Sales continue to be hot, and the prospects for health and beauty products are bright!

Over the next five years, online sales of health and beauty will grow more than three times faster than in-store sales.

That’s according to a new report from Edge Retail Insight, the research and data insights division of Ascential, which predicts that online channels will account for nearly a third of global health and beauty sales by 2026, up from a fifth in 2021.

The beauty and personal care category includes a range of related product categories such as makeup, skin care, fragrance, oral care, hair care, and body care products, deodorants, and beauty accessories. In addition, it includes over-the-counter and prescription medicines, vitamins, and supplements.

Online sales will grow at a compound annual growth rate of 12.1% between 2021 and 2026, far outpacing the 3.3% compound annual growth rate for physical store sales. In the next five years, consumers will purchase an additional $156.1 billion in health and beauty products online, e-commerce sales in the category will reach $358.4 billion by 2026, and global retail sales (both in-store and online) will reach $1.34 trillion by 2026.

E-commerce platforms Amazon, Alibaba and JD.com are already major players in this field, and their growth rate will be 4 to 5 times that of the retailers that dominate the field today, Walgreens Boots Alliance and CVS Health. For example, Amazon achieved rapid growth in sales of beauty and personal care products in the first half of the year: sales of toothpaste, whiteners and mouthwash increased by 66% in April 2021 compared with January 2020, and sales of skin care products increased by more than 38% year-on-year.

“With items once purchased in-store not only becoming available online, but also increasingly using mobile devices such as phones, brands have been quick to experiment with innovative digital technologies to engage customers,” said Deren Baker, CEO of Edge by Ascential. “This includes using augmented reality (AR) so customers can virtually try on lipsticks, as well as seasonal campaigns and livestream shopping increasingly offered by giants such as Alibaba, Amazon, JD.com and others.”

Edge by Ascential analysts also said that with the increasing focus on health, hygiene and wellness in society, brands should focus on more natural and environmentally friendly product lines, emphasize natural ingredients, and should also ensure that products are differentiated and in line with emerging consumer needs.

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