Australian skincare market to reach $1.6b in 2026: report

This will be led by the hand and facial care categories.

The Australian skincare market is expected to rise at a compound annual growth rate (CAGR) of 3.5% from 2021 to 2026, and reach $1.6b (A$2.1b) by 2026 as consumer preferences shift to “clean-label” and “green” beauty products, according to GlobalData.

In a statement, GlobalData said the market growth is largely driven by the hand care category which is expected to post the fastest CAGR of 5.1% during the same period, followed by facial care at a CAGR of 3.6%.

In the past few years, Consumer Analyst Likitha Nalluri said the clean and green beauty trend has been gaining momentum as customers purchase from businesses that have a “strong philosophy of ethics, environmental safety, and human health.”

“Consumers are expecting more from their makeup brands than mere superficial cosmetic benefits,” Nalluri said. “Informed consumers are thereby avoiding products with artificial colours, microplastics, and fillers that may provide short term benefits, albeit at great cost to their health and the environment in the long run.”

Meanwhile, the per capita expenditure of skincare in the country increased to $22.5 in 2021 from $16.9 in 2016, exceeding the global average of $9.8 and regional average of $9.2. It is expected to reach $28.3 by 2026.

GlobalData added that ​L’Oréal S.A., Natura &Co, and Procter & Gamble were the top three companies in the Australian Skincare market by value in 2021, whilst Aesop and Olay​ were the top brands.

Nalluri said that formulators should ensure that the substances they use in skincare products are safe for the customers and the planet to cater to the growing consumer trend towards conscious or responsible consumerism.

Having accreditations, certifications, and logos from reputed institutions can help give more credence to their environmental, ethical or safety product claims, the analyst added.