The beauty industry continues to grow, but it's missing a huge opportunity

Last year, the beauty industry had a global turnover of $570 billion, the sector grew by 9.3% and is expected to grow by 8.4% annually until 2028 , according to Euromonitor International.

Numbers like these don't happen in most industries, especially when they're already as big as the beauty industry. It's no surprise, then, that this sector continues to attract growth-seeking investors who pay high values, even for smaller companies.

The high prices paid for beauty businesses continue to attract entrepreneurs to this sector. In turn, they create a steady stream of startups that attract the interest of even more investors. The cycle continues: consumers want something new, entrepreneurs create startups, investors invest. As long as consumers want what is offered to them, it can last a long time.

What will consumers want?

For some time now, consumers around the world have been spending more on skincare than any other aspect of the beauty industry. This is clearly what they wanted until now.

The focus on skincare has also worked well to make online shopping easier because, unlike many cosmetic products, you don't need a beauty bar to decide whether or not to buy.

But growth in other subsectors, including color cosmetics, fragrances, deodorants, sun care and men's grooming, is expected to outpace skin care through 2028, according to Euromonitor's presentation at the Beauty Matter Future Fifty event last week.

Even more so than the faster-growing product categories, when you look more closely at what consumers are interested in, you start to see a shift away from how traditional beauty products were created and sold.

Euromonitor surveyed consumers on their perceptions of health and well-being. A majority of consumers said “being healthy” meant mental well-being, feeling good, having a healthy immune system, emotional well-being and freedom from illness.

A whopping 80% or more said they would pay more for personalized products based on DNA testing or detailed hair or skin diagnosis, medical approval or drug formulation. But most beauty and wellness products aren't sold that way. Many consumers want it and are willing to pay for it, but they don't get it.

The top medical concerns for older consumers were menopause and joint/muscle pain, while for younger consumers it was stress, anxiety and menstrual pain.

But when industry respondents were asked about the biggest new product or service launches in the most recent year, the largest number (more than 40%) cited new formulations and packaging durable.

Disconnection and opportunity

The beauty industry markets products to help consumers look better, but in recent years, and particularly as the emphasis on skin care has increased, the marketing emphasis focused on health, well-being and healthy-looking skin.

But consumer interest in health and wellness focuses on things the beauty industry doesn't pay attention to. This is a missed opportunity.

Consumers want real, proven solutions to medical and emotional problems. But the industry is focusing on new formulations for existing products.

The industry's approach will continue to generate success for some time to come. But he is missing a huge opportunity.

Many startups are using DNA and analysis of hair and skin to create more in-depth, personalized solutions. The big players are getting into this, but younger, smaller companies are focusing much more on this area.

What these companies do will resonate with consumers because it addresses the wellness issues they care about. Big beauty companies could do it too, but they should focus on wellness inside the human body and not just on the surface.