Global Artificial Intelligence (AI) In Beauty and Cosmetics Market 2024-2031

Global Artificial Intelligence (AI) In Beauty and Cosmetics Market 2024-2031

Global Artificial Intelligence (AI) In Beauty and CosmeticsMarket Size, Share & Trends Analysis Report byProduct Type(Regular Tea, Artificial Intelligence (AI) In Beauty and Cosmetics Beverages, Food, and Personal Care & Cosmetics), by Form (Powder, and Liquid Source) and by Distribution Channel (Hypermarket/Supermarket, Speciality Retail Stores, Online Retail Stores, and Others)Forecast Period (2024-2031)

Global AI in beauty and cosmetics market is anticipated to grow at a significant CAGR of 19.6% during the forecast period (2024-2031). The market’s growth is attributed to growing demand forAI technologies by beauty brands to provide personalized beauty solutions by analyzing consumer data such as skin profiles and preferences..According to the National Institute of Health (gov.) in September 2021, the deployment of AI in the retail sector has shown promising results, particularly in targeting the top 1.0% of customers who generate significant value for retailers. By utilizing AI-powered chatbots, content generation, and customer insights, retailers have been able to achieve extreme personalization and increased engagement. It is projected that the spending on AI in the retail sector will significantly increase, with an estimated $7.3 billion by 2022 and global spending on AI services reaching $12 billion by 2023. Additionally, it is expected that over 325,000 retailers will adopt AI technology during this period.

Market Dynamics

Increasing Adaptability Amid Economic Storms

The beauty industry exhibits resilience during economic downturns, with consumers prioritizing personal grooming and self-care, driven by the perception of beauty products as essential for self-esteem and well-being. According to the McKinsey & Company, in May 2023, skincare, fragrance, makeup, and haircare form an a component of the beauty industry, which has grown steadily and resiliently even in bad economic times. The market has received interest from a variety of sectors, including finance and entertainment, with projections indicating that it is projected to reach approximately $580 billion by 2027, rising at an estimated pace of 6.0% each year. This rise is comparable to, or marginally higher than, that of other consumer segments, such as clothing, accessories, footwear, pet supplies, and food and beverages.

Market Segmentation

Our in-depth analysis of the global AI in beauty and cosmetics market includes the following segments by product type, form, and distribution channel:

Based on product, the market is sub-segmented into personalized recommendation tools

performance marketing measurement platforms, demand forecasting and supply chain tools, real-time customer service platforms, and AI-based beauty devices.

Based on application, the market is augmented into skincare, haircare, make-up, fragrances, and others (nail care,oral care, and body care).

Skincare is Projected to Emerge as the Largest Segment

Based on the application, the AI in beauty and cosmetics market is sub-segmented into skincare, haircare, make-up, fragrances, and others. Among these, the skincare sub-segment is expected to hold the largest share of the market. The primary factor supporting the segmental growth includes the increasing demand for the innovation in product development. AI technologies improve the production of skincare and cosmeceutical products by identifying market trends, improving ingredient formulas, and assessing consumer feedback. This allows for the customization of products for both male and female consumers. According to the International Journal Of Community Medicine And Public Health (IJCMPH), in December 2023, the study involved a total of 171 participants, with 24.6% identified as male and 75.4% as female. It was observed that there was a high level of awareness (100.0%) and utilization (60.8%) of essential skincare products, with females showing a higher tendency to use cosmeceuticals. Cleansers, moisturizers, and sunscreen were found to be the most valued and incorporated into daily skincare routines (100% usage). The study reveals gender disparities in product usage, emphasizing the need to promote responsible consumer practices in skincare and cosmeceutical products.

Fragrances Sub-segment to Hold a Considerable Market Share

The AI-powered fragrance platforms can provide personalized scent recommendations, analyzing consumer data and preferences, catering to diverse tastes and preferences, including unisex and inclusive options towards the consumer prefernces drives the market gowth. According to the HW Harries Williams and Nicole Kirichanskaya Article, in August 2022, the demand for fragrances marketed as suitable for all genders saw significant growth, with unisex fragrances experiencing a 46.1% increase year-over-year (YOY) and unisex perfumes seeing a YOY increase of 38.4 percent. Boy Smells, a brand known for its inclusive fragrances, demonstrated remarkable growth, with a staggering 302.1 percent increase in sales from 2021 to 2022.

Regional Outlook

The global AI in beauty and cosmetics market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia), and the Rest of the World (the Middle East & Africa, and Latin America).

Asia-Pacific

The Asia-Pacific region is experienced rapid urbanization and rising disposable income, driving a surge in demand for beauty and cosmetics products, including AI-powered ones, in countriessuchas,China, Japan, South Korea, and India.

According to India Brand Equity Foundation (IBEF), and Euromonitor, in June 2023, India's beauty market is expected to grow from $ 15.6 billion in 2022 to $ 17.4 billion by 2025 as a result of rising income levels, internet availability, and a young population.

North America Holds Major Market Share

Among all the regions, North America holds a significant share owing to the increasing consumer demand for personalized beauty products. According to the ArticleCosmetics: A Bright Foundation for Growth via M&A, in June 2023, cosmetics sector within the beauty industry is experiencing remarkable growth. In 2022, it achieved a 12.0% increase in sales, reaching $25.6 billion in US retail sales, making it the highest-grossing category in beauty. The US prestige makeup sales growing by 24.0%, while mass makeup sales increased by 15.0%, capturing almost one-third of all US beauty sales.

Market Players Outlook

The major companies serving the global AI in beauty and cosmetics market includeAiirLtd.,Perfect Corp.,HiMirror,L’OréalS.A, and UnileverGroup, among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance,in January 2023, Perfect Corp. and The Good Glamm Group have partnered to launch virtual try-on and AI Skin Analysis experiences, revolutionizing online shopping for D2C brands, offering personalized, interactive experiences.

The Report Covers

Market value data analysis of 2023and forecast to 2031.

Annualized market revenues ($ million) for each market segment.

Country-wise analysis of major geographical regions.

Key companies operating in the global AI in beauty and cosmetics market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.

Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.

Analysis of market-entry and market expansion strategies.

Competitive strategies by identifying ‘who-stands-where’ in the market.