The End of Beauty’s Easy Growth Era

Walk through any mall or scroll on TikTok, and it’s easy to see how popular beauty is. Stores can have lines out the door; influencers specialising in “Get Ready With Me” tutorials command millions of views and premium brands like Rhode, Summer Fridays and Touchland have become status symbols.

This month’s earnings cycle also showed resiliency. L’Oréal’s and Estée Lauder Companies’ sales grew 6 percent in its last quarter, Estée Lauder Companies’ ticked up 4 percent in its last quarter, and Spanish firm Puig, which makes popular products from Byredo and Charlotte Tilbury, grew 6.2 percent. But the first two companies missed analyst expectations, while the latter’s stock edged up just 2 percent. Despite many bright spots, including Estée Lauder’s return to growth in China and Charlotte Tilbury’s outperformance at Puig, investors remain on the sidelines.

“The market doesn’t yet see beauty as having sustainable growth,” said Audrey Depraeter-Montacel, global beauty lead at consulting firm Accenture. “The signs of growth are still a little bit fragile.”

Beauty conglomerates have always been in fierce competition with one another, but now their competition is not just with their direct peers. It’s also with a distribution landscape that favours fast, discounted sales, and changing customer attitudes towards value that puts a premium on proven products and services. These customers have begun to question the need to spend on pricey creams when aesthetic treatments like lasers and Botox, which are more accessible than ever, challenge their results. And some shoppers have stopped shopping at all when faced with drawers of impulsively purchased products that have yet to deliver.

“When the world is a bit more shaken, when consumers are a bit less enthusiastic, we have to tempt them more,” said Nicolas Hieronimus, L’Oréal’s chief executive on a call with analysts.

The Skincare Conundrum

The skincare category saw unprecedented growth in the years directly following the pandemic as customers switched to high-efficacy, low-cost products from the likes of The Inkey List, The Ordinary and Cerave.

Uptake is still strong, but to some degree, premium brands now compete with the aesthetics industry. According to research by the International Society of Aesthetic Plastic Surgeons, laser and peel procedures have grown 59.2 and 33.3 percent, respectively, since 2023, while skin-tightening treatments have grown 38.9 percent.

“There is a diversification of what’s on offer in beauty, which represents a loss in market share for some of the players,” said Depraeter-Montacel.

Reduction of wrinkles, improvements in skin texture and tightening of the skin are all claims that dermatological skincare brands can make, but that aesthetic procedures can more reliably deliver on. Customers want to see either immediate gratification, or bang for their buck. Puig’s 5.2 percent skincare growth in the last quarter of 2025 was chalked up to Charlotte Tilbury’s range of superficially glow-giving products such as her Magic Cream, as well as its premium dermatologist-approved Uriage range. Dr. Barbara Sturm, the luxury line it acquired in 2024 offering $300 serums, was not mentioned in its latest release, apart from a note classing it as a “subscale” skincare brand that had needed substantial investment.

Beauty companies are now mobilising to increase their exposure to the aesthetics industry. L’Oréal’s Hieronimus told analysts during the earnings call he was “not happy” about its skincare performance as it had ended an eight-year run of outpacing the market. The company increased its stake in Swiss injectables maker Galderma to 20 percent in Dec. 2025 and also took a stake in the med-spa chain SkinSpirit last year. Depraeter-Montacel noted that many brands are upping their clinical claims or adding medical-adjacent language to their products. 68 percent of customers surveyed by Barclays in 2025 said that clinical efficacy was important in their beauty choices, with younger customers in particular driving much of this growth.

There are other misses. Success in skincare and China have long been synonymous for many companies, with Chinese shoppers especially interested in pricey products from global brands. Since the pandemic, that momentum has decelerated. While beauty sales grew 5.1 percent in the country, according to China’s National Bureau of Statistics, the likes of Estée Lauder, L’Oréal and Shiseido all underperformed as customers opted for domestic brands.

Many analysts now surmise that China will indeed recover, but not return as such a powerful and reliable sales bloc for beauty brands. Conglomerates are now turning their attention to emerging markets like Latin America, India and South-East Asia to rebuild global momentum.

The Value Gap

Many consumer goods have sharply risen in prices from snacks to shampoo.

Anna Andreeva, a managing director at investment bank Piper Sandler, said in many consumer categories, customers aren’t lowering the amount they’re spending, but they are purchasing less frequently. While beauty budgets haven’t shrunk, customers aren’t increasing them with price inflation, creating a kind of fiscal drag.

This value question is especially prescient in the world’s biggest beauty market of the US. Economists currently describe shopping habits as “K-shaped” where the wealthiest households are responsible for nearly half of all consumer spending. Major beauty companies are premiumising further to entice richer consumers, but sales of more affordable cosmetics are less buoyant, though Andreeva said she expects a slight rebound in the US when consumers receive tax refunds in 2026, which are forecast to be larger than previous years.

The value proposition of some Western brands has been further challenged by the resurgence of K-Beauty. South Korean-made beauty products have been popular for years, but their recent resurgence in global popularity has left many of their Western counterparts in the dust.

Beyond the hype, modern beauty customers have shown themselves to be preoccupied with value. Many K-beauty brands are cheaper than their Western competitors and still deliver the same clinical pedigree. Amorepacific, which owns Cosrx and Laneige, and APR Corp, which has Aprilskin and Medicube, are seeing huge global growth: Amorepacific grew 6 percent in the last quarter to $861 million, while APR exploded 124.2 percent to $378 million. As of 2025, Korean exports of beauty products to the US outstripped those from France, reversing a decades-long trend. The arrival of Olive Young, the nation’s most lucrative beauty retailer, to the US later this year will only continue K-Beauty’s rise; other global retailers like Space NK, Ulta Beauty and Sephora have added more Korean labels to their rosters.

To win over more reticent shoppers, brands must be crystal clear about their value proposition, and articulate benefits and selling points repeatedly. Having a celebrity endorsement is powerful, but Rhode’s magic is not just its famous founder or its simple products but its intentional brand marketing. Likewise, Touchland, which grew double digits in each quarter of 2025 delivers on both innovation (palm-size, premium-smelling hand sanitiser) and price point.

“[The beauty customer] still wants what she wants. She’s just going to buy less,” said Andreeva.

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