The cosmetics industry and personal care: its strength in the face of the pandemic

The importance of personal care has changed throughout history. There have been periods in which society gave it less or more relevance. Currently, the cosmetics industry is experiencing exponential growth derived from the increase in life expectancy and the consumer demands of the new generations.

Social networks, influencers and digital marketing campaigns have been a fundamental part of the growth of this sector, which has successfully weathered the ravages of the first year of the pandemic. 

How much is the cosmetics industry worth?

The pandemic has been a watershed in different industries and in cosmetics it has not been different because, according to Statista it reflects a 10% decrease in 2020 compared to 2019.

However, the outlook looks favorable as the cosmetics industry is expected to generate 800,000 million dollars worldwide in 2023, according to CB Insights. 

Skin care, also known as skin care, has become a trend in recent years and the use of these products in increasingly younger generations has generated a considerable increase in sales within this category of the sector. 

Statistics from the, Statista firm show that the market share it represents is over 35% and it is estimated that the global skin care market will be worth US$189.3 billion by 2025.

What kind of market is the cosmetics industry?

Personal care is one of the most important segments among people's consumption habits. The cosmetics market covers a wide range of products such as creams, sunscreens, soaps, cosmetics and perfumes, to name a few. 

These are the five leading companies in and cosmetics during 2020 according to Statista:

  1. L’Oréal:  27,992 millones de euros
  2. Estée Lauder: 14.294 million euros
  3. Beiersdorf:  7,025 millones de euros
  4. Shiseido: 6.996 million euros
  5. Nature: 6,277 million euros

The latter, Natura, is one of the main companies within this industry in Latin America. During 2021 its sales increased by 7,969 million dollars. This continues to position the brand as a leader in the region and also reflects a growth trend in this market.

The cosmetic industry in Mexico

La industria cosmética mexicana también fue otro de los mercados que estuvo expuesto al impacto por la pandemia.  Durante el confinamiento social por la crisis sanitaria, este sector registró una baja en su producción que, conforme se reactivó la economía, presentó una recuperación.

The  National Chamber of the Cosmetic Products Industry (Canipec) estimated a 10% increase in sales in the last year.

Despite this scenario, the development of this market keeps it in third place in cosmetics production, just below the United States and Brazil. The development presented by the cosmetics industry opens an opportunity for investors since its growth will be related to the invested capital and small companies that venture into this market.

Industry value after digitization

Although the industry had to adapt to the new needs anddemands of consumers,, which is why various brands focused efforts on migrating and optimizing online sales.

E-commerce was key in the recovery of the sector during the pandemic. In Mexico during the health contingency, online sales for this industry increased by 11% according to a study carried out by the Mexican Association of Online Sales (AMVO).

Precisely this growth opens an opportunity for both entrepreneurs and investors. The adaptation of this market towards a digital world will require new players to grow. Without a doubt an opportunity for investors.

Investment and innovation in the industry

With an increasingly informed and demanding public, the cosmetics industry requires an accelerated response to consumer needs. Investment for innovation is vital to boost the competitiveness of cosmetic companies. 

Technology has played a fundamental role in optimizing processes, digitalization in production areas, innovation in formulas, materials, and product testing. 

En 2018 L´Oréal lanzó Bold, Business Opportunities for L’Oréal Development, su propio fondo de inversión en startups. Con este fondo la marca ha conseguido participación en diversas startups dentro del sector. Su primera inversión fue en Sillages Paris, empresa francesa que crea perfumes personalizados en línea a través de inteligencia artificial. 

Y en 2021, la marca anunció la producción del primer envase de plástico para el sector cosmético reciclado a través de tecnología de reciclaje enzimático, creado por la empresa Carbios, de la que obtuvo participación a través de Bold, su fondo de inversión. Además la empresa cuenta con su propia incubadora de tecnología que desarrolla productos cosméticos inteligentes.

Investors in private capital are committed to an investment portfolio that triggers the growth of innovative companies that have a positive impact on the local economy.

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