Beauty is a beast

The global consumer beauty industry is a multibillion-dollar beast, fast-growing and constantly evolving, with influencers and a flood of new brands challenging the old faithfuls.

Where it was once daughters following what their mothers used, moms are now being informed by the younger generation, who pick up products and information from social media. 

The retail landscape is shifting. Online sales have become a major channel, with digital innovations such as “virtual try-on”. According to L’Oréal Paris, this tool is “an immersive makeup simulator that lets you try on makeup virtually. It uses augmented reality technology to create highly realistic virtual makeup applications to enrich and assist your beauty experience.” Products can then be selected and ordered online.

But physical retail also remains relevant and important for consumers, with demand for more experiential spaces and interactive experiences. 

The three major categories in the beauty business are fragrance, makeup and skin care, spread across markets broadly classified as luxury, “mass-tige” (the crossover point between prestige and mass) and mass. (Generally, hair care is reported separately from the beauty market, with different drivers.) 

There was a surge of interest in beauty in the post-Covid period, notably in the US, Europe and Japan. The market recovered to exceed pre-pandemic levels in 2022, according to research company Trade Intelligence. In South Africa, the personal-care, beauty and health-care market generated an estimated R78bn in turnover in 2022, with personal care the biggest contributor at 47%. Beauty was the fastest-growing segment, up 28.6%. 

By the end of 2024, the global beauty industry was valued at $548bn, according to data and analytics firm Euromonitor International. That was up 4.5% from the year before, propelled by the rise of social commerce platforms such as TikTok Shop; increased consumer interest in wellness and prevention of ageing; and demands for luxury and science-backed skin-care products.

The beauty industry is often considered recession-proof, but it should rather be seen as recession-resistant, says Kerry Evans, a senior executive in the beauty sector who has worked with premium brands in South Africa and the UK, including Avon, Jo Malone London, Bobbi Brown Cosmetics and Estée Lauder. 

During economic downturns, she says, there’s the “lipstick effect” — a term coined by Leonard Lauder, son of Estée Lauder, founder in 1946 of the global empire that bears her name. In hard times, consumers boost their mood by treating themselves with smaller luxuries such as makeup or skin care, instead of more expensive items such as designer clothes or vacations.

Other factors drive this resilience. Beauty and personal-care products such as shampoo, skin-care and hygiene products are considered essentials. The industry spans a wide range of price points, allowing it to capture consumer spending even if budgets tighten.

There is global demand across different economic environments, particularly in emerging markets where growth potential is high. And there is “omnichannel resilience” — with strong online sales channels, beauty brands can maintain sales even if brick-and-mortar outlets suffer during downturns. However, high-margin premium brands may suffer if consumers trade down in tough times. 

“It’s been quite a shift in the past few years with the influence of TikTok and social media,” says Evans. “Everyone over the age of 30 is seemingly more sceptical, but members of Gen Z [born between 1997 and 2012] embrace what is trending globally and locally on TikTok and other social and digital platforms. They buy off influencer recommendations.”

Globally there’s been an explosion of new entrants into the beauty space, which is often celebrity-driven. 

Kylie Jenner, of the TV “reality” show Keeping Up with the Kardashians, founded Kylie Cosmetics (“Made without cruelty and crafted with love!”) in 2015 when she was 18. She is a millionaire many times over and the fifth-most-followed person  on Instagram.

Selena Gomez, an American actress, singer, songwriter and producer, founded the Rare Beauty cosmetics company (“Makeup made to feel good without hiding what makes you unique”) in September 2020. Its growth was driven largely by Gomez’s presence on social media, with 420-million Instagram followers. In 2024 Time magazine recognised Rare Beauty as one of the most influential companies of the year.

Hailey Rhode Bieber, a model and the wife of Canadian singer Justin Bieber, launched her own skin-care line, Rhode (“Designed to nourish your skin barrier, giving instant dewy glow”) in 2022. Actress Gwyneth Paltrow founded Goop (“We curate the best in clean beauty and also make our own line of glow-inducing skin care”), which has become synonymous with high-end wellness trends. 

Evans says these brands are often not only fronted by celebrities, but are also backed by rigorous clinical testing, delivering on consumer expectations on ingredient transparency and product performance promises.

Growth in the men’s category has been significant. Evans says: “In the luxury space, it started with Tom Ford almost dabbling with skin care. He made it almost OK for men to moisturise their skin. There has been real interest among men to care for their skin, and brands across price points have embraced this.” 

Ford, an American fashion designer and filmmaker, launched his eponymous brand in 2005, having previously been the creative director at Gucci and Yves Saint Laurent. Some Tom Ford men’s fragrances retail online for tens of thousands of rand. 

As with women, the change in behaviour among men has been driven by celebrities. Harry Styles, an English singer, songwriter and actor, has his own skin-care brand called Pleasing. Former England footballer David Beckham and American musician, rapper and record producer Pharrell Williams are among “the many celebrities who’ve enabled everyone to feel better, transferring into makeup and looking your best self”, says Evans. 

Globally, the fragrance sector, including “lifestyle scents” derived from candles, diffusers and room sprays, is outperforming skin care and makeup. “Gen Z are driving the growth of particularly luxury fragrances and this is across genders,” says Evans.

The number of brands in the mass-tige space has increased, says Evans. “The entry price point brands, what we call democratised beauty, is also really buoyant. Revlon and Avon direct-to-consumer are still doing incredibly well. The entire sector is performing.”

The most influential and biggest brands at the luxury end of the market in South Africa include Chanel, Dior and Estée Lauder. 

When Evans left Estée Lauder South Africa 11 years ago for the UK, the group was the No 1 brand in the country. Retail market leaders in the sector at the time were Red Square (owned by Edgars) and Truworths, Foschini and Stuttafords. Takealot and other big courier operations were still developing, so most sales were still over the counter. 

A decade on, the landscape has changed. Department stores that were stalwarts of cosmetic sales have closed. The UK saw the demise of Debenhams and the House of Fraser. In the US, Macy’s closed many of its stores, and Lord & Taylor shut down. Locally, Edcon and Stuttafords closed shop, though Edgars still exists and its Red Square offering has been rebranded to Edgars Beauty.

Purchase of cosmetics used to be driven mainly by dedicated beauty consultants who worked exclusively for brands within department stores. Today, staff generally work across beauty departments. Since Covid, consumers have embraced what is known as omnichannel shopping. 

The physical store space is now one of “edutainment” and discovery, says Evans. Customers are demanding more memorable retail experiences and staff who are more informed. The bar has been raised when it comes to fulfilling consumer service expectations.

Sandy Sutton, a retail analyst at Trade Intelligence, says South African health and beauty product shoppers are now more informed and discerning, driven by easy access to information about ingredients and formulations. “This heightened awareness presents both challenges and opportunities for suppliers,” she says in a report on the sector. There’s more interest than ever on value promotions and private brand offerings. 

Today the big beauty retailers in South Africa are Clicks and Dis-Chem, Woolworths, TFG, Edgars and Truworths. New entrants into the world of specialised high-end cosmetics and skin care and fragrances in South Africa include Skins and ARC Store. 

Beauty and personal care sales were worth R42.3bn in South Africa in 2015, according to Euromonitor International. That is expected to be R77.3bn this year, forecast to reach R98.2bn in 2028.

Euromonitor says the super-premium beauty and personal care segment (luxury brands such as Chanel, La Prairie and Hermès Beauty) was worth R2.7bn in South Africa last year. Premium brands (Estée Lauder, Clinique and MAC) had sales of R9.6bn, the prestige segment (including Chanel Beauty, La Mer and Tom Ford) generated R9.5bn and mass beauty (including L’Oréal and Maybelline) and personal care was worth R54.7bn.

Michael ten Hope, CEO of CAVI Brands, which imports and sells luxury beauty brands, says the big brand houses in this space include Estée Lauder, L’Oréal and Coty, and two independent operators Asco (African Sales Company) and CAVI with its associate company Prestige Cosmetics Group.

“I do think there are a lot of new initiatives around independent brands, a lot of new small to mid-sized brands coming into the market, which is very exciting,” says Ten Hope. “There is great innovation coming from brands and retailers alike, and this makes for better customer engagement. Beauty is also turning into a deeply personal experience, which is focusing on the emotion of feeling good instead of being only about looking good. And feeling good always looks great. 

“Brands used to launch products, and the business would be product-led as opposed to being consumer-inspired. I’d say that’s been the radical shift in the past 10 years, bringing the consumer to the centre of any product innovation or reformulation decision. Consumer-centricity is what matters most.”

Clicks is a major player in the mass-tige segment of the beauty market. It has increased exposure to the higher-end customer through The Body Shop and Sorbet, the largest professional beauty salon chain in the country, which it acquired in 2023. Clicks also has a 22% share in ARC Store, a luxury beauty store brand. 

Premium beauty and hair-care branded suppliers want their product sold at professional salons, or through a store experience such as ARC. When ARC was initially launched, it had to persuade landlords to allow it space — now that has flipped, with landlords approaching ARC.

 “The upper-LSM customer is insulated in terms of economic challenges,” says Clicks CEO Bertina Engelbrecht. She says ARC is doing “phenomenally well” and will be rolled out in a limited number of destinations. “In beauty, innovation is a key driver.” 

Events such as The Beauty Playground, organised each year by Clicks, bring together local and international beauty brands. Engelbrecht says tickets sell faster than for a Springbok rugby Test.

The beauty and personal-care category at Clicks accounts for 34% of all sales and grew by 8.2% in the six months to February 2025. In terms of market share, Clicks has 44.2% of the skin-care market, 33.1% of hair care and 22.4% of personal care. 

Since Covid, more customers are focusing on broader health, fitness, wellbeing and beauty, says TFG CEO Anthony Thunström. A proliferation of independent brands has brought a higher degree of “fashionability” to a sector once dominated by a few big names. “There’s a lot more innovation and excitement in the sector. And we’ve got a growing youth demographic, who tend to prioritise fashion and beauty and spend money on those categories.”

The South African business has extended its beauty offering, previously concentrated in Foschini, across more of its outlets in South Africa. TFG Ladies Fashion & Beauty MD Robyn Wenlock says the group is also creating more standalone store formats, expected to launch in the second half of 2025. 

Declan Kavanagh, MD of TFG’s value businesses (focusing more down-market), sees huge opportunity for beauty within the value retailers Jet and Exact, which have created their own private-label fragrances, makeup, accessories and skin care. Jet’s in-house Colour brand has seen a jump in sales.

In the six months ended September, TFG’s Africa sales grew 5.3%, driven in part by sales growth of 19% in cosmetics. 

Woolworths is also focusing on beauty as a growth driver. The group has more than 20% of the market. 

Woolworths opened its first beauty standalone store in Somerset West last year, with the vision of becoming a “Sephora-type” destination, says CEO Roy Bagattini. Sephora is a French multinational retailer of personal care and beauty products. Its main tagline is “We belong to something beautiful”, introduced in 2019 “to reinforce the company’s commitment to diversity and a more inclusive vision for retail in the Americas”.

The new Woolworths store has a range of local and international brands, supported by a new beauty research and manufacturing centre in Cape Town. The company’s beauty business has more than doubled in the past four years and Bagattini says it is on track to double again.

The private-label WBeauty range, he says, is the strongest performer and accounts for about a quarter of sales. Local brands include Skoon and Skin Functional, while Chanel, Clarins, Tom Ford and Lancôme are among the bigger brands stocked by the group.

Bagattini notes that customers are looking for personalised offerings. The group is partnering with certain brands to offer customer products as well as facial and nail experiences. The retailer also plans to add more skin care and makeup products to stores across the nine countries where it operates in Southern Africa. Botswana and Namibia are launching new ranges that include international brands. 

“Beauty is becoming a big piece of our FBH business [fashion, beauty and home], which has continued to grow very, very strongly,” says Bagattini. 

Julie Maggs, GM for beauty at Woolworths, says drivers of growth in the industry include the launch of new brands, social media trends geared towards makeup and skin care, and products that are inclusive and relevant to the South African market.

To complicate the competitive landscape, a report from Trade Intelligence notes a blurring of product categories. Take the Omega-3 capsule, for example — is it a nutritional product, or a natural medicine for arthritis? Is acne ointment a personal-care or medicinal product? Is a moisturising glossy lip balm a personal-care or cosmetic product? This creates space for innovation, not only within health and beauty, but in adjacent and seemingly unrelated categories. 

Dis-Chem CEO Rui Morais says beauty is one of the group’s core categories. “Obviously we’re a health-related group and would prioritise that, but beauty is a form of health — it’s important to us.”

There is strong growth in the beauty market in South Africa, says Morais. “I think the market needs to be unpacked and looked at slightly differently.” Some prestige brands have pulled out, while others are reducing the number of doors they sell through, to protect their brand and ensure they are not found in too many outlets. 

In the fragrance space, South Africans were big consumers of high-end or prestige fragrance. That has shifted over the past two years. There’s still a small market for that, says Morais, but “there’s this big influx into the fragrance mass market” which is priced up to about R2,000 for a product.

Truworths launched Truworths Elements, its beauty offering, in 1999. It has 84 departments within Truworths Emporium stores, with a range of premium international brands including MAC, Estée Lauder, Clinique, Clarins and Revlon and niche fashion and salon brands as well as its own range of fragrances. 

With such strong growth globally and so many old and new players, some consolidation is likely. The industry seems poised for a wave of mergers & acquisitions in 2025 and 2026. By November 2024, 57 deals had been made internationally, against 43 in the same period in 2023, according to data from investment firm Capstone Partners. 

“Investor sentiment has been cautious in 2024,” says Neil Saunders, MD and retail analyst at data research firm GlobalData. “There has been a general appetite for corporate activity, but big-scale investors have been scrutinising returns and financials and are shying away from any deals with too much risk.” 

These shifts have affected some of the top operators. 

Estée Lauder has had setbacks, dropping 45% on the New York Stock Exchange over the past 12 months. The group plans to eliminate thousands of jobs in a restructuring as new CEO Stéphane de La Faverie puts his turnaround plan into effect and spends $1.5bn on a makeover. 

And more competition is coming. Globally, online companies that have shaken up apparel retail are also heading into beauty. 

Fashion and lifestyle online retailer Shein has launched a range of makeup products and accessories called SheGlam. It’s a direct-to-consumer brand with a wide range of makeup and skin-care products, appealing particularly to young adults and teens who want budget-friendly, stylish cosmetics. 

Spanish multinational clothing company Zara has launched low-priced “dupes” (duplicates) of major beauty brands. Dupes are products that closely imitate or replicate the look, style or function of higher-priced or major brand items, and are sold at a lower price. They aren’t exact copies (hence are not counterfeit) but are often similar to expensive products. 

On the domestic landscape, local niche brands are making inroads. Beauty expert Candice-Lee Kannemeyer says the industry is exploding. Growth over the past 20 years has been “spectacular, and also local brands in terms of the ingredients and efficacy of the products are as competitive, if not better, than international brands”. 

Some standout local brands include Enough, which uses upcycled ingredients such as coffee in its formulations; Apartment; Dewdrop Skincare, which has been featured in Vogue, Vanity Fair and Glamour UK; and Skin Creamery.

Paul Steegers, senior equity research analyst at Nedbank, says the beauty sector has been one of the fastest growing for some time. “It does seem to be an area that’s attractive for the retailers. It feeds back into the Clicks and Dis-Chem structural growth opportunity, the rising middle class in South Africa and there’s the lipstick effect — people do spend more on their health and wellness including beauty, especially as income rises. It’s an area where I think there is still opportunity for rollout and the retailers are taking advantage of that”. 

Aesthetics is one of the fastest-growing sectors within the industry and is forecast to reach sales of $23bn this year, according to McKinsey. It includes nonsurgical treatments such as Botox and dermal fillers, chemical peels and microneedling as social media drives awareness of these treatments, and a younger demographic is more open to preventative and enhancement procedures at earlier ages.

Sales growth in the beauty business seems to be a given. The key metric for brands and traditional retailers, though, will be the extent to which they can grow market share, while meeting the dual consumer desire for a face-to-face experience at the same time as providing online accessibility.