Organic Beauty: Understanding The Future Of Clean Cosmetics And Skincare

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Consumer curiosity with regards to source of ingredients and manufacturing practices has increased over the years, and especially peaked since the COVID-19 pandemic started. Across many industries now, consumers want to know how products are made, who made them, and how they are going to affect their health in the long term. Shyam Arya, Cosmetic Scientist & Chairman, Indus Cosmeceuticals Pvt Ltd, is of the opinion that because cosmetic products are placed directly on skin or hair, their correlation with holistic health has largely sparked the customer’s interest.

Organic ingredients, clean cosmetics, and the like, are not new buzzwords, and the global demand for the same forecasts strong growth driven by consumption in major emerging markets. Arya says, “The COVID-19 outbreak has resulted in disruptions in the supply chain; the termination of many physical stores has had a negative impact on beauty and personal care products, including organic products. But the pandemic has induced a change in consumer preferences, who now want clean-labelled products. Brands now rely heavily on online channels to deliver their products to the door, which is helping boost sales.”

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While increase in online sales is yet to completely offset the physical store shut down effect, the organic industry’s growth pace is promising. Arya adds, “It is evident that consumers will increase online engagement and spending. Beauty industry players will need to work on their digital channels to capture and convert the pool of existing and new customers. It is estimated that the organic beauty industry will reach $48.04 billion by 2025, as demand for organic skincare, hair care and colour cosmetics drives consumers to look for natural and organic labels. The market analysis released by Persistence Market Research shows that with the year-on-year growth in organic beauty, the global market should be worth $22 billion by 2024, suggesting approximate growth of 8-10 per cent per year.”

Newer Opportunities

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The share of consumers with rising disposable income, increasing population of working women, and accelerated urbanisation will positively affect the global demand for natural and organic cosmetics. Additionally, increased pace of product clearance and government funding provides a favourable atmosphere for healthy competition to sprout in the market. To top it all, the younger generation is inclined towards adoption of sustainable practices, offering a growth platform to the global market. “But we need to be aware of the lack of specific legislation on the subject and the discrepancy between private norms and institutional perceptions of natural cosmetics, which can be a cause of insecurity for the market players,” says Arya.

Product Development Will Propel Growth

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Arya says that the organic cosmetics market has been very dynamic in nature and has been expanding gradually. “Market players are consistently exploring ways to deliver innovation with new functionalities and features. Increasing consumer awareness about the benefits of organic products and support from strong local companies holds the backbone of demand for organic cosmetics globally,” he adds.

The influx of new and better products will continue to lead the growth, but brands need to pay close attention to product shelf life and safety. Competitors will need to undertake aggressive marketing and branding strategies for newly launched products to have the edge in the market.

Running Parabens-Free

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With increasing awareness about the cons of parabens, consumers are avoiding beauty and skincare products containing these harmful ingredients. Arya says, “Initially, 35 per cent of beauty products used parabens, a number which has now gone down by nearly seven points over the past few years. The beauty industry has many categories that still source out a great share of sales from products with parabens and many other undesirable synthetic ingredients. However, categories that heavily focused on parabens are now the fastest shifting ones to paraben-free beauty products.”

All in all, positive growth has been registered in both domestic and export-oriented revenues by key players in the global organic cosmetics market. That being said, challenges such as increasing buyer bargaining power, emphasis on high-quality products at low costs are still a constraint for the organic cosmetics’ supply chain. An improved supply chain, logistics, and marketing strategy is the key for higher demand within the market for it to flourish further.