The Cosmetic Ingredients Market is estimated to be valued at US$ 1.99 Bn in 2023 and is expected to exhibit a CAGR of 5.2% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Cosmetic ingredients are substances used in cosmetics such as creams, lotions, shampoos, hair colors, soaps and perfumes. They are classified into two main categories - synthetic and natural ingredients. Natural ingredients include essential oils, botanical extracts, vitamins and minerals, while synthetic ingredients include preservatives, silicones, conditioning polymers and colorants among others. Cosmetic ingredients provide products with desired qualities like moisturization, anti-aging and skin rejuvenation features.
Market key trends:
Growing demand for natural cosmetic ingredients is a major trend witnessed in the market. Consumers are increasingly preferring products containing natural components obtained from plant and botanical sources over synthetic ingredients owing to rising awareness about ill effects of chemicals. Natural ingredients have skin compatible properties and cause minimal side effects. Major players are focusing on developing organic and clean label products with natural extracts of aloe vera, coconut, avocado, olive and jojoba oils. Innovation in multifunctional active ingredients catering to specific skincare concerns is another key trend. Manufacturers are investing in R&D to launch ingredients that provide anti-acne, anti-aging and skin lightening solutions.
Porter’s Analysis
Threat of new entrants: Low threat of new entrants as cosmetic ingredients market requires high initial investments and R&D capital to develop new ingredients. There are also well established players in the market.
Bargaining power of buyers: High bargaining power of buyers as there are many suppliers and consumers can switch to alternatives easily. Branded ingredient suppliers have some power.
Bargaining power of suppliers: Moderate bargaining power of suppliers as there are many suppliers but key ingredients require specialized production facilities limiting number of suppliers.
Threat of new substitutes: Threat of natural and bio-based substitutes is high as consumers prefer natural ingredients. Synthetic substitutes threat is low.
Competitive rivalry: Intense competition among existing players to capture market share.
SWOT Analysis
Strength: Wide range of innovative, safe and effective ingredients. Established supplier relationships and production facilities.
Weakness: High R&D costs and stringent regulatory approvals. Vulnerable to changes in customer preferences.
Opportunity: Growth in skin care, hair care and makeup segment in emerging markets. Rising demand for natural and sustainable ingredients.
Threats: Stricter regulations. Low-cost alternatives from local suppliers especially in Asian markets.
Key Takeaways
The global cosmetic ingredients market is expected to witness high growth, exhibiting CAGR of 5.2% over the forecast period, due to increasing urbanization, rising incomes and growing aging population. The Asia Pacific region dominates the market and is expected to grow at the fastest pace due to increasing expenditure on personal care products.
Regional analysis: The Asia Pacific region dominates the cosmetic ingredients market with over 40% share and is projected to witness fastest growth during the forecast period. China, India and Japan are major contributors to regional market growth. Europe and North America also have significant market shares.
Key players: Key players operating in the cosmetic ingredients market are BASF SE, AkzoNobel N.V., Croda International Plc, The Dow Chemical Company, Eastman Chemical Company, Clariant AG, and Wacker Chemie AG. These players are focusing on developing innovative and sustainable ingredients to cater to changing consumer demands and regulations.
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