The health and beauty industry has seen rapid growth in the past decade, with this expected to continue in the future. The DTC global e-commerce leader ESW recently released its Global Voices 2022 summary “Survey Report: What Health and Beauty Shoppers Expect,” reflecting on this development. In 2021 alone, the industry’s market value is estimated by researchers to have reached over $510 billion and is expected to expand to $785 billion by 2025.
The survey also found that a large majority of shoppers currently would rather shop in-store for their health and beauty purchases; however, the number of consumers shifting to online shopping is currently on the rise and is only expected to grow further. According to Euromonitor International, 34% of beauty shoppers are making purchases online or making purchases based on online research. In the next three years, it is predicted that 23.3% (a quarter) of the total worldwide health and beauty market will come from e-commerce. The pandemic had a large impact on this. To keep tabs on the growth, ESW surveyed over 14,000 respondents across 14 countries to investigate how recent events have affected their spending and saving, shopping habits, and plans for the future of shopping.
Percentage of consumers buying health and beauty products by generation:
- Gen Z – 94%
- Millennial – 95%
- Gen X – 89%
- Boomers – 76%
Percentage of consumers shopping cross-border:
- Gen Z – 34%
- Millennials – 36%
- Gen X – 23%
- Boomers – 15%
Cross-border shopping has increased across all ages. Gen Z and millennial shoppers have proven to be the most likely to shop outside of the country they reside in. Both age categories have shopped cross-border for their health and beauty products by more than double the percentage of boomers doing so.
Increase in generations shopping internationally from last year:
- Gen Z – 4%
- Millennials – 5%
- Gen X – 2%
Women make up the bulk of cross-border beauty purchasers (58%). Cross-border consumers are most common in the United Arab Emirates and China, with 57% and 55% of their respective shoppers making category purchases. These are the only countries in which more than half of online shoppers make purchases from foreign countries. Cross-border purchases of health and beauty items are made by 20% of customers in North America, Europe, and Australia on average. Mexico, South Korea, Russia, and India, which all have around a third of their consumers purchasing health and beauty products outside of their borders, may represent an unexplored opportunity for businesses.
The United States dominates the health and beauty industry through purchase power.. In Mexico, 84% of respondents bought from their northern neighbor, but 84% of South Korean buyers bought from the United States as well. South African consumers (75%), Chinese shoppers (69%), Canadian shoppers (68%), Indian shoppers (64%), and Australian shoppers (62%) also look to the United States for health and beauty products. China, on the other hand, receives a sizable amount of cross-border sales from South Africa (60%), Russia (76%), and Mexico (54%).
Cross-border buyers not only use social media and a range of retail websites more than domestic shoppers, but they also buy in larger quantities. In the previous year, 48% of health and beauty customers made 11 or more online purchases, compared to only 25% of those who only bought in-country.
The next sets of data look at consumers shopping inside and outside their home countries.
Percentage of consumers shopping by gender:
- Women: outside (58%), inside (50%), none (28%)
- Men: outside (41%), inside (49%), none (72%)
- Identify in another way or prefer not to say: outside (1%), inside (1%), none (0%)
Percentage of consumers shopping by marital status:
- Single: outside (29%), inside(32%), none (29%)
- Married: outside (55%), inside(49%), none (45%)
- Domestic partnership: outside (9%), inside (10%), none (11%)
- Other: outside (7%), inside (10%), none (15%)
When it comes to discovering new brands and goods, health and beauty customers rely on social media more than any other category. Across every social channel, consumers shopping on international sites use social media at a higher rate than shoppers buying from their own country. Instagram and TikTok are some of the most popular platforms for discovering new brands.
Channel use for finding new brands and products:
- Instagram: outside (54%), inside (49%), none (33%)
- Twitter: outside (28%), inside (17%), none (7%)
- TikTok: outside (36%), inside (22%), none (10%)
- Pinterest: outside (19%), inside (13%), none (7%)
Health and beauty customers plan to spend slightly more in the next 12 months, according to the Global Voices Q4 2021 study. While 49% of cross-border buyers intend to spend the same amount as last year, 28% expect to spend more. This is 11% more than domestic health and beauty buyers who want to boost their online spending, and nearly 20% more than shoppers who say they don’t buy in the category.
Lockdowns and restrictions imposed during the global COVID-19 outbreak hastened the trend to greater online shopping, and many of these habits are predicted to persist. 40% of cross-border health and beauty customers said they’ll do more online buying since it’s more convenient than shopping in stores. 35% say they’ll spend more money on gifts for family and friends, and another 35% believe they have more disposable cash, which is 14% more than their domestic counterparts.
Overall, the report confirms that health and beauty is taking a shift towards an online purchasing dominance, with the industry expected to increase rapidly in value in the coming years.