The cosmetics market is growing worldwide – Finland has export potential in natural cosmetics

According to the Finnish Commerce Federation’s survey, the global cosmetics market is forecast to grow at an annual rate of 3.7 per cent in 2024–2030, while the average annual growth in Finland is 2.6 per cent. In Finland, the development is based on the amount of money spent by individual consumers, which will not grow rapidly due to the slow economic and purchasing power development in the coming years. Global growth is driven by increased user volumes, particularly in Northeast Asia, Africa and South America.

“The supply of cheap cosmetics and more affordable cosmetics brands has contributed to meeting the needs of the growing number of users and has also accelerated the recent growth of the global cosmetics market,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

Demand for natural cosmetics is soaring

Price competition in affordable cosmetics brands has enabled many trends, such as Japanese and Korean skincare routines, to spread to new audiences. However, this is not just a development made possible by cheap cosmetics, as the demand for natural cosmetics or organic cosmetics, for example, is growing rapidly.

In Finland, the annual growth of the demand for natural cosmetics is also expected to be faster than the entire cosmetics market – 3.8 per cent from 2024 to 2030. The annual growth of the global natural cosmetics market is expected to be as high as nearly 7 per cent over the same period.

“There are also opportunities for growth for small and specialised Finnish cosmetics manufacturers in the export and international e-commerce of natural cosmetics,” Kurjenoja says.

For example, in China, organic products are the fourth most important selection criterion for both men and women when buying cosmetics, whereas in Finland, they do not fit into the top 10 selection criteria. In China, on the other hand, the cheap price of cosmetics is not among the top 10 criteria, whereas in Finland it is the third most important factor for women and the most important factor for men when buying cosmetics.

During the pandemic, online purchases of cosmetics declined globally, but have increased again over the past couple of years, and this development is expected to continue. In some countries, such as Germany or China, the digital purchasing of cosmetics is already estimated to be the most common way of buying, although this is not yet the case in Finland. According to Statista’s estimate, nearly 28 per cent of cosmetics in Finland were purchased online last year, and, according to the estimation of the Finnish Commerce Federation, 24 per cent of cosmetics and health products were purchased digitally.

“Finnish cosmetics brands would need help with digitalisation, internationalisation and marketing in order to gain a foothold in a huge market such as China, where there is a demand for natural cosmetics,” Kurjenoja points out.

Men’s use of cosmetics is becoming more diverse

The global men’s cosmetics market is forecast to grow even more than natural cosmetics, almost 10 per cent. The men’s cosmetics market is driven by Asia, where skin or hair care is part of the everyday routine of younger, working men in countries such as South Korea, Japan and China. The marketing of cosmetics in these countries is also more gender-neutral than in Western countries.

“Influencer marketing and various user tutorials on social media play a major role in increasing the use of men’s cosmetics. Generation Z and millennials** are also pioneers in the use of men’s cosmetics in Western countries,” says Kurjenoja.

In Finland, the market for men’s cosmetics is still very small, which is mainly due to the relatively small size of the younger age groups. However, there are also signs of growth here too. While women’s regular use of cosmetics across product categories is still slightly behind pre-pandemic levels, men’s use of cosmetics has become more common in terms of skin care products and fragrances in particular. In 2019, 54 per cent of Finnish women under the age of 65 used perfumes regularly, compared to 39 per cent of men. Last year, the corresponding share of women was 51 per cent and of men 44 per cent.

“Perfume use by men has become more common around the world. It is likely to be one of the spearheads of men’s cosmetics use in Finland in the coming years, too,” Kurjenoja predicts.

The cosmetics market in Finland focuses on personal cleanliness

The value of the consumer market for cosmetics in Finland is nearly EUR 1.4 billion, of which approximately 47 per cent consists of personal hygiene products. However, the biggest growth is expected in make-up and, in particular, natural cosmetics make-up and skin care products.

Even though the regular use of personal and dental care products decreased during the pandemic, Finns are very meticulous when it comes to taking care of cleanliness in international comparisons. Of Finnish women, 94 per cent regularly use personal and dental care products, and 79 per cent of men. In Sweden, for example, the use is lower.

*The cosmetics consumer market consists of personal care, skincare, decorative cosmetics and make-up, fragrance and beauty tech products.

**Generation Z was born between 1997 and 2012, and millennials, or Generation Y, between 1981 and 1996.

For further information, please contact: Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja(at)kauppa.fi

The Cosmetics Consumers and Consumer Markets report is an extensive analysis prepared by Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation. She has used various sources in her background material, including Statista’s Global Consumer Survey database.