Now is the time to enter the Beauty Industry
The Appeal of Beauty
The cosmetic industry has long been associated with stability and growth, and for good reason. Time and again, the beauty industry has proven itself recession proof. When the rest of the economy floundered in 2009, the cosmetics industry grew 5.4%. The American market generated $56.2 billion in revenues last year, and is expected to grow in every sector. The number of hairdressers, skin care specialists, and massage therapists are all expected to grow by double digit figures by 2024. And the more specialists and vendors there are, the larger the overall industry becomes. With such specialists earning up to 15% of their revenue from beauty products, the market and demand for products will only continue to grow. Together with a 15% growth in online sales from 2014 to 2015, entrepreneurs looking to enter the business have every reason to be optimistic and bullish.
The Changing Face of Cosmetics
Technological innovation and shifting demographics have created new trends that drive the industry forward. While online cosmetic sales are expected to reach $12.86 billion by the end of 2021, the internet’s biggest impact may be how it affects trends and popularity. Where once established tastemakers and large firms established popular tastes, 82% of women now say social media creates the definition of beauty. For entrepreneurs looking to establish their brand, marketing partnerships with social influencers on YouTube and Instagram are a necessity.
New customer segments are also driving new, surprising trends. The beauty device market is expected to grow by a compound annual rate of 18% through 2025 as more customers seek to create a spa environment at home. Skin care products, already 23.7% of the cosmetics market, is the fastest growing segment. With revenue expected to hit $13 billion by 2022, the segment’s growth is being driven by millennials, men, and mothers. 40% of millennials currently use anti-aging products, men use skincare products more than any other beauty product, and mothers are showing increased demand for sunscreens and lotions for their children.
|US Beauty Industry Segments||Market Share by Revenue|
|Perfumes and colognes||9.5%|
|Deodorants, antiperspirant, feminine cleaning||8.5%|
The Need for Strategic Partnerships
Unlike past generations,millennials show little brand loyalty. Rather, they are motivated by innovation and good deals. Expect this trend to motivate large, established firms to partner with new entrepreneurs and products. The large companies get the highly in-demand product innovation and the small firms gain access to the resources and distribution channels of the larger company. While any new company should have a strong online presence, brick-and-mortar stores are still an invaluable component of the industry. That’s why it’s vital to partner with retailers that are adapting to the emerging trends. Retail cosmetics chain Sephora recently launched an experimental store offering in-store electronic makeup classes and virtual try-on tools. Your product is innovative, your strategic partners should be too.
New entrants to the cosmetic industry should choose their supply chain partners very carefully. When 49% of millennial women have a strong preference for natural and organic products, it’s important to partner with suppliers and packaging services that fulfill the demand for environmentally sustainable goods.
Just as technology has changed how consumers compare and purchase cosmetic products, Powerlinx seeks to change how companies find and connect with strategic partners. Every day, Powerlinx is helping innovative and ambitious self-starters find the investors and supply chain partners they need to thrive and succeed. With a focus on big data and thorough analysis, Powerlinx has created a one-of-a-kind B2B platform for businesses to grow and expand. By looking at a wide variety of metrics and your stated goal, the proprietary PowerScore™ algorithm instantly gives you a quantitative measure of your business’ compatibility with a potential strategic partner.
Powerlinx’ unparalleled platform can connect your business with partners from all over the world. Our dedicated analysts can point you to the best cosmetic labs to create the best, most innovative products possible. For companies looking to expand to new regions, Powerlinx can help partner you with quick, reliable distributors to deliver your product to a robust network of vendors and specialists. With new opportunities being posted daily, Powerlinx is an invaluable for any ambitious young company.
Visit https://www.powerlinx.com/ to learn more