After taking a hit after the pandemic, the beauty sector has seen sales boosted, with spending rising by 8% to £5.7 billion in 2022 (Mintel, 2023). Insights reported from an article  says that the British beauty market is fiercely competitive with a fragmented distribution landscape (T O'Connor, 2022). Yet the pandemic has shifted the market dynamics and opened up opportunities for new players to enter the market.  Cosmetic industries have experienced the most dramatic market growth and are a very lucrative market with the highest prime targets for worldwide expansion to the majority of beauty players. Although the growing market, there is now a rise in demand from consumers for more organic and natural cosmetic products globally. A report from Statista states the value of certified organic health and beauty products currently stands over 138 million pound and has been continuously growing since 2010 (Statista, 2023). This factors into the environmental factor of the cosmetics industry with Excessive packaging, plastic pollution and unstainable resource consumption are huge problems which has massive impacts on the environment. Beauty packaging alone amounts to 120 billion units each year (Earth.org 2023). With these statistics being known to the public this can increase the threat of new entrants to the industry creating a unique selling point of sustainable packaging and cruelty free products.  

There is no doubt that also BREXIT has had a massive effect on the cosmetic industry, having a significant impact on cosmetic industry with imports and exports. Significant costs including duties, shipping/transport, VAT and customs. Haulage costs have increased from £2.5k to £4.5k. Both courier and delivery costs to consumers have doubled, with alternatives costing up to 3 times that pre-Brexit. (British Beauty Council 2021). Furthermore, according to the Office for National Statistics, in Great Britain, retail sales of pharmaceutical, medical, cosmetic, and toilet goods increased by 10.2% in 2022 compared to 2021 (Mordor Intelligence, 2023). This will affect companies profits or force them to increase their prices. This could however be an issue due to the cost of living crisis in the UK at the moment, the economic situation means consumers must have more of a mindful approach when it comes to spending. Consumers worse off financially have had to adopt the most changes. (Mintel, 2023). Companies need to make sure that consumers are persuaded into thinking that their products are a necessary and not a luxury. This causes a threat as supply costs are rising and consumer disposable income is decreasing it could be possible that a temporary decline in sales could occur if companies do not take the right marketing actions. 

Although advertising conducting through brands is a vital way to attract consumers; reviews from social media/advertising plays a massive part in product growth. 42% of 18 to 24 year olds are inspired by social media posts. According to MLSK user-generated photos are trusted 7x more compared to advertising (Forbes, 2022). This can act as a major opportunity to the industry as marketing through influencers or creating content on social media is a lot more cost effective than traditional marketing through television advertisements and billboards. This must depends on the individual brands target market as an older generation is not likely to actively use social media.

Using this Market Analysis on the cosmetics industry, how what would the brand impact be on Lush Cosmetics UK

 

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Based on the market analysis provided several factors could impact Lush Cosmetics UK 1 Demand for Organic and Sustainable Products Opportunity Lush kn... View the full answer