Online channels for beauty and personal care (BPC) products are expected to grow at a compound annual growth rate (CAGR) of about 25% in India, according to Nykaa Beauty Trends Report.
The beauty marketplace is among the fastest growing in the world at a CAGR of 10-11% and expects to reach $34 billion by the end of 2028, mainly driven by online channels and core beauty categories like skincare, makeup, haircare, and fragrance.
The study, conducted in partnership with Redseer, found that rising discretionary spending, social media expertise, and wider accessibility due to ecommerce channels are driving growth in the BPC sector. Moreover, consumer preference for premium products, new formats, ingredients and concerns fuels product innovation.
“The insights from our Beauty Trends Report clearly show a market poised for extraordinary growth, driven by premiumisation, technological advancements, and a new generation of discerning consumers,” said Anchit Nayar, Executive Director and CEO of Nykaa Beauty, in a statement.
The online premium beauty segment is expected to grow at a CAGR of 21-22% till 2028 while the prestige beauty segment is expected to grow at a faster rate.
Increasing consumer sophistication and penetration into niche segments is also expected to drive traction in the brand, the report noted. This will lead companies to focus on personalisation in digital journeys and tread with a higher reliance on beauty influencers.
Buyers are increasingly seeking targeted solutions and looking at ingredients while making decisions. Moreover, with evolving engagement platforms, micro trends ensure that companies have to set up agile manufacturing processes to capitalise on trending products.
“The democratisation of beauty expertise through social media, now influencing over 500 million users, is ushering in a new era of informed and empowered consumers,” noted Anil Kumar, Founder and CEO of Redseer Strategy Consultants.
The report also highlighted growing demand from cities beyond top metros, mainly driven by rising incomes and the physical retail presence of beauty brands. On the products side, homegrown beauty brands have emerged across price points and categories helped by VC funding.
