The global beauty industry is entering a new phase of growth, one that will rely less on volume and more on scientific credibility, digital visibility, and strategic value creation. Speaking during the "Global Market Dynamics and Future Impact" presentation at BeautyMatter 2026 State of Play, Irina Barbalova, Global Lead for Beauty and Wellness at Euromonitor International, outlined how beauty and personal care is expected to approach $650 billion in 2026. While growth is forecasted to remain resilient at around 6%, she argued the industry is entering a more complex macroeconomic environment. The category continues to expand, but the drivers behind that growth are changing rapidly.
Rather than being fueled by premiumization alone, the next chapter of beauty will be shaped by three structural forces: longevity, AI-powered consumer journeys, and Asia’s growing influence on global competition.
One of the presentation’s most significant findings was the shift in the balance between mass and prestige beauty. According to the presentation, mass beauty accounts for roughly two-thirds of global market value, benefiting from greater price sensitivity, broader accessibility in emerging markets, and increasingly sophisticated innovation.
"Value today is driven by quality of proposition and less so by volume of demand," said Barbalova. With beauty volumes remaining subdued, brands are increasingly dependent on pricing, product differentiation, and channel execution rather than on simple consumer demand. At the same time, geopolitical uncertainty and renewed inflationary pressures threaten to squeeze margins, particularly within premium beauty, where higher packaging, ingredient, and logistics costs could prove difficult to absorb.
Fragrance remains the industry’s strongest-performing category, forecasted to grow around 9% in 2026, while skincare is returning to more sustainable long-term growth after recent volatility. Meanwhile, “skinification” continues to spread into adjacent categories including haircare, suncare, and color cosmetics.
Beyond shifting consumer spending patterns, the webinar argued that beauty’s competitive landscape is expanding far beyond cosmetics and personal care. Rather than existing as a standalone category, beauty is becoming increasingly integrated into the broader wellness economy, with consumers viewing skincare, supplements, fitness, preventive healthcare, and technology as interconnected investments in long-term well-being.
As the speaker put it, “Wellness shifts from trend to infrastructure across every fast-moving consumer goods business. Boundaries between beauty, nutrition, consumer health, fitness, and technology are dissolving.”
That convergence creates new opportunities for beauty companies through ingredient innovation, biotechnology, digital health, and new service models. However, it also changes who beauty brands are competing against.
"Intersecting wellness spaces means significant opportunities for beauty in respect to cross-pollination of ingredients, new benefit domains, new technologies, and new service models," Barbalova said. “But it also means that beauty now competes for share of wallet against other wellness solutions."
The presentation identified this as one of the defining structural shifts shaping the industry, pointing to the growing influence of GLP-1 adoption, holistic wellness practices, longevity-focused services, and digital health technologies. As consumers increasingly prioritize health optimization over reactive beauty routines, brands are being forced to think beyond traditional product categories and position themselves within a much broader wellness ecosystem.
Perhaps the biggest strategic shift discussed was beauty’s growing convergence with health and wellness. Consumers are increasingly treating skincare and haircare as part of a broader health optimization routine, not just anti-aging or aesthetics. This is encouraging brands to invest in biotechnology, medical partnerships, and clinically validated formulations.
"Beauty routines are increasingly positioned as part of long-term health optimization, not only short-term aesthetics," said Barbalova.
Consumer willingness to pay reflects that transition. Around 30% of surveyed skincare consumers said they would pay at least 20% more for medically endorsed products, signaling a shift from aspirational marketing towards scientific evidence and measurable efficacy. Barbalova described this shift as “the healthy longevity version of the lipstick effect.”
However, premium brands are also facing greater scrutiny. While growth in prestige skincare and haircare is slowing, mass alternatives are accelerating by introducing science-led ingredients and health-focused positioning at more accessible price points.
“This isn’t really consumers rejecting premium,” she explained. “It’s consumers reevaluating value.”
Longevity claims, including cellular health, DNA repair, and skin resilience, are already commanding significant pricing premiums. At the same time, supplement-led beauty continues to expand rapidly as consumers increasingly adopt inside-out wellness routines.
Digital commerce is entering a new phase in which AI increasingly determines which brands consumers discover. Skincare currently leads in online penetration, with 37% of global skincare sales already taking place online. At the same time, fragrance has also crossed an important milestone, with more than half of US fragrance purchases now occurring digitally.
Social commerce continues to accelerate this shift. TikTok Shop has rapidly climbed the rankings among beauty retailers in the US. China’s Douyin has overtaken traditional marketplaces by collapsing product discovery and purchase into a single experience.
Twenty-eight percent of shoppers already use generative AI for product recommendations, particularly within categories that require ingredient comparisons or reassurance before purchase. “When AI starts answering both, it shifts from assistant to decision maker,” she said. “That’s where disruption begins.”
Rather than simply changing how consumers search, the presentation argued that AI is fundamentally changing which brands get discovered in the first place. Brands built around clear ingredient stories and problem-solution messaging, including The Ordinary, Minimalist, and Medicube, are already benefiting from greater AI visibility.
The opportunity is far from evenly distributed. Although beauty accounts for nearly half of AI referral traffic across industries, only about 15% of brands currently appear in AI-generated recommendations, creating what Barbalova described as a clear winner-loser dynamic. Categories with high information density, such as skincare, are already seeing AI become a critical discovery channel, with haircare and makeup expected to follow.
"Strong sales with no AI visibility suggests risk already building upstream before they even show up in revenue," Barbalova said, highlighting how brands that fail to appear in AI-driven recommendations may lose future market share before declining sales reveal the problem.
The presentation concluded that “competition increasingly plays out in the algorithmic layer,” where success depends not only on product quality or retail distribution but also on whether AI systems can understand, rank, and recommend a brand’s proposition. For beauty brands, discoverability is becoming as important as shelf space, requiring marketing strategies built around clear ingredient logic, scientific evidence, and structured product information that AI platforms can easily interpret.
The third theme of the presentation focused on Asia’s growing influence over global beauty innovation. Asia already accounts for approximately 30% of global beauty value and is expected to contribute more than $40 billion in additional growth over the next four years. While mature markets such as China, Japan, and South Korea continue to expand steadily, Southeast Asia is emerging as one of beauty’s fastest-growing regions.
K-beauty remains the dominant export success story. The presentation noted that Korean beauty grew 22% in 2025, significantly outperforming the wider market, while Korean, Japanese, and Southeast Asian beauty brands now represent the overwhelming majority of Asian beauty exports outside their home markets.
Importantly, these brands are no longer relying solely on cross-border e-commerce. With retailers including Olive Young expanding internationally and brands such as Medicube and Anua successfully moving from digital-first growth into major retail distribution, Asian beauty is increasingly challenging established Western premium players on both price and efficacy.
"The premium economics are being recalibrated," said Barbalova. She argued that Asian brands are compressing the traditional price-value gap by delivering clinically positioned products at significantly more accessible prices.
Despite ongoing international instability, the outlook suggests beauty will remain fundamentally resilient. However, future growth is expected to become increasingly selective. Premium categories such as fragrance and color cosmetics are forecast to be more vulnerable to economic downturn. In contrast, essential categories, including bath, shower, and skincare, are expected to prove more resilient.
Ultimately, success will depend on precise execution of expansion. “Longevity is raising expectations for credibility … digital determines visibility … and Asia is resetting the price-value equation,” the speaker concluded. Against a backdrop of margin pressure and slower growth, brands that align pricing, scientific credibility, digital discovery, and regional strategy will be best positioned to capture beauty’s next wave of growth.
