The beauty industry’s period of sustained growth is waning, forcing the industry to rethink the tried-and-tested beauty playbook. The State of Fashion: Beauty, the latest report from The Business of Fashion (BoF) and McKinsey & Company, predicts beauty growth to slow to 5 percent per year through to 2030, down from 7 percent between 2022 and 2024. The report was unveiled today at The Business of Beauty Global Forum 2025 at Stanly Ranch in Napa Valley, California.
The $441 billion global beauty industry enjoyed a reputation as being “recession-proof,” but political and economic volatility will make some consumers think more carefully about their purchases. Perceptions of value will differ across income levels, and higher-priced brands will need to demonstrate differentiation as well as superior performance.
Value over hype: Cost-conscious consumers grow more selective
In an unstable environment with reduced spending power, consumers are becoming increasingly attuned to the “true value” of products, a shift that is top of mind for the industry. 75 percent of executives expect consumer scrutiny on value to be the biggest force influencing the industry in the mid-term, while 54 percent cite a reduced appetite to spend as the biggest risk to the market’s growth. In addition, “dupe” culture is growing; 53 percent of consumers are open to buying “dupes” of higher-priced products.
In response, beauty leaders are for now focusing on increasing sales volume instead of hiking up prices and further alienating customers. Premium brands will need to highlight their unique defining factors to stand out in a crowded market.
Tried-and-tested marketing needs a refresh
Growth marketing is becoming increasingly costly and less effective, while the power of influencers is tempering: in 2025, only 25 percent of consumers in the US, China and Europe say they look to influencers for beauty ideas, down from 33 percent in 2023. To stand out, brands must lean into creativity and originality to spotlight their authentic stories and customer connection.
Additionally, beauty labels need to develop a deeper understanding of consumers beyond basic demographics, creating customer segments based on needs instead — many of which are shared across different age and racial groups.
Luxury brands, in particular, will feel the pressure to hone positioning. With around 50 percent of consumers showing interest in personalised beauty, high-end brands are well equipped to deliver on cost- and time-intensive products.
Founder influence can propel growth in the short-term, but staying power requires more
Over the last decade, a proliferation of founder-led beauty brands flooded the market. While their celebrity and influencer appeal, built-in audience and often sizeable social media presence may seem like an obvious formula for success, the report finds the long-term appeal of founder or celebrity-led beauty brands can be limited. Only 13 percent of consumers cite a brand’s founder as a key reason for buying from their favourite line, compared to 39 percent who cite product performance and 24 percent who name price.
At a time of intense competition for customer attention, a famous founder can act as an initial boost for brand awareness, but staying power requires more. Brands that instead focus on their distinctive approach to beauty and on fulfilling consumers’ needs will cultivate long-term customer loyalty.
Fragrance will lead growth and the definition of beauty will expand
Of beauty’s four key categories (skincare, haircare, colour cosmetics and fragrance), the fastest-growing will be fragrance, growing 6 percent annually through to 2030 and outperforming the beauty market overall. As the most emotionally driven segment, consumers continue to have a natural affinity for both prestige and niche brands, while younger customers’ spending power will drive growth for high-end and specialist fragrances.
Meanwhile, the beauty market is evolving fast. Aesthetic injectables — worth $10 billion in global sales in 2024 — are growing in popularity, with over 11 percent of consumers receiving them in the past year alone, and a further 28 percent interested in having them done in the future.
The State of Fashion: Beauty highlights five themes reshaping the beauty market.
- The Fragmenting Consumer: Each market has layered nuances – hyper-localisation is needed to meet consumer need
- Nearly two-thirds of consumers in the Middle East try at least one new brand every three months compared to 30 percent in Europe.
- True Value: As consumers grew more selective and cost-conscious, brands need to demonstrate clear and ownable value, regardless of price
- 63 percent of consumers do not think premium beauty products perform better than mass beauty ones.
- Beyond the Founder: Brands with visible founders can help propel growth in the short term, but product quality and brand originality will be key to long-term success.
- Only three founder-led brands established in the last two decades scaled beyond $1 billion in sales.
- Marketing’s Balancing Act: Beauty labels need to experiment with bolder marketing strategies as growth marketing becomes more costly.
- The importance of influencers in inspiring beauty purchases has declined in the US, China and Europe by 8 percentage points between 2023 and 2025.
- Channels at a Crossroads: Online marketplaces continue to gain market share, pressuring speciality and mass retailers. New online shopping platforms will reframe the retail landscape and intensify competitionThe share of global beauty sales made online could reach one-third by 2030.
Priya Rao, executive editor at The Business of Beauty, said: “Volatility across all industries is threatening to catch up with beauty. Paired with market saturation and shifting consumer expectations, brands need to find points of accessibility and consistently push boundaries to win. Customers are not in a position to spend on products with no real innovation or added value, requiring better brand focus and differentiation. Expectations are high, beauty companies must meet them.”
Kristi Weaver, Senior Partner at McKinsey, said: “While we anticipate that beauty will continue to captivate both investors and consumers, the age of excessive consumption has given way to a new emphasis on value, differentiation and individuality. Brands have more avenues than ever to capture consumer attention, but beauty industry players will need to work harder to stand out from the crowd and navigate the current challenges effectively.”
The State of Fashion: Beauty, the latest report from The Business of Fashion and McKinsey & Company, features proprietary data derived from global consumer surveys, a beauty executive survey, and in-depth interviews with leading industry executives from global brands such as Amorepacific, Beiersdorf, Kiko, Puig, The Ordinary and Walmart.
Read The State of Fashion: Beauty report here – https://www.businessoffashion.com/reports/state-of-fashion-beauty-industry-report/
The report is released on the first day of The Business of Beauty Global Forum 2025, which takes place from 9-11 June in Napa Valley, California. The gathering convenes the industry’s most influential CEOs, entrepreneurs and innovators across the beauty industry. Headline speakers include Hailey Bieber of Rhode, Tracee Ellis Ross of hair care brand Pattern Beauty, Tarang Amin, CEO and chairman of E.l.f. Beauty, Mikayla Nogueira of Point of View Beauty, Marc Elrick of skincare maker Byoma and many more.
