Private Label Cosmetics Market By Product Type (Skincare Products, Haircare Products, Makeup such as Lipsticks, Foundations, Eye Shadows, Fragrances, Personal Care Products); By End-User (Women, Men, Unisex); By Distribution Channel (Online Retail, Offline Retail including Pharmacies, Supermarkets, Specialty Stores); By Price Range (Mass Market, Premium); By Geography (Segment revenue estimation, Forecast, 2024–2032).

The private label cosmetics market was USD 12.8 billion in 2023 and is expected to reach USD 23.7 billion from 2024 to 2030, with a CAGR of 9.1%. The market is spurred by the rising consumer preference for cheaper cosmetics other than branded products, increased attention to personalization, and product innovation.

 

Private-label cosmetics are made by one firm and branded by another firm. These products enable retail companies and business people to sell various cosmetic products without having facilities for their production. Private-label cosmetics refer to beauty products that include skincare, makeup, hair care, and personal care, targeting price-sensitive customers and firms that want to offer their clients quality items at affordable rates.

 

Market Drivers

Cost Efficiency and High-Profit Margins for Retailers: Cosmetics that are privately labeled create opportunities for the retailers to increase total profit margins since there are no intermediary costs incurred in the branding process. This cost-effectiveness is appealing to small enterprises as well as large purchasing organizations. Example: In 2023, one European chain of drugstores stated that it sells private label cosmetics for 35% of total cosmetics sales, and their margins are higher than those of national brands.

 

Rising Demand for Customization and Niche Products: The increased focus on personalization has led to the development of cosmetics for particular targeted segments, skin types, and needs. Example: An American venture established private-label skincare that focused on sensitive skin clients and got a 20% market share in the niche in 2023.

 

Increase in online sales and DTC operations: e-commerce platforms allow small brands to penetrate the cosmetic market by using private label products without physical stores. Online business sales of private label cosmetics increased to 45% by 2023 due to changes in consumers’ preferences brought by convenience and wider market access.

 

Shift Toward Clean and Natural Beauty Products: Consumers today are looking for natural and organic cosmetics, and this need is filling the market with Private label products. Example: In 2023, a Canadian retailer introduced its house brand of organic cosmetics and saw a 25 percent improvement in sales within the first year.

 

Market Opportunities

Growth in Emerging Markets: Increased disposable income and urbanization in Asia-Pacific and Latin American countries will be the key factors for the growth of private label cosmetics. For example, in 2023, private label cosmetics sales increased by 40% in India due to the rising popularity of modesty products among Millennials.

 

Collaborations with Influencers and Beauty Experts: Blogging and collaborating with influencers help increase awareness of private label cosmetics and gain trust among customers. Example: A U.S. brand partnered with a beauty influencer in 2022, and as an outcome, the sales of its private label lipstick on its e-commerce store increased by 50%.

 

Sustainability and Eco-Friendly Packaging: Using sustainable packaging can positively impact the overall brand image and appeal to consumers who are conscious about their environmental impact. Example: A French brand of personal care products switched to biodegradable packaging for a skincare line of private label products in 2023, which was much appreciated and caused a 20% sales increase.

 

Market Restraints

Perceived Quality Gap Between Private Labels and Branded Products: Private label cosmetics are known to be lower quality than well-established brands, thus influencing the acceptance rate.

 

Regulatory Challenges and Compliance Costs: High regulations and varying standards impacting cosmetic facial products in regional markets challenge growth.

 

Intense Competition and Saturation: The standardization of food commodities escalated the private label food products, hence higher competition, making it difficult for newcomers to stand out.

 

Market Segmentation

By Product Type:

• Skincare Products

• Haircare Products

• Makeup (Lipsticks, Foundations, Eye Shadows)

• Fragrances

• Personal Care Products

 

By End-User:

• Women

• Men

• Unisex

 

By Distribution Channel:

• Online Retail

• Offline Retail (Pharmacies, Supermarkets, Specialty Stores)

 

By Price Range:

• Mass Market

• Premium

 

By Region:

• North America

• Europe

• Asia-Pacific

• Latin America

• Middle East & Africa

 

Segment Analysis

Leading Product Type: Skincare Products

The skincare market was 40% of the total market revenue in 2023, thanks to the increasing concern regarding aging skin, dry skin, and natural or chemical-free cosmetics. Example: In 2023, a Japanese retailer of consumer goods established a private label for skincare products containing natural ingredients, which boosted its customers by 30%.

 

Leading End-User: Women

The women's apparel segment had the largest market share, 70% in 2023, due to the high consumption of beauty products. Example: A German pharmacy chain in 2022bn reported that the women’s private label cosmetics niche accounted for half of its total beauty product sales.

 

Leading Distribution Channel: Online Retail

Customers made up 55% of the industry’s revenue in 2023 due to convenience, available products, and beauty products appealing to social media. Example: For young consumers, a Chinese e-commerce platform appears to have recorded a 35% increase in the sales of its private label cosmetics in 2023.

 

Regional Analysis

The North American market has the biggest share, 45% of overall revenue in the year 2023, due to high consumer awareness and equally strong retailers and e-commerce market. The market share of North America was dominated by the U.S., which captures 75% of the whole market due to its stronghold in the private-label cosmetics industry. Example: In 2023, Target Corporation grew the target private label beauty product line sales increased by 25% in its various stores.

 

Europe generates 30% of annual revenues and enjoys high consumer interest in natural and environmentally friendly products, as well as actively developed PMR. Example: A U.K.-based retailer launched the vegan private label beauty range in 2022 and reported a 20% sales growth.

 

Asia-Pacific interests more, as it is the most rapidly growing region, caused by higher disposable income, urbanization, and e-commerce interest. Example: The South Korean private label skincare brand recorded a better year in 2023 when its exports to the Southeast Asia region increased by 40 percent.

 

Key Players

• Sephora (LVMH)

• Target Corporation (Up & Up)

• Kroger Co.

• Ulta Beauty

• Amazon (Amazon Basics)

• Aldi Stores

• Boots UK Limited

• Marks & Spencer

• DM-Drogerie Markt

• Costco Wholesale Corporation

 

Future Outlook

The problem-solution fit in the private label cosmetics market is expected to expand rapidly since more customers look for better quality, affordable, personalized products. The Asia-Pacific region and Latin America will be the primary drivers for growth, with increased disposable income levels, urbanization of the population within those regions, and private label brand awareness.

 

It is believed that manufacturers and retailers that invest in clean beauty, sustainability, and technology will have competitive advantages. It is predicted that by the year 2030, private label cosmetics will dominate the global beauty market as consumers are taken to the doorstep to get the best package and ready to pay fairly for the best quality.