The beauty industry will be one of the first to return to pre-COVID-19 levels globally, and the rebirth will be driven by the Asia-Pacific region, which has been the world's largest cosmetics market for years. In fact, the top experts in the industry started noticing important signals of recovery in this part of Asia already in late 2020. According to the most recent studies by Euromonitor International, a research agency that studies the main markets, even though 2020 was a dark year for the economy, the cosmetics sector was worth $176.9 billion in the APAC area, having grown by 1.6% compared to 2019. The industry is continuing the path to recovery in early 2021 as well, while forecasts for the coming months underscore the significant drive that the region has provided for the whole sector: Euromonitor expects the sector to be worth $189.4 billion by the end of 2021, with growth at 9.1% compared to last year. The sector is expected to grow by another 5.2% in 2022 for a total value of close to $200 billion.

The key sectors of the APAC market

Mass market is the main driver: with an average yearly growth rate of over 5% from 2016 to 2019. With the pandemic the growth rate dipped slightly but still managed a +1.8% between 2019 and 2020, despite the health emergency. Mass market is expected to be worth 105.8 billion dollars (+4.3%) in 2021 and will continue to grow to $108.7 billion in 2022. Improved financial conditions and the progressive evolution of rural areas have favored the consumption of base products over the past years, while the pandemic has further highlighted the importance of cleanliness and personal care. As might be expected bath & shower and oral hygiene products are also on the rise. Over the course of 2020, the bath and shower sector grew to be worth 14.4 billion, 6.4% growth compared to the previous year, while oral care was worth 16.8 billion and will come close to 18 billion by 2022. The hair sector is also growing steadily and is worth over $26 billion with an average growth forecast of 2% for the 2019-2022 three-year period. 

Skincare and Premium Beauty are however the categories that have seen the greatest boom. Skincare products, which had an average Compound Annual Growth Rate (CAGR) of 7.8% from 2016 to 2019, resisted the impact of COVID-19 with a +1.4% for 2019-2020, while for 2021 Euromonitor has announced a growth rate of 12.3%. By the end of the year the sector will grow from about $75 billion to over $83 billion, with an additional +6.2% expected for 2022 for a final value of $88.4 billion. The development of the middle class and of the local bourgeoisie has driven the rise of Premium Beauty: from 2016 to 2019 the CAGR achieved an average of 11.6%, maintaining a constant yield throughout 2020, but the greatest growth in the sector belongs to the 2020-2022 two-year period: +20.3% from 2020 to 2021 and a yearly growth forecast of 9.7% for 2021-2022. The sector will be worth close to $70 billion in 2022.

The APAC area is an important case study for trends in the makeup and color sector, one of the hardest hit by the crisis. Makeup and color experienced the worst drop in 2020 (-4.2%), but growth for 2021 is forecast at 16.1% with an additional +7.5% in 2022, when the sector will be worth $27.7 billion.

The birthplace for new trends: strategic countries in the region

The Asia-Pacific region gave birth to the trends that have revolutionized the cosmetics industry over the past decade. This is where K-Beauty and J-Beauty first developed, bringing ancestral traditions into personal care. Both South Korea and Japan continue to be important markets for the area. The Korean industry was worth $13.3 billion dollars in 2020, and predictions for the coming months suggest a stable sector, with growth remaining between 0.4 and 0.6%.

Japan was far more affected by the pandemic. The sector experienced a 7.9% drop from 2019 to 2020 and closed the year with revenue at $35.8 billion. Still, the land of the rising sun is ready for recovery: Euromonitor predicts +10.5% growth for 2021, while the entire sector will surpass $40 billion in revenue in 2022. 

The People's Republic of China, however, is the country driving progress in the region. A nation of strategic importance for the global economic balance, from 2016 to 2019 China experienced double digit growth rates, and maintained a +6.7%growth rate in 2020, largely because the wealthier classes shifted consumption from international markets to the domestic market. Over the 2019-2022 three-year period, Euromonitor estimates an average yearly growth rate of 10% with revenue growing to $89.2 billion in 2022.

The experts agree: China will lead the growth of the entire region for the near future. C-Beauty is no longer a local phenomenon, but a reality that reveals the trends and changes that are on the horizon for the global cosmetics industry.

All data and insights are proprietary information from Euromonitor International.

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