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HomeCompaniesBeauty and personalcare industry to touch $660 b by 2027: report

Beauty and personalcare industry to touch $660 b by 2027: report

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The beauty and personal care (BPC) industry is set to reach a total market size of $660 billion by 2027, resulting in a $2.2-2.7-trillion total market valuation, according to the Redseer and Peak XV Report.

The BPC market has been on a resilient path in the face of global disruptions brought about by lockdowns in 2020–21 . The industry was affected marginally, while the broader economies were much more severely affected.

In fact, brands that are solely focussed on BPC (pure-play BPC brands) have disrupted the market by targeting specific use cases, leading to higher growth rates, gross margins, and profitability compared to FMCG-led BPC players. The report states that the average revenue growth of the largest pure-play BPC players was five times than that of the largest FMCG-led BPC players (2017-22).

“Globally, there’s a growing need among consumers for products ‘made for them’, tailored to individual skin or body types. They are increasingly willing to pay premiums for effective and safe solutions, leading to rapid growth in the mass market and premium categories,” said Rohan Agarwal, Partner, Redseer Strategy Consultants.

Indian BPC market

India has the highest BPC growth rate (CAGR of 10 per cent in 2022–2027) compared to other countries, including Indonesia at 8 per cent and China at 7 per cent. The Indian BPC market is projected to be worth $30 billion by 2027, making up about 5 per cent of the global opportunity.

Moreover, due to the low penetration, the BPC industry in India has stronger growth opportunities. On per capita BPC spending, while the US leads at $313 and China at $38, India lags significantly at just $14. The online channel is significant for BPC in India, as it is projected to become a $10-billion market by 2027, accounting for roughly 33 per cent of the market by then.

Similar to the global market, pure-play BPC brands are leading the disruption in India. The report states that the Indian BPC market is growing at a rate twice as fast as FMCG-led brands, signalling the significance of specialised, BPC-focussed players.

As the Indian BPC market matures, the report anticipates the emergence of multiple hundred-million-dollar pure-play BPC brands.

The BPC landscape’s transformation has also led to the introduction of brands such as L’Oréal, Nykaa, Honasa, and Pure Play Skin Sciences with niche offerings.

“From acne management to anti-ageing solutions, specialised use cases are where we’re seeing a lot of the action. Brands are spending a significant portion of their resources and organisation bandwidth on new product development, R&D, and customer insights to drive more efficacious products to a targeted audience,” said Sakshi Chopra, MD, Peak XV.

In 2022, the average gross margin for major pure-play BPC companies globally was significantly higher (72 per cent) than that of FMCG-led BPC companies (44 per cent).

Despite their heavy investments in research and development and customer education, these pure-play companies maintain bottom lines that are competitive with FMCG-led companies. The average EBT (earnings before taxes) stands at 12 per cent for large pure-play BPC companies globally, compared to 14 per cent for FMCG-led companies.

This results in pure-play BPC companies being valued better. The price-to-earnings (P/E) ratio for the large pure-play BPC companies globally is approximately 1.8 times that for FMCG-led BPC companies (51 vs. 28).





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