursday column, we take a quick look at the growth of the beauty industry and its major trends.
The beauty industry is a highly competitive one. Its market size is estimated to grow “up from $483B in 2020 to $511B in 2021 — and with an annual compounded growth rate of 4.75% worldwide — it’s predicted to exceed $716B by 2025. And $784.6B by 2027.”
What are some of the trends that stimulate the rapid growth?
1. Social eCommerce: social media platforms began to incorporate eCommerce functions in their page to make it easier for consumers to discover new products while they spend time socializing and connecting with friends online. For example, amid the pandemic in 2020, Facebook launched Instagram shop functions and joined the competition with Amazon. This movement to combine the world's biggest social media platform with ecommerce functionality contributes to the rise of social eCommerce in the United States.
2. Platform business: this is a model that “creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers.” Platform connects multiple parties (B2B or B2C), allows exchange (ideas, thoughts, transactions) and provides tools and services. The ecosystems allow platforms to scale in ways that traditional enterprises cannot. Successful platforms facilitate communication by reducing transaction costs and externalizing innovation.
3. Influencers: as influencer market size up to $9.7B, businesses start to focus on influencer marketing, especially micro-influencers (the number of large firms working with micro-influencers increased 300% compared to 2016). More consumers like to read product reviews from micro-influencers, who have higher engagement rates and are better at building trust and connecting with their audience.
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