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Sustainability and tech to drive beauty industry growth, says THG Ingenuity

Sophie Smith
19 October 2022

The global beauty and personal care industry is expected to grow by nearly 6% annually through 2026, according to a report by THG Ingenuity

With the pandemic limiting face-to-face interactions, digital channels have experienced growth as millions of consumers shifted towards online shopping. As a result, beauty ecommerce is expected to grow three times faster than store-based retail over the next four years, with online operations projected to account for nearly 30% of global beauty sales.

By 2025, the social commerce opportunity for brands is expected to climb to $1.2 trillion. With the number of people using social media worldwide projected to increase to 5.85 billion by 2027, THG Ingenuity says the social media opportunity for beauty brands to reach new consumers, create omnichannel shopping experiences and generate higher revenue is growing every year.

Environmental & Social

Issues including transparency, diversity and inclusion are key factors shaping brands’ strategic and business decisions. 84% of Millennials claim that sustainability influences their purchase decisions, with 60% of Gen Z and Millennial consumers saying they pay attention to how a product is made or sourced.

In addition, 74% of consumers are willing to pay more for sustainable packaging, which has led to increased efforts and research by beauty brands to offer and develop eco-friendly alternatives.

41% of UK consumers now value beauty brands committed to ethical working practices, with 36% also willing to pay more for brands that respect human rights.

THG Ingenuity expects to see an increased demand for clean beauty products, with the natural cosmetics segment anticipated to reach nearly $55 billion by 2027.


The rise of virtual makeup try-ons and technologies, including augmented and virtual reality, are changing the way beauty shoppers discover and connect with brands, with three quarters of consumers now expecting retailers to offer AR experiences.

The global beauty devices market is expected to reach $144 billion by 2028, with the APAC region set to experience the fastest growth between 2025 and 2030.

The availability of branded beauty devices on online channels will also further increase the projected growth of the segment.

Read's feature on how AI and AR are revolutionising the beauty industry.

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