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All About the Cosmetics Supply Chain



Cosmetics is a massive global industry, valued at more than $530 billion in 2017, and the market is continuing to grow at an annual rate of about 2.1%. Companies across the globe are working for a share of the market, producing widely varied products across numerous brands. While there are thousands of brands in the market worldwide, the leading largest brands control a significant portion. In 2018 the largest beauty manufacturer, L'Oreal, earned revenue of $31.5 billion, nearly 6% of the global market revenue of that year.

The cosmetics industry consists of makeup, skin care, and other personal care products. Skincare makes up the largest market portion, nearly 40% in 2018. Europe, Asia, and North America are all major regions for cosmetic sales, with the USA generating the most revenue by country. In 2016, North American purchases made up nearly a quarter of all sales in the cosmetics market.

The cosmetics supply chain involves a variety of logistical challenges including product safety, demand and trend changes, international sales and export regulations, and e-commerce challenges. Like foods and medications, cosmetics are often subject to strict safety regulations affecting every step of their supply chain from manufacturing to storage and sales. As these regulations vary widely between countries they pose a significant impact on international exporting and importing. E-commerce is a popular sales channel for cosmetics sales, meaning many brands need an effective e-commerce solution to maintain or grow in today's market.

Cosmetics consumers are becoming more and more aware of brand ethics and values, which is strongly impacting consumer buying habits. In order to adapt to this, brands are working to increase supply chain visibility. Consumers demand accurate data on ethical and sustainable manufacturing, environmentally sustainable and healthy ingredients, recyclable packaging, as well as animal testing and product safety. As consumers continue to become better informed on the issues which matter to them, brands will need to adapt to their changing demands.

Since the cosmetics market is so immense and spans so much of the globe, it is impossible to describe a 'typical' supply chain in the market. The diversity of the market reflects the various needs and desires of the billions of consumers across the globe and the thousands of brands who service them. As trends and preferences continue to change so too will the market, leading to more and more unique and innovative solutions. As a makeup lover myself, it will be very exciting to see where the industry is headed.

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