AI in Beauty and Cosmetics Global Market Opportunities and Strategies to 2033

This report describes and explains the AI in beauty and cosmetics market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global AI in beauty and cosmetics market reached a value of nearly $3.2 billion in 2023, having grown at a compound annual growth rate (CAGR) of 14.3% since 2018. The market is expected to grow from $3.2 billion in 2023 to $7.8 billion in 2028 at a rate of 19.6%. The market is then expected to grow at a CAGR of 17.8% from 2028 and reach $17.7 billion in 2033.

Growth in the historic period resulted from the increased demand for personalized beauty, growing importance for sustainable personal care ingredients, increasing incidence of hair loss and increased prevalence of skin-related disorders. Factors that negatively affected growth in the historic period was lack of skilled workforce and high cost of ai implementation.

Going forward, growing e-commerce sector, increasing adoption of augmented reality in shopping, increasing aging population and increasing disposable income will drive the growth. Factor that could hinder the growth of the AI in beauty and cosmetics market in the future include data privacy concerns.

The AI in beauty and cosmetics market is segmented by type into personalized recommendation tools, performance marketing measurement platforms, demand forecasting and supply chain tools, real-time customer service platforms and AI-based beauty devices. The personalized recommendation tools market was the largest segment of the AI in beauty and cosmetics market segmented by type, accounting for 38.7% or $1.2 billion of the total in 2023. Going forward, the personalized recommendation tools segment is expected to be the fastest growing segment in the AI in beauty and cosmetics market segmented by type, at a CAGR of 21% during 2023-2028.

The AI in beauty and cosmetics market is segmented by distribution channel - retailers into specialist retail stores, supermarkets and hypermarkets, convenience stores, pharmacies and drug stores, online retail and other retailers. The supermarkets and hypermarkets market was the largest segment of the AI in beauty and cosmetics market segmented by distribution channel - retailers, accounting for 35.9% or $688.9 million of the total in 2023. Going forward, the online retail segment is expected to be the fastest growing segment in the AI in beauty and cosmetics market segmented by distribution channel - retailers, at a CAGR of 22.3% during 2023-2028.

The AI in beauty and cosmetics market is segmented by end-user into skincare, haircare, make-up, fragrances and other end-users. The skincare market was the largest segment of the AI in beauty and cosmetics market segmented by end-user, accounting for 42.2% or $1.3 billion of the total in 2023. Going forward, the haircare segment is expected to be the fastest growing segment in the AI in beauty and cosmetics market segmented by end-user, at a CAGR of 21.6% during 2023-2028.

North America was the largest region in the AI in beauty and cosmetics market, accounting for 35.8% or $1.1 billion of the total in 2023. It was followed by Asia Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the AI in beauty and cosmetics market will be Asia Pacific and Western Europe where growth will be at CAGRs of 21.7% and 19.3% respectively. These will be followed by Eastern Europe and South America where the markets are expected to grow at CAGRs of 19.1% and 18.7% respectively.

The global AI in beauty and cosmetics market is fairly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 30.19% of the total market in 2022. Elizabeth Arden Inc was the largest competitor with 4.02% share of the market, followed by Beiersdorf AG with 3.28%, Proctor And Gamble Company with 3.17%, Sephora Inc with 3.17%, Shiseodo Co Ltd with 3.14%, L'oreal SA with 3.12%, Estée Lauder with 3.07%, Givaudan with 2.90%, Coty Inc (Rimmel) with 2.15%, and Symrise (Philyra) with 1.88%.

The top opportunities in the AI in beauty and cosmetics market segmented by type will arise in the personalized recommendation tools segment, which will gain $2 billion of global annual sales by 2028. The top opportunities in the AI in beauty and cosmetics market segmented by distribution channel - retailers will arise in the supermarkets and hypermarkets segment, which will gain $1 billion of global annual sales by 2028. The top opportunities in the AI in beauty and cosmetics market segmented by end-user will arise in the skincare segment, which will gain $2 billion of global annual sales by 2028. The AI in beauty and cosmetics market size will gain the most in the USA at $1.4 billion.

Market-trend-based strategies for the AI in beauty and cosmetics market include introducing AI-powered virtual try-on technologies to revolutionize the shopping experience, focus on ai and AR-powered SaaS to provide subscription-based service, strategic partnerships among market player and introduction of ai-powered skincare systems for detailed skin analysis.

Player-adopted strategies in the AI in beauty and cosmetics market include focus on expanding operational capabilities and market position through strategic innovations and new product launches, enhancing business capabilities through partnerships and collaborations.

To take advantage of the opportunities, the analyst recommends the AI in beauty and cosmetics companies to focus on leveraging AI-powered virtual try-on technologies, focus on advancing AI and AR-powered SAAS solutions, focus on advancing AI-powered skincare systems, focus on personalized recommendation tools segment, expand in emerging markets, continue to focus on developed markets, focus on strategic partnerships for AI-based solutions, focus on online retail segment, provide competitively priced offerings, focus on strategic pricing for competitive advantage, participate in trade shows and events, continue to use B2B promotions, focus on digital marketing channels, implement personalized promotional strategies and focus on haircare segment.