Beauty today does increasingly lie in the eyes of the beholder. The traditional view of beauty has evolved to become more encompassing as consumers become increasingly self-aware, conscious, and sensitive to different body structures, skin tones, and appearances. Growing internet adoption and augmented digitization across value chains, especially after the pandemic, have driven both demand side and supply side changes in the beauty, personal care & hygiene sector. As a result, differentiated and personalised products have emerged in the market, catering to different categories of the digitally empowered, informed consumers across geographies.
Dynamic, real-time product innovations, especially by startups have been at the forefront of disruptions in what is now called the beauty-tech industry. The global beauty personal care landscape is increasingly being characterized by firms investing in R&D and technology as a part of their standalone products or to supplement sales of other product lines. From AR/ VR to the incorporation of AI into skincare and 3-D printing, the beauty industry is revolutionizing at an accelerating pace.
We have seen many key trends emerge across improved beauty service and personalisation worldwide. Last year, Shiseido introduced its virtual ambassador SHI to the world- kickstarting the virtual influencer trend. Brands have also been attempting to develop unique solutions to deploy diagnostic tech across skincare, hair care and makeup. Germany's - Henkel Beauty Care is bringing technology to analyze hair follicles & suggest products. The brand has developed a gadget with infrared and light sensors that assesses hair quality, dampness level, and hair tone. Sephora’s Singapore-based ‘Store of the Future’ uses a dermatologist-grade skin analysis device to offer solutions. La Roche- Posay brand and Chinese tech giant Alibaba Group also launched a mobile application that is claimed to be the world's first artificial intelligence-powered mobile acne testing application. The application creates test reports considering three selfies submitted to it, ultimately providing users with customized skin solutions based on their skin condition. L’Oréal’s subsidiary Lancôme launched a machine which uses revolutionary technology to detect skin tones, delivering a highly personalized, freshly blended foundation designed to replicate any person's unique complexion.
Global brands have also been working on leveraging Metaverse to promote their product offerings. Charlotte Tilbury’s 3D virtual party and Estée Lauder’s digital collaboration with the Metaverse Fashion Week, are examples of how beauty brands are trying to adapt to the new digital playground and build an immersive, multi-sensory experience for the new-age consumer.
The Indian landscape has also been increasingly focusing on the beauty tech segment, driven by hyper-customization and better last-mile access and internet penetration. According to a BCG survey, 56% of urban consumers in India are indicating a higher interest in customised products while 50% of consumers prefer Indian brands over international counterparts. The last three years have accelerated the frequency and the pace of market-led innovations as the digital-first generation continues to seek better O+O (Online+Offline) experiences. Many technology-first startups have emerged to answer to these needs, while the larger players have grown increasingly conscious of constantly innovating and making timely, strategic investments to stay ahead of the curve and meet the growing, evolving customer demand.
Some examples that substantiate this include L’Oréal India’s acquisition of ModiFace back in 2018, whose virtual try-on technology that used an advanced face tracker algorithm enabled L’Oréal to offer virtual try-ons for make-up and hair color. Similarly, Marico has picked a stake in Nykaa, Colgate-Palmolive has invested in Bombay Shaving Company, Emami in The Man Company, and Unilever in Plum, which are all new age startups that have successfully leveraged technology to address specific customer requirements across different use-cases and categories. For instance, Gurugram based start-up, Bare Anatomy provides hyper-personalized haircare products after collecting individual data via a short quiz and uses advanced technologies to prepare unique botanical formulations, delivered directly to the customer’s doorstep in 3-7 days.
Future of the Landscape:
Digitization has clearly helped reduce socio-economic, cultural, as well as information gaps amongst consumers across urban and rural segments. The future generations are poised to prefer adoption of more sustainable methods of manufacturing and product delivery, where technology could play an instrumental role.
To help validate legal & ethical compliance of products in the future, Non-Fungible Tokens (NFTs), which serve as unique digital identifiers, could be used to track supply chains through smart contracts, further increasing brand transparency and deepening customer engagement. NFTs can also serve as effective linkages between the real and the virtual world wherein brand issued NFTs can be redeemed in-store. We can also expect to see the metaverse impact expand beyond individual customer engagement to include community-based engagements as it becomes part of ones’ s daily lives and active choices.
Promoting focused, cluster-based approaches to foster innovation can help catalyze synergies and leverage economies of scale. Recently, the Cosmetics Valley in France entered a strategic partnership with Paris region to promote R&D and capability enhancement in the sector, paving a new ten-year vision for cosmetics as we know it.
The beauty tech segment is poised to grow rapidly in the near future and will be driven by the next generation of technology developed by start-ups and smaller players, while the larger players bring in the capacity, scale and distribution channels to help serve customers across omni-channels. Innovation and investment in technology can be seen scaping the larger industry narrative. The world is heading towards a digitalized future, and the same can be expected to be an integral variable in the beauty-tech industry.
