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Anthony Raymond May.13.2022 7 min read

Emerging Beauty Industry Trends 2022

Who’s Disrupting Beauty? 

 

Emerging Beauty Trends You

Can’t Afford to Ignore

It’s hard to deny that Beauty is one of the most influenced consumer product categories. In the last two years, the industry has had to adapt to shifting consumer needs. For example, the rise of TikTok now offers new beauty brands an opportunity to skyrocket viral heights, giving brands an entirely new marketing channel to work with. Furthermore, Instagram and other social commerce sales are expected to grow to $79.64 billion by 2025, completely shifting sales expectations within the category.

Emerging beauty market overview

According to a March 2022 report published by Statista’s research department, the Beauty category is expected to reach $131 billion in global sales by 2026, up from $72 billion in 2020, which leaves a lot of room for beauty startups and emerging brands to gain marketshare. 

Within the Helio universe, there are more than 200,000 beauty brands across 14 categories: Hair Care, Personal Care, Skin Care, Makeup, Body Wash/Soap/Deodorant, Nail Care, Fragrances, Dental Hygiene, Essential Oils, Sexual Health, Sun Care, Feminine Care, Baby Personal Care, Infant Personal Care. 

Categories with the highest brand count include Hair Care, Personal Care, Skin Care, and Makeup.

Top beauty industry categories by brand count

Over 185k of the 200k brands tracked by Helio have less than $5m in estimated revenue.

revenue range benchmarks by beauty industry category

Baby Personal Care (1.44%), Feminine Care (1.57%), Dental Hygiene (.65%) and Sun Care (.41%) have highest brand count over $50M in estimated revenue, leaving little room for emerging brands to grow. Alternatively, Essential Oils (0%), Hair Care (.07%), Makeup (.07%), and Personal Care (.07%) have high brand counts under $250k, leaving the most room at the top for brands to grow.

 

Watch "Who's Disrupting Beauty?" Webinar On-Demand

 

Direct-to-consumer drives emerging Beauty

Distribution channel is a determining factor for growth

Our Helio Growth Predictor (HGP) score predicts the likelihood of future growth over the next 12 months. Data suggests that emerging beauty brands with a combination of Offline, Online (Ecommerce), and D2C yield the strongest HGP Score (.73 on average) and are best poised for growth.

Brands with a combination of D2C and Online distribution channels have the second highest average HGP score (.66), followed by solely D2C at (.62). Brands with Amazon distribution lack strong outlook for future sales growth, across all channel distributions. 

Data suggests that successful D2C brands should look for Offline distribution opportunities and create disruption among their category.

Median HPG score by channel distribution

 

Emerging beauty brands have a high churn rate

The Beauty category is very competitive with an extremely high churn rate. In fact, only 43% of Beauty brands launched in 2015 are still in the market today. Churn rates also vary by category. For example, brands focused on Nail Care and Fragrances have the lowest churn rates between 45% and 50%, while brands focused on Sexual Health, Baby Personal Care, Essential Oils and Feminine Care have the highest churn rate since 2015 (+70%).

brand lifecycle churn rate

7 Year churn rate vs. primary beauty category

So what’s trending? 

Helio uses offline sales and online traffic to identify trends and momentum within each category. Below are the top three trends we’re seeing in the market now among emerging beauty brands: 

  1. Sun Care and Sexual Health categories are currently driving growth in both offline sales and online traffic.
  2. Potential shift occurring in Baby Personal Care from online to offline sales as COVID eases.
  3. Feminine Care and Nail Care brands on the decline across both offline and online metrics.

Offline sales growth by primary beauty category

When analyzing growth rate by category, Makeup, Skin Care, Personal Care - Other, Nail Care and Fragrances are the categories best poised for growth in 2022-2023.

Median HGP score by primary beauty category

Categories poised for growth

For investors, research and development, merger and acquisition and innovation teams looking to disrupt the beauty category Helio identified which categories were poised for growth.

Makeup matches the category success criteria, including High Brand Count D2C presence, Low Churn, and Strong Future Outlook, which indicates that the category have a strong potential for future growth.

Beauty categories best poised for growth in 2022

Makeup Insights

Key Purchase Criteria in Makeup 

To identify Key Purchase Criteria, Helio analyzes customer review data across retailers to identify trends among consumer purchases, including what they value most before purchasing a product. 

When purchasing Makeup products, consumers most value ‘Easy to Use,’ ‘Value for Money,’ ‘Longevity,’ ‘Sheerness,’ ‘Consistency,’ ‘Packaging,’ and ‘Moisturizing.’ Currently, emerging beauty brands are delivering best against ‘Packaging,’ ‘Easy to Use’, and ‘Sheerness’ overall. On average, brands have an opportunity to improve on ‘Value for Money,’ ‘Consistency’ and ‘Moisturizing.’ 

Key purchase criteria in the makeup category

 

Top trending attributes in Makeup

‘Rouge,’ ‘Eye Palette,’ ‘Foundation Sticks,’ ‘Brow Pencils’ and ‘Nootropics’ are all top trending attributes in the Makeup category. Most recognized attributes include Foundation, Rouge, and Personalization among others.

top trending attributes in makeupmakeup attribute with the highest social following



 

 

 

 

 

Have questions about any of these insights? Interested in getting a personalized trend or emerging brand report? Reach out to the Helio team today! 

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Anthony Raymond

Anthony Raymond is Head of Professional Services for Helio at CircleUp.