Cosmeceutical is a combination of cosmetics and pharmaceuticals and an emerging category of skincare products. Cosmeceutical comprises essential cosmetic products with associated medical benefits. They are considered "cosmetic plus" products consisting of active ingredients such as moisturizers, UV filters, antioxidants, botanical activity, retinoid, proteins, exfoliates, proteins and peptides, anti-inflammatory agents, slimming agents and active agents of melanin. A cosmeceutical product varies by changing the amount of active ingredients at higher levels, or a variety of these active ingredients often used in combination. This stronger formulation has the ability to bring visible changes to the skin, making it a result-focused product. Cosmeceutical products are often limited to professional skin care retail outlets where consultation is possible.

Market Dynamics

"Nanotechnology" is racing to bolster its growth in Cosmeceuticals market

Cosmeceuticals is the fastest-growing segment of the personal care industry, and the number of topical cosmeceutical treatments for conditions involving photo-aging, hyper-pigmentation, wrinkles and hair damage has received considerable attention in the global market for cosmetics. Cosmeceuticals, based on nanotechnology, is currently gaining enormous importance in the global market as nanotechnology-based cosmeceuticals promotes the diversity of products and increases the bioavailability of active ingredients and increases the aesthetic appeal of long-acting cosmeceutical products. Incorporation of nanotechnology in cosmeceutical aims at making perfumes lost longer, sunscreens to protect the skin from skin damage, anti-aging creams to fight back skin aging, and moisturizers to maintain the hydration of the skin. The primary advantage associated with nanoparticles in cosmeceutical involves improvement in stability of cosmetic ingredients (eg. vitamins, unsaturated fatty acids, and antioxidants); and offer efficient protection of the skin from harmful ultraviolet (UV) rays, provide aesthetically pleasing products, and targeting of active ingredient to the desired site and controlled release of active ingredients for prolonged effect.

Growing ageing population is anticipated to stimulate tremendous growth in the Cosmeceuticals market during the forecast period
As the growing ageing population demands less invasive, non-surgical alternatives to slow down the effects of ageing on the skin, the cosmeceutical industry is gaining tremendous attention and growing rapidly. According to statistics published by DocMode Health Technologies Pvt. Ltd., the anti-aging cosmetics market in India is over INR 60 crores and the fastest growing segment at 93% y-o-y. However, the market is only 2% of the country's INR 3,000 crore skincare market. Cosmeceuticals are mainly used to treat the signs of skin ageing that involve lack of skin surface regularity, formation of rhagades and increasing prevalence of dyspigmentation. Cosmeceutical products consist of all ingredients that stimulate the production of collagen, improve the texture of skin and reduce the appearance of fine wrinkles. Other ingredients that can be found in anti-aging cosmeceutical include rosmarinic acid, vitamin C, and tea extracts. These ingredients are highly recommended for slowing down ageing and also possess pharmacological actions that may slow down ageing. Cosmeceutical is therefore the best way to prevent ageing. Furthermore, the combination of cosmeceutical ingredients in a moisturizing agent can increase the benefits and greatly improve the appearance of the skin.

Market Segmentation

Cosmeceutical market is segmented based on product, material type, active ingredients, and distribution channel. Based on the product, the market is segmented as skincare, haircare, and oral care. Based on material type, the market is classified into natural and multifunctional/synthetic. By active ingredients, the market is further segmented as alpha hydroxy acids, antioxidants, botanicals, exfoliates, moisturizers, peptides, retinoids, sunscreens, depigmenting agents, and others. Based on the distribution channel, the market is bifurcated into supermarkets & specialty stores, and online platforms.

By means of products, skincare products will dominate the cosmeceuticals market globally by recording significant market share throughout the forecast period. This is attributed to exposure to harmful radiation that causes premature skin ageing resulting in skin cancer. This is one of the major factors responsible for the high demand or utilization of skincare products. In addition, there is an increase in awareness of the various benefits associated with the use of personal care products, including demand for natural and organic skincare products, making it a major sector of the cosmetics industry. Moreover, the demand for multifunctional products is expected to fuel the growth of the skincare product segment, contributing to the growth of the cosmeceutical industry in the coming years.  

Based on the distribution channel, the segment of supermarkets & specialty stores will hold the largest market share in the forecast period. This is strongly supported by aggressive promotional campaigning and a number of marketing strategies of distributors and manufacturers in specialty stores, including a variety of bulk purchase offers. A surge in disposable income in developing countries such as Asia-Pacific results in a high consumer preference for bulk purchases in supermarkets & specialty stores.

Regional Landscape

Based on the regional market for cosmeceuticals, North America has a dominant share currently and is expected to continue the same trend until the forecast period. Among the countries of North America, the United States has three major trading blocks for the cosmeceutical market. Developed healthcare infrastructure and rising per capita expenditure in the country are considered to be the preliminary factors driving the growth of the cosmeceutical market. In addition, the cosmetics industry ranks high among the patent holders of nanotechnology in the US. Prominent manufacturers in the US have a strong focus on research and development (R&D) and new product launches. For example, L'Oreal, which spends 3.4% of its revenue on research and innovation, is considered a pioneer and also recognized as the industry leader in nano patents, followed by Procter & Gamble and Henkel. Moreover, the high demand for anti-wrinkle products in North American is boosting the growth of the cosmeceutical market globally.

On the other hand, Asia Pacific is expected to witness the fastest CAGR for the cosmeceuticals market worldwide. Due to the massive expansion of product offerings in developing economies, the region is gaining high traction. The popularity of e-commerce or e-tailing in the Asia Pacific has helped the population to deliver better quality brands in the region. In addition, Europe is expected to have the second largest market share for the cosmeceutical market. As the region comprises a large pool of patients suffering from dry skin disorders due to weather conditions, there is an increasing demand for beneficial and multifunctional skincare cosmetic products. This ultimately contributes to the global growth of the cosmeceutical market.

Competitive Landscape

The prominent players of cosmeceutical market involve Johnson & Johnson Services, Inc., THE AVON COMPANY, Croda International Plc,  Procter & Gamble, The Estée Lauder Companies Inc., Shiseido Company, Limited, L'Oréal S.A., Beiersdorf AG, Allergan, Unilever, and among others

Market Segmentation

Market By Product

Skin Care
Hair Care 
Oral Care

Market By Material Type

Natural
Multifunctional/Synthetic

Market By Active Ingredient

Alpha Hydroxy Acids
Antioxidants
Botanicals
Exfoliates
Moisturizers 
Peptides
Retinoid
Sunscreens
Depigmenting Agents 
Others

Market By Distribution Channel

Supermarkets & Specialty Stores 
Online Platforms

Market By Geography

North America
•    U.S.
•    Canada

Europe
•    U.K.
•    Germany
•    France
•    Spain
•    Rest of Europe

Asia-Pacific
•    China
•    Japan
•    India
•    Australia
•    South Korea
•    Rest of Asia-Pacific

Latin America
•    Brazil 
•    Mexico
•    Rest of Latin America

Middle East & Africa
•    GCC
•    South Africa
•    Rest of Middle East & Africa