Canada Cosmetic Products Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
The Canada cosmetic product market is projected to register a CAGR of 6.45% during the forecast period (2021-2026).
The market was negatively impacted by COVID-19 in 2020 and is expected to decline by around 3-4%. Owing to the lockdown, which was in effect in the country by the end of the first quarter of 2020 opportunities to apply cosmetic products had declined with socializing restricted. Additionally, the closure of non-essential stores such as specialist retailers has led to diminishing demand for cosmetic products in the country.
Over the long term, owing to COVID-19 consumers have become more sensitive to health, thus the popularity of cosmetics made with natural ingredients is expected to accelerate. This coupled with the steady rise in the purchase of premium functional products in the country over the years is expected to aid the recovery of the market over the forecast period.
The country witnessed a significant increase in household expenditure, the inclination of people toward spending on appearance, and an increasing settlement of expat population in the country. For instance, according to StatCan, the average annual household expenditure on make-up, skin care, and manicure products in Canada amounted to CAD 264, in 2017.
Moreover, the increasing demand for natural or organic, no animal tested, and cruelty free cosmetic products and innovative and eco-friendly packaging designs is expected to enhance the market further in the country. Organic cosmetic products in the country are increasingly positioned as high quality and premium products, and they draw a wide range of consumers in the country.
Key Market Trends
Innovations in Packing and Design have Contributed to the Growth of Cosmetic Products in Canada
Consumer demand for enhanced functionality and eco-friendliness in cosmetic design is resulting in exciting innovations in the packaging and design of cosmetics products. Manufacturers are offering a wide variety of innovative choices and creative technologies to serve the market. Various big companies are showing innovative changes in packaging and design. For instance, Procter & Gamble recently announced a major shift to the plant-derived packaging for some of its leading global cosmetic brands and is using sugarcane-derived plastic from Brazil’s Braskem. In addition, L’Oréal recently helped to reduce the environmental impact of its packaging by introducing two new assessment tools, namely, Sustainable Packaging Scorecard (SPS) and Packaging Impact Quick Evaluation Tool (PIQET), to its package design process.
Premium Cosmetics are Projected to Grow at a Significant Rate
According to Statistics Canada, an agency of the Government of Canada the per capita disposable income of Canadians has increased over the past five years, which has led to increased consumer spending. This has led to an increased demand for premium cosmetics from the rising consumer base.
This trend can also be attributed to rising consumer concern over the health effects of the beauty routines they follow, which has thus led to increased interest in cosmetics with natural and non-invasive ingredients.
L’Oréal Canada, with its successful premium brands Lancôme and IT Cosmetics, leads the premium cosmetics segment in the country. The company has invested in digital strategies to enhance its market share. For Instance, in 2018, it acquired Canadian beauty technology company ModiFace, a Canadian company that helps consumers to virtually test beauty products on themselves.
The major emerging market players targeting leading brands are making strategic acquisitions of the market leaders in more mature and sophisticated markets. Acquiring these brands enables diversification and gives these players access to stable cash flows and further growth opportunities. The cosmetic products market witnesses high competition, with the dominance of major global players. Various players are entering the market, to tap the untapped potential of the cosmetic products market. Some of the major players in the Canada cosmetics products market are L'Oréal S.A., The Estée Lauder Companies, Coty Inc., Groupe Marcelle Inc., Revlon, Inc., Shiseido Co.,Ltd., Clarins Group, Mary Kay Inc., Avon Products, Inc., and Christian Dior SE.
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