Personal Care Chemicals Market

Market Overview

The global personal care chemicals market size was valued at USD 13.63 billion in 2022. It is estimated to reach USD 19.29 billion by 2031, growing at a CAGR of 3.94% during the forecast period (2023–2031).

Personal care products are intended to cleanse, protect, and alter a consumer's look. Over the last few years, personal care products have become part and parcel of consumer's life. It includes various products such as soaps, liquid soaps, hair gel, hair oil, shampoos, anti-aging face creams, sunscreen products, and others. Chemicals used in personal care products range from basic metallic salts and fatty acids used in ordinary bath soaps to high-end cosmeceuticals that offer beautifying properties of cosmetics with the valuable benefits of pharmaceuticals and chemicals.

Personal care chemicals are used to manufacture personal care products. Personal care chemicals can be organically or synthetically sourced. Personal care chemicals are used in different applications like hair care, skin care, oral care, cosmetics, etc. These chemicals can be used as anti-fungal, anti-aging, skin conditioning, anti-hair fall, hair conditioner, shampoo, and others. Individuals use personal care products to maintain or improve their wellness and hygiene.

Highlights

• Synthetics dominate the source segment
• Emollients dominate the ingredients segment
• Skincare dominates the end-user segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Market Drivers

Growth in Sustainable Packaging

Environmental awareness primarily boosts the growth of green packaging or sustainable packaging and processing operations. The personal care industry has shifted toward sustainable packaging materials. Sustainable packaging is a long-term trend with staying power in the personal care industry. It is part of a growing movement toward sustainable and eco-friendly products. The penetration of sustainable packaging is the highest in Europe and North America, but Asia-Pacific claims are notably lower than in other regions.

Recyclable packaging has become the most desired sustainable packaging care feature, followed by refillable bottles for customers. Brands such as Unilever have emerged with stainless steel and glass containers, double-walled steel containers, and aluminum containers for refillable products such as deodorant sticks and refillable toothpaste tablets. The materials used can consist of paper and cardboard, corn starch, recycled polythene, or Plastarch Material (PSM). These packaging materials are bio-degradable and environmentally friendly. Thus, such factors are expected to drive the market's growth.

Different Perceptions of Premium

The demand for premium products is growing as consumers perceive that quality is directly proportional to the price of the products. Premium personal care product brands usually cater to affluent target consumers, especially millennials. This is because millennials are early adopters and opinion leaders when marketing products. Young consumers aged 15 to 30 years are willing to pay higher prices for the better safety and efficacy that premium personal care products claim. In addition, prominent manufacturers worldwide are adopting strategies to capitalize on the trend of premiumization around the globe. The use of social media influencer marketing is a visible trend in the personal care market as these influencers generate awareness and demand in consumers by becoming opinion leaders, thus resulting in higher sales. The factors above are thus driving the market growth.

Market Restraint

Strict Government Regulations

Stringent government regulations hamper market growth despite the projected trajectory. However, some chemicals may face certain government restrictions to continue their business. Important regulatory implications will eventually necessitate the imposition of a clear definitional standard by either the FDA or the industry. The EU banned animal testing methods on cosmetic products in 2004 and cosmetics ingredients in 2009. Several European countries have also prohibited microplastics in cosmetics and personal care products, including the UK, France, Finland, Norway, Sweden, Denmark, and Luxembourg. In addition, governments worldwide have identified the need to display all ingredients used in the personal care market, as transparency is a vital consumer factor. More lab-tested certifications were introduced to ensure that the personal care products are tested in every production phase.

Market Opportunities

Increasing Demand in Emerging Economies 

Asia-Pacific presents a significant consumer market opportunity with its sizable population, rising earnings, and growing middle-class base. Awareness of healthier lifestyles has increased the per capita expenditure on household products across Asia-Pacific. There is an increase in the need for goods that make promises, such as UV protection, long-lasting moisturizing, organic, whitening, and anti-aging. Companies have adopted product innovation as their key strategy to strengthen their geographical presence and customer base. The Indian personal care industry is driven by high disposable income, rising awareness, and increasing demand for herbal or organic products.

Additionally, the personal care market in Latin America is estimated to grow more because of the changing demographics, continual innovations, and the growing populace. The main reason for the increase in sales is innovation. As the skin and hair of people of Latin America are different from Europeans, mass-produced products have proved ineffective. However, with innovation, brands have developed unique products for Latin American people that suites their requirements and needs. Therefore, the increase in demand for personal care products in emerging economies offers tremendous opportunities for the market's growth.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global personal care chemicals market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific is the most significant global personal care chemicals market shareholder and is anticipated to exhibit a CAGR of 4.13% during the forecast period. Asia-Pacific's personal care chemicals market will grow significantly during the forecast period due to emerging economies in Southeast Asia, such as India, Indonesia, and Malaysia, and increasing disposable income in developed countries, such as Japan and China. The pandemic has influenced the spending habits of Asian consumers and purchase decisions, leading to a slight drop in market growth owing to the lockdown and closing of various retail stores. In addition, the growing concern for health and personal wellness has enhanced the region's demand for natural or organic products. These factors have compelled manufacturers to improve their product offerings to meet changing consumer requirements. Further, amidst the rising prevalence of hair thinning, concerns about dryness, loss of volume, and other hair-related issues among younger Asian consumers have fueled the growth of the hair care industry.

Europe is estimated to exhibit a CAGR of 4.0% over the forecast period. The personal care market in Europe has registered high growth over the last five years due to growing demand among the male and female population for younger-looking skin, strengthening distribution channels and promotional campaigns, and consumers' rising interest in personal care and wellness. Germany is the highest revenue-gathering country in Europe as there is an increasing demand for anti-aging and men's grooming products. In addition, the changing lifestyles and rising demands for skincare products due to varying climatic conditions and increasing need for environment and animal-friendly products will promote the growth of the personal care market during the forecast period. Furthermore, some key players in the market include BASF and Clariant International, Dow Chemicals Co., Evonik Industries, and Solvay. These companies use several strategies to expand market share and gain a competitive advantage, fueling the market expansion.

The personal care chemical market in North America is growing due to the rise in direct-to-consumer channels such as e-commerce platforms and the use of social media to engage directly with consumers. With the rise of new emerging platforms, influence marketing on social media has helped brands to reach out to consumers. Healthy lifestyles drive demand for products made using natural and organic ingredients. Innovative start-ups sell on-trend natural, organic, clean, and cruelty-free products, predominantly to millennial consumers, who are more informed and seek transparency in ingredients, packaging, sustainability, and ethical sourcing. In addition, the US market is already fragmented, with many leading global players because of the highly competitive industry. Demand for anti-aging and multifunctional products is growing significantly due to the region's increasing aging population. Such factors drive market growth in the region.

In the Middle East and Africa, many African countries experience extreme poverty, thus slowing down the market's growth, which is still in its nascent stages. However, these markets are expected to grow exponentially, with even the low-income population in Africa seeking to boost their spending on beauty. High disposable income in Middle Eastern countries is why luxury brands such as Dior, Guerlain, Clarins, Lancôme, Estee Lauder, and Shiseido have increased penetration. These brands are quickly making their way into developing markets, like Nigeria, Kenya, etc., due to rising disposable income and an inclination to spend more on appearance.

Segmental Analysis

The global personal care chemicals market is segmented by source, ingredients, and end-user.

Based on source, the global market is bifurcated into organic and synthetic sources. 

The synthetic segment dominates the global market and is projected to exhibit a CAGR of 3.74% over the forecast period. Synthetic chemicals, such as paraben, toluene, oxybenzone, artificial fragrances, phthalates, and others, are artificially made in labs. Synthetic products are cheaper and used in the mass production of personal care products. Synthetic thickeners are often used in lotions and creams. The most common thickeners are carbomers, a water-swellable acrylic acid polymer that can be used to form clear gels. In addition, synthetic emollients include zinc oxide, butyl stearate, and Di glycol laurate. They have a water-swellable chemical being used for 100s of years and developed in labs over that period. Government regulations on synthetic personal care chemicals are restraining the market's growth.

The global organic personal care chemical market is expected to grow significantly over the coming years. Many of these products contain plant-derived ingredients such as roots, essential oils, herbs, and flowers. A few organic ingredients, such as minerals and beeswax, are also derived from animals. Post extraction, they are combined with several naturally occurring carrier agents, preservatives, humectants, emulsifiers, and surfactants. Unlike synthetically manufactured chemicals, these organic products do not use chemicals during manufacturing.

Based on ingredients, the global market is divided into rheology modifiers, emollients, surfactants, emulsifiers, and conditioning polymers. 

The emollient segment is responsible for the largest market share and is anticipated to exhibit a CAGR of 4.71% over the forecast period. Emollients are used in skincare formulations to help retain skin moisture. They also help maintain water on the outer layer of the skin. They are often used on dry, rough, and flakey skin, making them softer. When the top layer of the skin dries out because of lack of water, emollients are effective against immune deficiency like Psoriasis, Hypothyroidism, Eczema, and diabetes, which affects skin condition and the upper layer of the skin. In addition, with the increase in pollution and harmful UV rays, there is a demand for skincare and hair care products that can provide a protective layer to the skin and hair. Therefore, the need for emollients that benefit from creating a protective layer has grown during the forecast period.

Surfactants are vital in-home care, personal, and beauty care products. They are chemicals that stabilize water and oil mixtures by decreasing surface tension through the interface between water and oil molecules. Surfactants can dissolve very poorly soluble ingredients, thus driving its demand in skincare, personal care, and beauty care product. There is growth in demand for bio-based chemicals in the personal care market, which has amplified the growth of bio-surfactants that have many applications throughout personal care products.

Based on end-user, the global market is segmented into skincare, hair care, oral care, cosmetics, and others. 

The skincare segment owns the highest market share and is estimated to boost at a CAGR of 4.21% during the forecast period. Skincare products are used to enhance and maintain the appearance of human skin. There are a variety of products available in the market, such as cleansers, toners, body lotions, oils and serums, and creams with alpha-hydroxy acids and retinol as some of their key ingredients. Skincare products aid regular replenishment of dying skin cells and counter the signs of aging, such as wrinkles, fine lines, and age spots, while maintaining overall skin health. The skincare industry has witnessed a shift in demand from older consumers to a growing younger consumer base. Escalating demand for face creams, sunscreens, and body lotions is expected to impact the market positively.

Hair maintenance products help to uphold hair health and cleanliness and protect it from damage. However, products vary depending on the type of hair and applications. This includes shampoos for dry hair and oily hair, conditioner for damaged scalp, and hair repair and colored hair and curly hair. Changing fashion trends and awareness of the availability of new, more effective, and safer hair care products have led to a significant increase in the use of hair care products. The growing need for organic and natural products for personal grooming has become one of the primary concerns for individuals. Organic hair care products experience wide usage, one of the factors fueling the segment's growth.

Recent Developments

• March 2023- BASF Personal Care introduced KerasyliumTM, a new hair care component that assists in repairing damaged hair and shielding it from daily aggressions at in-cosmetics Global in Barcelona. Kerasylium is a microcomplex consisting of peptides and nutrients.

• March 2023- Reliance Consumer goods Limited (RCPL), the FMCG arm of Reliance Retail, announced introducing a home and personal care goods range on Wednesday, expanding its FMCG portfolio.