REPORT Premium makeup bouncing back

The past two years have seen color cosmetic brands face huge challenges as consumer makeup usage decreased during prolonged lockdowns. However, new beauty habits are emerging with a greater focus on healthy skin care, personalization and ingredients. 

The beauty industry has bounced back, with several companies and retailers reporting increased sales even against pre-pandemic levels. An increased digital confidence among consumers has led some brands to fully embrace technology, from virtual try-on tech to immersion in the metaverse. Alongside this there is a strong sense of building communities through such channels as social media, gaming and direct engagement.

As well as increased makeup use, there has been a greater focus on skin care since the pandemic which has impacted the color cosmetics sector. Caring makeup formulas have expanded beyond foundations and concealers to embrace nail polishes, eye shadows and lipsticks. Brands are responding to consumer demands by developing elevated skin-first products packed with sophisticated ingredients usually found in facial skin care. 

Matching consumer values

Health and environmental concerns apply as much to cosmetics as any other sector. Data from Innova shows that the total “free from” claims share increased from 23.1% on NPD in 2017 to 36.1% in 2021, globally. “No animal ingredients” leads in this category, followed by “no animal tested”. Fragrance free is another prominent claim, with various oil free formulations growing across new product launches. Plant-based products were already growing in the beauty sector and demand for vegan alternatives has increased in the past year. Innova’s data reveals “plant-based” positionings saw a high year-on-year growth of 60.1% in NPD in 2021 vs 2020.

Sustainability in the premium makeup sector has largely focused on refillable packaging. But the market is changing to meet the needs of more conscious consumers who are demanding greater transparency and sustainable credentials. While indie brands have led this push, the premium beauty sector still has work to do to meet consumer expectations.  

Disruptive makeup collaborations have emerged as a big trend, with color cosmetics brands joining forces with entertainment companies to offer limited edition collections. Many are aimed to entice Gen Z and young Millennials. Meanwhile, personalization remains a huge trend in the beauty sector. According to the Innova Beauty, Household & Personal Care Survey 2023, 48% of consumers globally cited personalization/tailored to individual needs as very to extremely important when shopping for makeup. Brands are now offering more innovative custom formulas using AI technology. 

Growing markets 

Although economic uncertainty is affecting consumers in the US and Europe, newness and innovation will remain a key driver of growth. It is also increasingly important to offer a seamless, omnichannel shopping experience that merges physical and digital functionalities to make shopping easier, more convenient and more immersive. 

China is set to become the world’s largest luxury market. Here, male beauty is one of the fastest-growing consumer product segments, largely driven by popular platforms such as Douyin (similar to TikTok) and South Korean pop culture. Sub-Saharan Africa is another area ripe for growth, with three-quarters of the population aged under 30. And there is a rise in halal makeup products which tap into young Muslim consumers seeking color cosmetics that align with their faith. 

Inclusivity has been a major talking point in recent years. The debate has moved beyond skin color to embrace areas such as disability and gender identity. There is a push to address deeper, hidden racial and gender biases in AI to ensure that virtual try-ons and augmented reality filters are diverse and equitable. 

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