Cosmetics ODM Market Size, Share & Trends Analysis Report By Application (Skin Care, Hair Care, Makeup, Body Care), By Product (Organic, Synthetic), By Packaging Format (Bottles, Compact Cases, Droppers, Folding Cartons, Jars, Pallets, Pouches, Pumps and Dispensers, Roll On, Roll On Sticks, Sachets, Sticks, Tubes, Wraps, Others), By End Use (Prestige Brands, Private Labels, Mass Brands, Indie Brands) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global cosmetics ODM market size was valued at USD 10.19 billion in 2022. It is projected to reach USD 30.12 billion by 2031, growing at a CAGR of 12.8% during the forecast period (2023-2031). 

In the last few years, the market has witnessed a significant change in lifestyle across the globe. This change has boosted the demand for various cosmetics products across the globe on account of changing climatic conditions, an increasing youth population focused on beauty, and rising awareness among the population about cosmetic products. These factors have collectively flourished the number of cosmetics ODM globally. With the rising awareness among consumers regarding the nature of ingredients, the market is witnessing a shift in the preference from chemical to natural and organic beauty care products, particularly in the U.S. and European countries. This rising demand for natural, herbal, and organic beauty products offers potential opportunities for manufacturers to innovate and develop new products as per consumer preferences.

Market Dynamics

What are the primary factors driving the cosmetics odm market?

Rising trend of personal grooming

There have been far too many product launches as men and women alike increase their interest in personal grooming. Additionally, a plethora of trends that appear periodically also appear on social media platforms. With so many trends, most of which disappear after a season or two, the cosmetics industry experiences unprecedented growth. The players in the global cosmetics ODM market have ongoing opportunities because of these rapidly changing trends. Consumers today are increasingly choosing environmentally friendly products in addition to products that are safer, better, and newer. They are also getting more and more worried about the moral and social repercussions of making and using these products. As a result, "indie" brands are quickly rising to prominence as they position themselves as significantly better alternatives and environmentally friendly products.

Increasing demand for cosmetics for men

More and more male consumers place a high value on appearance and physical attractiveness. Men's grooming products are no longer considered a sideline to women's cosmetics. At the moment, market participants are focusing on two distinct groups of male consumers: those who favor using toiletries to simply satiate their daily needs and those who favor utilizing personal care products to enhance their physical appearance. Male beauty has received attention thanks to social media. Big and small beauty brands are working to make male cosmetics more appealing to a wider audience for everyday use, despite the fact that provocative and expressive looks like those on magazine covers and elsewhere aren't mainstream. The debunking of stereotypes and normalization of boys wearing makeup has the potential to sustainably grow the market. The Man Company is an Indian company that sells a full line of high-end products for men's grooming that has been enhanced with natural essential oils.

What are the main factors that will slow down the cosmetics odm market?

Slower government approvals

One of the main difficulties faced by market participants is the slower regulatory approval processes. In order to gain an advantage over rivals, players who operate in this field frequently want to act first. However, lengthy and strict regulatory approval processes frequently affect business strategies. In addition, testing and certification procedures cause delays in the launch of products.

What are the future opportunities for the cosmetics odm market?

Increasing demand for natural cosmetics

The demand for organic or natural cosmetics is primarily driven by rising consumer awareness of the advantages of organic consumer goods and strong local companies' support for their development and product visibility. In comparison to conventional products, the development and production of products with green ingredients are more environmentally friendly. Additionally, organic consumer goods also have fewer side effects. Natural cosmetics are products made from natural ingredients with negligible amounts of synthetic ingredients like parabens and petrochemicals. Conventional cosmetics and personal care products use more natural ingredients. Natural ingredients are increasingly being used in place of synthetic ones by businesses, in part due to consumer demand and in part due to a shift towards sustainable raw materials. The market for natural cosmetics in Europe was estimated to be worth €3.9 billion in 2019; this represents a market share of 5% of the overall European cosmetics market. However, the European market for natural cosmetics is expanding more quickly than the global market for cosmetics.

Regional Analysis

The global cosmetics ODM market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

North america dominates the global market

North America region is the highest contributor to the market and is expected to grow at a CAGR of 12.1% during the forecast period. U.S. is leading the North American cosmetics ODM market backed by rising demand for skin care and hair care cosmetics products, including sunscreen lotion, shampoo, oil, and moisturizers, as a result of changing the climate. Canada is witnessing high usage of haircare and skincare cosmetic products owing to extreme climatic conditions affecting skin and hair health. The region is expected to use Cosmetics ODM technologies, including advanced beauty technology and multicolor compression technology, at a higher rate as formula advancement services and technological innovations become more affordable. To meet the rising demand for cosmetics ODM on a global scale, it is anticipated that differentiated manufacturing technology will be adopted during the forecast period. Technology has also had an impact on the cosmetic industry in general, including product packaging and ingredients. Cosmetics ODM players are quickly advancing their innovation through intensive R&D with the goal of gaining a competitive edge in the market.

Europe is expected to witness dynamic growth in the cosmetics ODM market. Increased demand for cosmetic products, including hair care, skin care, oral care, and others, is majorly attributed to adversely affecting climatic conditions, leaning trend towards clubbing, and a modernized lifestyle. Germany and U.K are the major contributors to the Europe cosmetics ODM market on account of the strong presence of major cosmetics manufacturers, including MAC and others, which depend on third-party manufacturers or ODM's for cosmetic production. The trend toward organic and environmentally friendly products has expanded the U.K. beauty market by drawing in a large number of new consumers. More than 40% of beauty shoppers in the U.K. would only purchase natural and organic goods. The U.K.'s organic beauty market, which is now worth over £3 billion, has significantly contributed to the expansion of the country's beauty sector. Germany has a huge market for skincare products, and it has historically relied on imports from other nations to meet this demand. As a result, over the years, the nation has engaged in a number of trade agreements with significant producers of skincare. In Germany, the majority of consumers concentrate on several well-known brands, including L'Oreal and Unilever PLC. Germany imported 4,392 metric tons of skincare products in 2021, according to ITC Trade Map.

Asia-Pacific is expected to witness significant growth in the Cosmetics ODM market during the forecast period. After the United States, China has the second-largest market for cosmetics and personal care products worldwide. The personal care and cosmetics market in China has been growing steadily, especially for skincare and cosmetics products. The main force behind this is the rising beauty consciousness, especially among millennials and the urbanized population. In addition, the strong economic growth, particularly from the generational shift, young consumers' better purchasing power, and further reinforcement by e-commerce had a long-lasting impact on consumers' purchasing habits for cosmetics and personal care items. India will hold more than 32.6% of the South Asian market in 2021. Support from various governments is a significant factor boosting the ODM market for cosmetics. To raise the caliber of the products, the Indian government is encouraging the adoption of automation systems in the ODM market for cosmetics. Companies that perform cosmetic contract manufacturing (ODM) have grown by diversifying their clientele from established brands to up-and-coming ones. Additionally, governments are providing assistance to some of the largest cosmetic companies in order to strengthen their brand recognition and increase their capacity for new product development.

The LAMEA region is offering lucrative opportunities for the market. Growing awareness regarding skincare, haircare, and makeup products in Africa, especially in South Africa, has influenced the overall demand for cosmetics in the region. The retail travel market for cosmetics in the Middle East & Africa is on the verge of expansion due to increased tourism activities. Hot & humid climatic conditions have led to the increased demand and use of skincare and hair care cosmetic products, which has spurred the number of cosmetics ODM in the region. Moreover, rapid urbanization in the Middle East, especially in Dubai and Abu Dhabi has significantly flourished market growth.

Segmental Analysis

The global cosmetics ODM market is segmented by application and product.

Based on application, the global cosmetics ODM market is bifurcated into skincare, makeup, haircare, and others.

The skincare segment is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period due to the increasing demand for skincare cosmetics products and the leaning trend towards skin protection using cosmetics. Increasing environmental effects on the skin as a result of rising saturation of CO2 in the atmosphere and growing awareness regarding the ill effects of U.V. rays on the bare skin have boosted the skincare segment growth.

The haircare segment is expected to witness a higher CAGR. With more cases of hair damage, hair loss, and hair thinning, hair care is changing on a global scale. Researchers have discovered that exposure to common pollutants reduces the levels of four proteins necessary for hair growth and hair retention, which is why air pollution is causing excessive hair loss. In order to lubricate and moisturize the hair, lessen split ends, safeguard the scalp, and lessen skin damage, hair tonics are frequently made with natural oils.

Based on the product, the global cosmetics ODM market is bifurcated into organic and synthetic.

The organic segment is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period. Global consumers are becoming more conscious of the effects of their purchasing habits and preferences on the environment and society. Consumers are now more selective when making purchases, and they also consider the quality of the ingredients and the country of origin. Furthermore, the market is expanding significantly as a result of the rising veganism trend, particularly among young people. With the millennial generation embracing a vegan lifestyle, this is no longer unusual. It is currently fashionable, with many A-list celebrities endorsing the lifestyle and more options becoming available online and in stores.

The synthetic segment is expected to grow at a significant rate. Synthetic cosmetics are much cheaper than organic cosmetics, and consumers in developing and underdeveloped countries majorly use synthetic cosmetics. The application of less harmful synthetics in cosmetics can propel the growth of the synthetic segment in the market.

Recent Developments

• In October 2022, Kolmar announced its marketing deal with Synpet to manufacture circular cracker feed.
• In January 2022, Vellvette Lifestyle Pvt Ltd acquired ENN beauty with a majority stake in the company.