The online beauty industry is experiencing significant growth due to the widespread accessibility of the internet and mobile devices, along with the influence of social media on e-commerce. It’s expected that the online beauty and personal care market will maintain an annual growth rate of 6.6 percent from 2017 to 2022, with a projected value of $57 billion by 2022.
In this evolving market, the Asia Pacific region is poised to experience the highest growth rate, while North America and Western Europe will continue to be essential regional markets. Here’s what you need to know if you’re considering entering this dynamic industry.
Various Innovation Models in the Beauty Marketplace
There are several innovation models within the beauty marketplace:
Direct-to-Consumer Model:
This model involves online retailers who sell their products directly to consumers through their channels, bypassing traditional intermediaries in the supply chain. It’s a direct brand-to-customer approach.
Indirect-to-Consumer Model:
Brands sell their products to retailers, who then offer them to consumers. This model retains intermediaries within the distribution channel.
Online-Offline Platform Model:
This model merges online marketplaces with physical product displays. Businesses employ online-to-offline (O2O) commerce strategies to encourage customers to visit physical stores for their purchases, integrating traditional and online marketing tactics.
Beautysourcing.com, for instance, follows the online-offline platform model. It’s a marketplace platform specializing in beauty wholesale products. Leveraging over a decade of expertise in the cosmetics industry, they meticulously select suppliers. It operates as a lateral business-to-business market and remains updated with the latest trends in the beauty supply chain industry.
The Permanence of Beauty Marketplaces
The advent of e-commerce paved the way for the emergence of beauty marketplaces, and they have firmly established their presence in the industry. These online platforms facilitate the buying and selling of beauty products, akin to the eBay or Amazon of the beauty realm.
While platforms like Revolve and The Hunt have been around for some time, recent months have witnessed the launch of numerous new marketplaces like StyleSaint and The Black Market. These platforms have gained traction because consumers continually seek affordable ways to explore new brands and products without long-term commitments. This trend raises questions about the future of retail and how brands can best leverage it.
Online-to-offline (O2O) commerce is a key strategy in encouraging customers to visit physical stores for purchases. It employs a variety of techniques, including email marketing and online advertising, to transition online leads into in-store customers. This approach blends traditional and online marketing practices and provides customers the opportunity to sample products before making a purchase.
Moreover, reports highlight the growth of cosmetics as the largest retail category among women, with total sales soaring to approximately $34 billion. Notably, prestige cosmetics companies like L’Oreal are recognizing this trend and are actively pursuing initiatives to engage millennial shoppers.
In summary, the beauty marketplace is experiencing remarkable growth with various innovative models, and it appears to be a lasting trend. Online-to-offline strategies and the allure of cosmetics among women are driving this evolution in the beauty industry. Brands that adapt and explore these opportunities stand to thrive in this dynamic market.