Beauty business strategies - a pandemic perspective

The beauty industry has gone through a challenging year due to the pandemic. What path will help businesses recover in the race of this beauty industry?

The pandemic has altered consumer habits worldwide, not just for the beauty industry. All sectors are facing significant challenges due to a severe decline in customer demand. However, the cosmetic industry is seen as less severely impacted because consumers still have a need for at-home skincare. Cosmetic businesses can still maintain their operations during these times, indicating the potential and a more positive recovery rate after the pandemic.

I. AN OVERVIEW OF THE COSMETICS MARKET VALUE

Not only in Vietnam but globally, the beauty industry continues to grow vigorously and improve its services and products.

So, how large is the market value?

The market value has increased from $483 billion in 2020 to $511 billion in 2021, with an annual compound growth rate of 4.75% worldwide. Some economists have predicted that this figure will exceed $716 billion in 2025 and $785 billion in 2027.

This clearly demonstrates the significant consumer demand and purchasing power in the market. Despite the ongoing global social distancing measures due to the pandemic, they do not seem to diminish the supply and demand in the global market.

In particular, the consumption and use of beauty services in Asia account for 46% of the total market. Shopping habits may vary from country to country, but the common trend is that 81% of customers shop online, while only 19% visit physical stores.

II. THE RAPID RECOVERY OF THE VIETNAMESE COSMETICS MARKET

Since the Vietnamese government implemented social distancing measures, many entertainment venues, shopping centers, spas, bars, and public gatherings have temporarily halted their operations. This has significantly affected business sales.

Customers are trying to use up the products they have to save costs, and they will only purchase new products when necessary. Concerns about prices will encourage shoppers to opt for the cheapest products or simple skincare products, or even ignore skincare products altogether.

Social distancing measures reduce women’s demand for makeup, which leads to a decrease in makeup removal product consumption. Moreover, as customers spend less time outdoors, they become less concerned about the effects of urban pollution on their skin, especially when the use of face masks and face-covering accessories becomes more common, resulting in fewer people choosing to care for and protect their skin at home.

However, the cosmetics industry’s potential for recovery post-pandemic remains fast and higher than other sectors for the following reasons:

Changing Consumer Behavior Trends Post Covid-19:

Products derived from nature and organic products are attracting more consumers. It is clear that improving beauty and appearance is a significant factor for users. Products with unclear origins and high chemical content increasingly make consumers fearful and wary when choosing products.

The value of the global natural and organic cosmetics market is expected to nearly double from 2018 to around $54.5 billion by 2027. This is evidence of the increasing importance of the natural and organic cosmetics market.

High Demand for Online Shopping and At-Home Beauty:

Due to the pandemic, visiting stores for shopping has become limited and challenging. Consequently, online shopping has become a new way to satisfy personal beauty needs. E-commerce is a potential sales channel for cosmetics retail companies.

The desire for beauty has grown, not only among women but also among men. There is a wide range of cosmetics available from budget-friendly to high-end. This accessibility allows customers from different backgrounds to take care of their appearance with ease.

As a result of the pandemic, online shopping has become a new normal in consumer habits. In Vietnam, the demand for cosmetic shopping has increased by over 35% compared to the same period last year. Almost every Vietnamese citizen has at least one shopping app on their smartphone. Moreover, 80% of people between the ages of 16 and 64 shop online at least once a month.

This indicates the need for businesses to implement digital strategies in their operations.

Explosive Growth in Men’s Cosmetic Demand:

The belief that only women have beauty needs is changing, and men’s beauty needs, including skincare, hair care at spas, salons, even cosmetic surgery, and home skincare are on the rise.

Numerous brands are now tapping into the male personal care development market.

As the economy recovers and the quality of life improves, the cosmetics industry will undoubtedly continue to grow even faster in the years to come. If you’re interested in the beauty sector and intend to start a business in this industry, don’t hesitate to explore and build your cosmetics business strategy today!