The beauty and personal care industry’s gross merchandise value is expected to reach $90 billion over the next 15 years, growing at 5x, as per a report released by HSBC Global Research. This is attributed to growing per capita consumption on beauty products, driven by rising adoption of online shopping.

The report noted that the BPC sector in India has expanded 4x over 2006-2022 period to $19 billion. In fact, certain sub-categories are expected to grow at even a faster pace than the overall industry.

“In our view, skin care, make up, and several sub-categories can grow 10x in the same period. Colour cosmetics (17 per cent CAGR over 2020-23) is currently the fastest growing segment, followed by fragrances (16.6 per cent) and sun care (13.7 per cent). We believe China is the best growth benchmark; its BPC market has increased more than 6x since 2007 and continues to grow strongly. India is where China was in 2007 in terms of per capita BPC consumption and per capita income level,” the report released by HSBC Global Research added.

Stating that e-commerce sale accounted for just about 17 per cent of the overall BPC market in 2022, the report projects this to rise to an estimated 45 per cent by 2037. “Influencer-led digital marketing is starting to have a significant impact in India, leading to increased fragmentation of categories and the rise of many new brands as consumer preference for sustainable products increases,” it added. However, not all brands are expected to scale and only few will be able to generate sustainable profits.

“Intense competition as more brands enter the market is likely to tilt the balance of power towards companies with large e-commerce platforms, which are best positioned to monetise high customer acquisition and marketing costs,” the report noted.

It further added that “specialist online beauty retailers with an omni-channel presence are best positioned to capture the value of the exponential growth in e-commerce and this long-term growth story”.