The Boom in e-Commerce Reshaping the Growth of the Beauty Industry

The young, enthusiastic and passionate young entrepreneur, Karan is spearheading the grooming and personal care industry in India with natural, organic and scientifically researched products.

A study by Goldstein Research found that over the past five years, the domestic demand for cosmetics and beauty products in India has increased by 60 percent. Our country is one of the fastest-growing markets across the world when it comes to beauty and personal care products. Even now, the market is expected to grow at a compound annual growth rate (CAGR) of 7.6 percent by 2023. Along with growing awareness about beauty products, an increase in disposable income and standards of living, the boom in e-commerce or online sales is a significant factor reshaping the growth of the beauty industry. There have been various economic, societal and operational shifts in the industry owing to the COVID-19 pandemic, which can dramatically alter the future of the beauty industry.

‘The Lipstick Effect’
There is no industry that has yet been untouched by the COVID-19 crisis. Beauty and cosmetics industry can vouch for that not only in India but also globally. All economic recessions in history have prompted people to find happiness in little things. Therefore, in the United States (US), the uptick in sales of beauty products such as lipstick coincides with every recession period. This phenomenon of trying to ‘look good to feel good’ is known as ‘the lipstick effect’. Even though COVID-19 is a health crisis, it has arrived in combination with a lot of economic distress. Therefore, the lipstick effect has undergone notable changes, and customers are now more focused on investing in personal care products.

Boost in Sales of Personal Care Products
While working from home and limiting their outings, customers have embraced a new ‘no makeup’ look. Use of mask hides half the face, which is another reason why they are not very keen towards buying high-end makeup products. They are now growing comfortable without makeup but the need of looking good has not disappeared. Even though people have become extra cautious of the essentiality aspect of each purchase, they are still taking the time to do ‘self-care’. For this, they have been researching and purchasing personal care products such as at-home hair, skin and nail care. As the industry grows, we can see good companies trying to keep up and launching more ‘at-home kits’.

The Values of Gen Z
As their spending power increases globally, Gen Z makes up for a big chunk of online buyers of skincare and beauty products. Naturally, their values and opinion will matter to those brands who want to grow their digital sales. In the world market, a trend has been noticed that Gen Z is not enthusiastic towards products that enable ‘cover-up’. Instead, they prefer skincare products, which is just the opposite of their generational predecessors, the Millenials. Hence, cosmetic companies who are keen to increase their customer base will have to upscale their research and development and come out with natural skincare or hair care products that are available just a click away.

The Role of Social Media Campaigns
Social media campaigns have been an aggravator of online sales for the beauty and cosmetics industry even before COVID-19. However, it has undoubtedly reached its true potential after the commencement of the lockdown. Many beauty brands that wanted to stay in business invested in engaging and interesting social media campaigns and influencer marketing campaign to keep their customers while reaching potential ones. This increase in digital content has been helping beauty brands present their products to the customers in innovative ways like never before.

Ecommerce + Social Media
As if the power and influence of social media were not enough, the addition of e-Commerce features to various platforms has worked in favour of many industries, including beauty and personal care. Instagram launched in-app checkout, and Pinterest introduced shoppable pins, which has helped beauty brands worldwide reap the combined benefits of social media and e-Commerce. It not only helped the brands get to the forefront with their marketing but also enhance the buying experience of their customers. More brands in the future could be seen channelling the dynamism of visual experiences on social media to attract buyers.

In the world market, a trend has been noticed that Gen Z is not enthusiastic towards products that enable ‘cover-up’

More Targeted Marketing & Branding Campaigns
Due to the COVID-19 pandemic, buyers have shifted from buying just any beauty product to preferring organic, natural and eco-friendly products. As a response, many beauty brands in India have come up with dedicated lines of abiding products. Targeted social media campaigns and marketing have been helping such homegrown brands grab more eyeballs globally. Before the lockdown, people-based marketing strategy was working well for most beauty brands. However, that has not been too helpful in the post-COVID-19 era. Brands must go for more data driven and targeted marketing and branding campaigns to persuade buyers to go for non-essential cosmetics. Similarly, campaigns are also required to create a need for at-home self-care kits.

The Disappearance of Brick & Mortar Stores
The beauty industry is at the cusp of a revolution, not just in India but globally. Data is the hottest trend reshaping and redefining the growth of the sector, while brick & mortar stores are becoming a thing of the past. Beauty brands need to think ‘digital-first’ to remain relevant and profitable, moving forward in the post-COVID-19 period.