During the pandemic, the Health, Beauty, and Personal Care sector faced its challenges, yet still remained one of the most successful sectors to come out from the crisis, with big names in the industry eager to get their hands on up and coming brands. For example, Unilever recently announced their acquisition of ‘digital-led skincare brand’ Paula’s Choice, which was an internet skincare sensation during the pandemic.
 
The Rise of E-commerce
 
According to a recent report from Edge by Ascential, The Health, Beauty, and Personal Care category is expected to see rapid growth and is set to add $305.2 billion in sales between 2021-2026. All the while, e-commerce sales growth of 12.1 % CAGR from 2021-2026 within this industry will proceed to out-pace store-based sales growth, therefore emphasizing the fundamental importance of suppliers developing their e-commerce strategy. 
 
Furthermore, over the next five years, the Health, Beauty, and Personal Care sector is set to see an increased CAGR growth of 5.3% in e-commerce sales, overtaking the Edible Grocery segment and perching itself just behind Household and Petcare goods.
 
Challenges
 
A growing challenge for brands is managing their trade spend across physical and digital formats. While the spending on online advertising continues to climb, in-store trade spending requirements are not decreasing proportionately.
 
Additionally, the multitude of intermediaries (3rd party delivery social commerce) and Google seems to be an integral cog in the complex machine of digital commerce - they all have their spending requirements, forcing brands to stretch their budget across many players.
 
With the online beauty industry continuing to see growth, brands, and manufacturers that prioritize spending on their e-commerce business models may find that they gain the most in the coming years.