Beauty & Personal Care market to grow to $34 billion by 2028: Nykaa

Nykaa released their Beauty Trend Report 2024 this week, in collaboration with Redseer, presented at the Nykaa Best In Beauty Summit 2024.

According to the report, there can be five key trends that are fuelling the momentum for India’s Beauty and Personal Care (BPC) sector, namely the rise of discretionary spends enabled by increased disposable income, the democratization of information and expertise courtesy of social media, the universal access & reach that e-commerce enables.

The rapidly growing and evolving preference for high-quality premium beauty products, and the product innovation through the advent of new formats, ingredients and concerns from audiences are also the key factors. The BPC market is to reach $34 billion by 2028, driven by the fastest expected growth of online channels at 25% CAGR. There is a heightened increase in skincare demand and the consumer preference weighs towards personal care.  

India is the fastest-growing BPC market globally. As the world’s fourth largest beauty market, it is at the curve peak because of premiumization and evolution of technology in India. The channel switch from offline retail and large brands to e-commerce and global brands in the last decade indicates both channel and brand evolution. Rather than quick commerce, e-commerce is poised to be the biggest driver of the beauty segment as it will contribute the most to BPC sales by 2028, which is 33%. India has had more than 550 million social media users since 2023 and the number is on a rapid roll.  

There are various factors contributing to the evolution of the consumption of beauty in India. The rise of premium beauty consumption as the online premium beauty brand consumption is going to grow 21-22% till 2028. The credit for this has to be given to the change in the Indian consumer attitude, it’s not just a product that they look for, now, it’s the experience. Brands are seeding premiumization through reimaging product-market fit to make it in accordance with the user gratification factor, striking up a local chord like doing campaigns around local festivals that create connections and expanding brand presence across platforms and different tier audiences. Propelled by rising incomes, growing aspirations and the physical retail presence of beauty brands, has caused a boom of beauty in tier two and three, which has been one of the biggest contributors to the evolution. 

The increased beauty platforms enlarging the marketing ecosystem, things like the ‘Stepification’ of the beauty routine & innovation in beauty like the consumers adopting sophisticated, multi-step beauty routines and day-night skincare ranges, expanding their beauty baskets with niche and creative product ingredients specification-wise. 

With the focus shifting to adapt to the GenZ and young millennials of Indian (28-30% of the population) as the new digitally native generation that has seen beauty online first, there are brands creating and changing trends, for example, the ‘very demure makeup’ and the popularity of micro trends that keep evolving weekly has helped the brands grow their popularity. Homegrown labels and going local are a few trends that have boosted the Indian market and the new brands that have the Indian touch to them and restore Indian culture and Ayurveda.

Influencers on a small level called micro-influencers are proving to be more effective in the propagation of brands, rather than big names. The spending on social media influencer marketing has increased substantially. Nykaa also reports highlighted how the intersection of beauty and technology has contributed a lot to this expansion. The systems have become more agile, intuitive and user-friendly to attract and accommodate a much larger audience.