The direct selling industry demonstrated resilience in 2023, navigating challenges such as global inflation and ongoing geopolitical tensions. However, the global cosmetics and personal care sector, a key segment within direct selling, encountered both opportunities and obstacles, which are important for manufacturers and suppliers to understand as they plan for the future.
Current beauty direct selling market in the Americas
As recently reported by Direct Selling News, according to the World Federation of Direct Selling Associations (WFDSA), cosmetics and personal care products accounted for 24.2% of global direct selling sales in 2023, ranking as the second-largest product category after wellness. In the Americas, this category was even more prominent, representing 28.9% of product sales.
This highlights the ongoing demand for these products, even amid broader economic challenges. Despite an overall decline in global direct selling sales of 2.3%, the cosmetics and personal care sector continues to play a vital role in the industry.
Latin American markets in particular saw a slight uptick in cosmetics and personal care sales, which comprised 59% of regional sales, marking a steady recovery from pandemic-related disruptions. This rise is significant when compared to the decline in the US market, where cosmetics and personal care products slipped in popularity.
In the US, wellness products overtook cosmetics as the leading category, reflecting a shift in consumer priorities, Direct Selling News confirmed. This shift should alert manufacturers and suppliers to evolving consumer preferences.
This shift in the US market mirrors broader global trends, as noted by Direct Selling News: “While cosmetics and personal care remained a key segment, the growing emphasis on wellness products in certain markets, especially in North America, is indicative of changing consumer demands.” For manufacturers and suppliers, staying adaptable to these trends will be crucial for maintaining relevance in a competitive marketplace.
The decline in overall direct selling sales in North America, including a 9.5% drop in the US and a 2.9% dip in Canada, signals potential headwinds for the cosmetics and personal care sector. In contrast, Latin America’s performance, with notable growth in markets such as Argentina (114.5% increase) and Brazil (4.6% growth), suggests that manufacturers may find new opportunities by focusing on emerging markets in the region.
The WFDSA report highlighted that Argentina’s significant growth, despite high inflation, “continued to stand out,” reinforcing the importance of understanding local market dynamics, Direct Selling News said.
Future outlook
Despite these challenges, the potential for growth in direct selling remains robust, particularly for cosmetics and personal care companies that can capitalize on evolving consumer trends. According to the WFDSA, “The growth potential for direct selling remains substantial, given the continuing desire of people for entrepreneurial opportunities.”
The report also revealed that nearly 60% of people want to have their own business, and approximately 24% are already in business or expect to be within a year. This entrepreneurial spirit is a key driver for the cosmetics and personal care sector, which has long relied on direct sellers to build personal relationships with consumers and offer tailored beauty solutions.
The gender makeup of the direct selling workforce further highlights opportunities for cosmetics and personal care brands. Globally, the majority of direct sellers are women, with some markets reporting as high as 95% female participation in the salesforce.
For cosmetics brands, which traditionally cater to a predominantly female audience, this trend underscores the importance of continuing to empower female entrepreneurs. In markets like the Americas, where women make up a significant portion of the salesforce, companies that provide resources, training, and flexible business models are likely to see continued success.
“Direct selling is an overwhelmingly women-oriented business,” Direct Selling News emphasized, making it a natural fit for cosmetics and personal care brands that can tap into this demographic.
However, despite high female participation, the WFDSA report pointed out that support for women entrepreneurs remains inadequate in many markets. The report highlighted that in 37 out of 49 economies, entrepreneurial support for women was rated as "unsatisfactory."
This presents an opportunity for cosmetics and personal care manufacturers to offer more robust support systems, mentoring, and leadership opportunities to female direct sellers, which could not only drive sales but also enhance brand loyalty.
Moreover, the WFDSA report emphasized the importance of relationship-based selling in the direct selling industry, a factor that is particularly relevant to cosmetics and personal care brands. As noted by Direct Selling News, “Selling based on relationships can be in-person or through various media, but it is still direct selling. If relationships remain the north star/bedrock value of the channel, direct selling will not only survive, but thrive.”
For cosmetics and personal care manufacturers, this means investing in tools and resources that help their salesforce foster strong, personalized connections with consumers, whether through digital platforms or face-to-face interactions.
While the global direct selling industry faced headwinds in 2023, the cosmetics and personal care sector remains a critical part of the market. For manufacturers and suppliers, understanding regional trends and adapting to shifting consumer preferences will be key to navigating the evolving landscape.
By capitalizing on growth opportunities in emerging markets, supporting female entrepreneurs, and maintaining a focus on relationship-based selling, cosmetics brands can position themselves for long-term success in the post-pandemic world.
