Insights and Trends - Skincare and Anti-Aging: Part One
The global anti-aging cosmetics industry is expected to reach a market size of $17.22 billion by 2023, and several trends are fueling the growth of the industry, including strategic M&As and increased R&D spending for product innovation.
1. Increased spending on R&D Technological Innovation in Products
- As per the recent reports from Research&Markets and Chief Analyst, the key players in the anti-aging cosmetics space are increasing their R&D spending to master product innovation.
- Companies like L'Oreal and Estee Lauder have increased their R&D spending over the years. Both of these companies have been recognized as the major players in the anti-aging cosmetics industry. "In 2018, Esteé Lauder spent around $202 million on R&D initiatives, and the R&D spending stood at $179 million and $181 million for the year 2017 and 2018, respectively.
- Product innovation is a key to survive in the industry, and continued R&D helps with the same. According to a recent press release from Estee Lauder, the research and development segment of the company is focused on finding breakthroughs in the anti-aging space to "push the boundaries of both its understanding of and its ability to improve skincare."
- This trend was chosen because R&D is an important element of product innovation, and the latter is necessary to survive in the highly dynamic and competitive environment of the industry. The trend is also being incorporated by some of the biggest players in the industry and has also been highlighted in multiple industry reports.
2. Strategic Acquisition is Trending
- Strategic acquisitions have also been trending in the industry; market giants have been acquiring small but successful anti-aging product manufacturers and tech companies for improving their current product lines. Some of the biggest M&A transactions include the L'Occitane and Elemis acquisition, Estee Lauder and K Beauty & Dr. Jart+ acquisition, P&G, and Snowberry Acquisition, Colgate-Palmolive and Filorga, Unilever and J-beauty brand Tatcha, Shiseido and Drunk Elephant acquisition.
- One of the major highlights from these acquisition deals is that the brands that have been purchased by these giants are mainly dealing in anti-aging cosmetics space like Elemis, Filorga, Snowberry, K Beauty, and Dr. Jart+.
- One of the most popular tech-based M&A transactions is L'Oreal's acquisition of Modiface.
- This has been included as a trend because multiple key players have been following the trend of acquiring mainstream anti-aging brands for improving their current product lines.
- Anti-aging cosmetic companies are considering online platforms as an effective sales channel. Companies like L'Oreal have been offering specific anti-aging products like REVITALIFT Triple Power Intensive Anti-Aging Day Cream Moisturizer on its website. Other key players that have incorporated the trend include Shiseido, and P&G. According to a report by Technavio, online platforms are trending in the anti-aging industry as multiple companies are trying to facilitate the online availability of anti-aging products directly through their website.
- According to a recent market report from Chief Analyst, most anti-aging manufacturers are going vegan to meet the current growing demand for vegan beauty products; L'Oreal is one of the most well-known brands in the vegan cosmetics space. Given that the vegan population is on the rise, the trend is expected to fuel the growth of vegan beauty products. Mainstream vegan brands like Plum are also launching anti-aging product lines to attract specific consumer groups.
- Most anti-aging cosmetic brands are retargeting their focus to the Gen Xers and are improving their current product offerings to help aging concerns of Gen Xers. Brands like L'Oreal Paris, Clarins, Trinny London, Korres, and Boots No7 are introducing more anti-aging products for the Gen X generation.
- In an attempt to provide solutions to all problems from aging to wrinkles to acne, beauty companies are increasingly focusing on microbiome skincare. Companies like Johnson & Johnson, even have a dedicated microbiome platform.
- "Features of skin aging, such as wrinkles and dark spot formation, are accelerated in heavily polluted environments, and the number of those suffering from skin conditions, such as acne," is increased; therefore, beauty companies are focusing on providing cosmetics that include the anti-pollution element. "Clé de Peau Beauté will be relaunching its global best-seller — the Correcting Cream Veil –with pollution defense, SPF, and super light reflecting technology."
In order to list the current trends that are shaping the skincare industry, more specifically anti-aging, we searched through several industry reports, market publications, press releases from some of the most prominent players of the industry. Since the geographic scope of the research was not specified, we have included trends that apply to the global anti-aging cosmetics products industry. Given that the first trend identified in the previous phase of our research is applicable to both the US anti-aging industry and the global industry, we have attempted to include stuff that is globally trending and is also somewhat related to the US industry, too. For instance, selling through online platforms like websites is a global trend, but it also applies to the US.