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The global personal care contract manufacturing market size was valued at USD 18.19 billion in 2021. The market is projected to grow from USD 19.60 billion in 2022 to USD 33.62 billion by 2029, exhibiting a CAGR of 8.0% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with personal care contract manufacturing experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 6.0% in 2020 as compared to 2019.
Personal care contract manufacturing involves outsourcing part of production activities such as manufacturing physical products or performing packaging operations. The technique offers personal care & cosmetic companies to eliminate drawbacks such as expensive in-house production and operation of manufacturing facilities. The market is projected to witness a significant rise in product demand in the coming years. The rising awareness of consumers toward personal hygiene and their increased spending capacity will positively influence the market. The growing consumption of natural products will further support the personal care contract manufacturing market growth.
Industry Expansion Hampered Due to Reduced Social Life and Remote Work Options amid COVID-19 Outbreak
The onset of COVID-19 profoundly impacted the growth of the cosmetics and personal care industry. Globally, the major manufacturing countries were under lockdown, creating supply-chain issues for manufacturers. The obligatory wearing of masks resulted in reduced demand for lip care products. The consumption of face care products such as sunscreen creams and moisturizing lotions was also significantly impacted. However, the need for hygiene-focused beauty and personal care items increased during the pandemic, which has moderated the impact of COVID-19 on the market.
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Increased Growth Opportunities Due to Rising Demand for Organic Personal Care Products
The surging demand for organic personal care products creates lucrative growth opportunities for market players. Growing consciousness about hair & skin problems has resulted in a shift of consumers’ preference toward mass organic and unique products. Hence, they are spending large sums on products containing organic ingredients. The desire to appear presentable at all times and issues concerning the physical aesthetics of most young people is anticipated to boost the demand for personal care contract manufacturing products. Moreover, a selected chunk of the population balances their buying decisions with social, political, and economic convictions, which is expected to positively influence the market.
Increasing Awareness Amongst Consumers on Personal Hygiene is Driving the Market Growth
The increasing awareness of consumers regarding personal hygiene and sanitation is anticipated to drive the market expansion. The primary growth factor is the rising demand for feminine hygiene products. Maintaining a high level of personal hygiene helps to improve self-esteem, self-confidence, and social, emotional, & psychological well-being.
Furthermore, government bodies in several developing countries have launched initiatives and schemes which promote the significance of personal hygiene products, particularly among socially and economically backward regions. Awareness via innovative advertising campaigns will further incentivize the usage of hygiene products, thereby resulting in rising demand for personal care contract manufacturing.
High Investment Costs Coupled with Low Margins Tune-up the Risk Factor in the Business is Likely to Hinder Growth
High investment in manufacturing and marketing charges for quality products, easy availability of counterfeits, and intense competition amongst manufacturers for special product categories are a few of the key challenges hindering market growth rate of personal care contract manufacturing. The easy availability of low-quality and cheap substitutes is another reason that can affect the revenue generation of companies. Additionally, the allergies caused by certain chemicals or constituents and product recalls might lower the demand for personal care contract manufacturing products.
Liquids Segment to Hold Largest Share in the Market Owing to its Easy Use
Based on formulation, the market of personal care contract manufacturing is segmented into liquids, creams, lotions, oils, gels, and others. The liquids segment accounted for the largest market share and is estimated to hold the leading position during the forecast timeline. The convenience of using liquid formulations is one of the major factors boosting the segment growth.
The escalating demand for face moisturizers, face creams, exfoliators, and scrubs worldwide will positively influence the growth of the creams segment. The rising consumption of sunscreens, body lotions, and cleansing lotions is driving the development of the lotions segment. Customized or personalized personal care products are gaining traction and the growth momentum is expected to continue.
Oils possess several characteristics, such as moisturizing, antimicrobial, and anti-inflammatory, which are beneficial to consumers, leading to their high demand. Moreover, the increasing production of organic oil products will positively influence the segment growth. Properties of gels, such as improved rheology, quick absorption, and non-greasy, are anticipated to increase consumer demand. The growth of the others segment is associated with the rising disposable income of consumers, changing lifestyle choices, and increased awareness regarding appearance.
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Skincare Segment to Lead the Market Due to Increasing Penetration of Multi-Functional Skincare Products
On the basis of application, the market is segmented into skincare, haircare, make-up & color cosmetics, fragrances & deodorants, and others. Amongst these, the skincare segment held a major part of the overall personal care contract manufacturing market share in 2021. Increasing penetration of multi-functional solutions, such as moisturizers, face creams, body wash, and oils, is proliferating the demand for skincare products. Moreover, the growing number of dermal conditions is estimated to boost the skincare segment growth.
The haircare segment is projected to exhibit significant growth in the upcoming years. Excessive pollution levels and temperature changes have resulted in the high usage of haircare products. The growing trend of personal grooming and high-end lifestyle has substantially fueled the consumption of make-up & color cosmetic products, supported by the increase in purchasing power and range of product availability.
Factors, such as increasing hygiene awareness, growing popularity of premium perfumes, and increasing spending capacity, are responsible for the growth of the fragrances & deodorants segment. Rising awareness regarding health and maintenance of oral hygiene will positively impact the others segment growth during the forecast period.
Asia Pacific Personal Care Contract Manufacturing Market Size, 2021 (USD Billion)
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The personal care contract manufacturing market size in Asia Pacific stood at USD 6.91 billion in 2021. The region holds the largest share in the market. This dominance is primarily owed to an increase in disposable income and the rising young demographic population, which increased the demand for personal care & cosmetic products. A rise in the number of domestic cosmetics manufacturers in the region will further fuel the market growth.
In Europe, surging consumer preference toward cosmetics and personal care products produced from raw materials free from harmful chemicals is boosting the market growth. Additionally, the growing use of online cosmetics shopping through various portals available further supports regional expansion.
In North America, the mounting popularity of DIY color cosmetic products due to the lockdown is augmenting the growth of personal care contract manufacturing. Furthermore, the impact of celebrities and social media influencers on consumers who direct the trends for personal care and cosmetics products is propelling the business landscape.
The growing economy in Latin America supports the improvement of consumer lifestyle, thereby driving personal care product consumption. Moreover, increasing internet penetration and rising dependence on social media will fuel the industry expansion in the Middle East & Africa.
Key Players are Adopting Various Growth Strategies to Maintain Dominance in the Market
Product innovation is crucial for a company to secure a competitive edge. Key players involved in personal care contract manufacturing are focused on developing innovative, organic, and multi-purpose products to increase their presence in the market. Partnership with cosmetics and personal care companies is one of the main strategies used by the major players to maintain their lead in the competition. Additionally, the key players are involved in providing recyclable packaging solutions.
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The research report provides a detailed analysis of the market. It focuses on crucial aspects such as leading companies, formulations, product types, applications, and distribution channels. Further, the report offers insights into market dynamics, trends, and highlights vital industry developments. Its other aspects include various factors that have contributed to the market growth in recent years.
Value (USD Billion)
By Formulation, Application, and Geography
Fortune Business Insights says that the global market size was USD 18.19 billion in 2021 and is projected to reach USD 33.62 billion by 2029.
In 2021, the market value stood at USD 6.91 billion.
The market is expected to grow at a CAGR of 8.0% during the forecast period (2022-2029).
The liquids segment is expected to be the leading segment under formulation in this market during the forecast period.
Increasing consumer awareness on personal hygiene is the key factor driving the market growth.
Albea Group, McBride Malaysia Sdn. Bhd., and FormulaCorp are some of the leading players in the global market.
Asia Pacific dominated the global market share in 2021.
Growing awareness on personal hygiene and increasing penetration of organic products will propel the product adoption.
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