Which Opportunities Should Beauty Be Focusing On?

Beauty has no shortage of ideas. But which ones truly move the needle? Here, we assess the next big thing — or not — in terms of how significant a financial opportunity they present for the industry

Green Light

1. TikTok Shop Live 

As if TikTok Shop’s mainstream rollout this past year hasn’t already been of great enough consequence — the platform ranks as the second-largest beauty retailer in the U.K., and ninth-largest in the U.S., per NIQ — the company’s live shopping integration has more recently been seeing a particularly rapid Stateside ascent. 

And it’s no coincidence. Live shopping has long been a sales treasure trove for TikTok’s sister app, Douyin, which operates in China — where livestreaming e-commerce grew 40 percent in 2023 to 4.9 trillion yuan (or about $689 billion), according to Statista. While the U.S.’ overall livestreaming sales netted out at a comparatively nascent $50 billion, the channel is expected to grow 36 percent by 2026, estimated Statista. 

Livestreaming e-commerce accounts for more than 80 percent of Douyin’s Shop business, according to a source with knowledge of the matter, who said TikTok is now intent on “replicating that success” in the U.S., where creator affiliate videos dominate and thus livestreams only generate between 15 percent to 35 percent of TikTok Shop sales. 

A growing number of beauty brands are similarly bullish on live shopping.  Austin-based makeup brush company BK Beauty — which has grown its TikTok Shop presence into an eight-figure business in less than one year — is betting on hours-long, chatty and demonstrative streams hosted by the brand’s own team members, as are brands like hairstylist Sarah Potempa’s The Beachwaver Co. and gut-health snack and supplement company BelliWelli. 

One of BK Beauty’s recent 10-hour livestreams generated $200,000 in sales thanks to what chief executive officer Paul Jauregui described as a “QVC-meets-TikTok-Shop approach,” adding that, “producing lives at that level is a new focus for our team.” Watch this space. 

2. Clean Fragrance

For fragrance, clean is the name of the game in more ways than one. The concept has shown up in a lot of ways when it comes to fragrance — clean girl aesthetic, sustainably sourced fragrances and nontoxic in particular — they all are posing significant growth. According to Trendalytics data, social buzz for clean fragrance is up 246 percent versus this time last year. Concurrently, in August searches for nontoxic fragrance were up 1,133 percent and social buzz was up 750 percent versus 2023. Meanwhile, views on the hashtag #NaturalPerfume on TikTok are up 21.5 percent since last year, according to Spate data. Concurrently, Spate data shows that scents often associated with the overall clean girl aesthetic, like vanilla, are also on the rise. 

Particularly with nontoxic fragrances, these searches have translated to brand success with Salt & Stone gaining an undisclosed minority investment from Humble Growth and several other brands, including Michelle Pfieffer’s Henry Rose and Lake & Skye, finding a home at Sephora under its Clean @ Sephora section. Trendalytics also identifies Ellis Brooklyn and Clean Reserve as top performers — the former, in particular, has experienced a 217 percent increase on engagement per post. 

3. Dermocosmetics

However overused the term “synergy” may be in business, that which is emerging between the injectables/aesthetics treatment category and the topical skin care space is one beauty can’t afford to ignore. The convergence, coined “dermocosmetics,” aligns with skin care’s growing quest for longevity, wherein brands and consumers alike are investing in more advanced antiaging treatments through epigenetics, biotech and other increasingly sophisticated means. 

The global aesthetic injectable market size was valued by Grand View Research at $11 billion in 2023, predicted to reach $12.2 billion in 2024. Technologies like exosomes, which are intercellular carriers best known for their applications in the treatments of cancer, obesity and diabetes, are becoming increasingly prevalent in beauty, too, as a means to boost skin health via intravenous injection or topical application. 

Meanwhile, dermatological offerings are leading growth at beauty giants like L’Oréal, whose Dermatological Beauty division includes brands CeraVe, La Roche-Posay and SkinCeuticals. In August, the French beauty conglomerate acquired a 10 percent stake in Swiss pharmaceutical company Galderma, which is parent company to Cetaphil and Alastin and also one of the largest injectable aesthetics players in the world, producing Dysport, Restylane, Sculptra and other dermal fillers. 

Said L’Oréal chief executive officer Nicolas Hieronimus of the decision, “Consumers are increasingly tapping into adjacencies to our current portfolio, in particular injectable aesthetics…this partnership will also help us to further explore the synergies between injectables and topical treatments.” 

4. Weight Loss Drugs

Every expert in the space has made it clear: Ozempic isn’t going anywhere. In fact, weight loss drugs are only continuing to grow and in turn impacting other categories, including supplements, beauty and retail. Morgan Stanley predicts that consumer adoption will continue to increase as the drugs become more accessible, estimating 9 percent of Americans could be on one by 2035. That is on top of an already large market: Sales from the top three drugs exceed $4 billion quarterly, according to McKinsey & Co. 

In addition to sales and adoption, newness, both in terms of product development and research, continues to evolve. New, more palatable products, like ingestible weight loss drugs, are expected to hit the market. In addition, new research is constantly being released showcasing the possible additional benefits of these drugs, thus expected to even further increase consumer interest. 

Yellow Light

1. International SPF Brands Meet U.S. Retail

The SPF category has been one of skin care’s most notable growers of late, thanks to concurrent increases in sun safety awareness and formula innovation — the latter mainly being driven by international SPF makers like South Korea’s Beauty of Joseon, Australia’s Ultra Violette and Spain’s Isdin. 

Because the U.S. has not approved a new UV filter for sunscreen use since 1999, consumers in search of the most up-to-date filters must look abroad — but perhaps not for long. After TikTok virality propelled its business from $31 million in 2020 to an anticipated $200 million-plus in 2024, Beauty of Joseon — best known for its $18 Relief Sun SPF 50+ PA++++ — is planning to enter U.S. retail no later than 2025 via CVS Pharmacy and Target. 

Puig-backed Isdin, meanwhile, recently entered 323 Sephora U.S. doors, while Ultra Violette — which received a $15 million AUD minority investment from Aria Growth Partners in January — has revealed plans to enter U.S. retail by 2025. The brand is currently available in 29 markets, all of which approve its more modern suite of SPF filters including bemotrizinol and bisoctrizole. 

Like Beauty of Joseon and Isdin, though, the brand has readied FDA-approved iterations of its hero offerings for sale in the U.S. — but like many others, the brand is banking on the potential approval of bemotrizinol to the FDA’s sunscreen monograph by 2026, after which it has “a pipeline of new products ready to launch.” Between new, worldly players and potential, long-awaited chemical filter approvals, the SPF category looks to be on the brink of a seismic shift, indeed. 

2. Platform Play 

When it comes to emerging platforms, the distinction between fad and long-term cultural consequence often isn’t immediately apparent. In the last few years alone, new players from Threads to BeReal to Ty Haney’s Try Your Best to the metaverse and its network of worlds have cropped up — each to relatively instant buzz, though varying degrees of longevity. 

BeReal, which saw a meteoric rise in 2022 as the seemingly ultimate “casual” social media platform (the app eschews advertising altogether, and prompts an unplanned, once-a-day post at the same time for all users), reached 73.5 million daily active users at its peak that August, per Apptopia. This base dwindled to 23 million users by January 2024.

“R.I.P BeReal,” said Marina Mansour, vice president of beauty and wellness at influencer marketing agency Kyra, who noted that though brands were quick to jump on the platform, consumers weren’t as excited to see them there. “There’s always this want to be a fast mover and move for the sake of moving.” 

A similar decline was demonstrated by Threads, Meta’s “X” rival app which reached 100 million users within five days of launching in 2023. The platform’s early days saw a swell in beauty and lifestyle brands tapping into the platform, though the majority have since gone quiet: Within weeks of launch, Threads’ active user base had halved, according to CEO Mark Zuckerberg, and there has been a steady drop-off in usage since. 

Conversely, Haney’s TYB, a community-oriented platform which allows users to keep up with their favorite brands and engage via forums, challenges, voting and collecting blockchain-based rewards, has actually seen steady growth since its launch in 2022. More than 90 beauty, fashion and lifestyle brands have signed on and maintained a presence on the platform, including giants like Glossier and Chapstick (both of which joined this summer), and cult-favorite indies like Topicals and Dieux. 

TYB tells WWD it will cross the 100-brand threshold “well before” the end of 2024, and that more than 400,000 brand-created challenges were completed by users in August, up from roughly 70,000 in January, with there being a growing correlation between challenge completion, purchase rate and loyalty. 

While it’s not as shiny and new, Reddit, too, has been a longtime hub for beauty discourse, and could thus also offer an opportunity for beauty brands. 

3. Incubators

When it comes to incubators, things are a little murky in terms of what will stick. For example, Maesa boasts a portfolio of brands like Kristin Ess, Being Frenshe by Ashley Tisdale and Fine’ry and has amassed $365 million in beauty sales in 2023, up 20 percent from 2022. Then there’s Amyris, which incubated brands like Naomi Watts’ menopause company Stripes and JVN’s eponymous hair care line, but filed for Chapter 11 bankruptcy in August 2023, with court documents stating the brand had accumulated $1.3 million in debt. 

“There’s become a real paint-by-numbers approach, which lacks bravery and distinctive creative direction,” said futurist and founder of Light Years, Lucie Greene. 

With younger generations like Gen Z and Gen Alpha seeking authenticity and founder-led brands, it is harder for incubators to build lasting brands. 

“Aside from the fact that a lot of the beauty brands from incubators are not actually creating proprietary products… the actual stuff is not that distinctive,” Greene said, noting that they run a risk tapping celebs to front the brand. “The most interesting beauty brands that really break through are the ones where a founder identifies this niche and makes it their own.” 

However, there are some bright spots. Greene specifically pointed to creative agencies created by high profile entrepreneurs like Pharrell Williams, Ryan Reynolds and Frank Ocean. 

“They’re creating these multihyphenate creative agencies that are totally tapped into culture, can move quickly, have decisiveness and just understand the zeitgeist a bit more,” she said. 

Red

1. Luxury Beauty E-tail 

The luxury beauty e-commerce landscape continues to struggle. After acquiring Violet Grey and entering beauty with a marketplace of more than 100 prestige brands in 2022, the luxe platform Farfetch folded its beauty business just one year later in August 2023, having never established strong enough footholds in the category and seeing overall downturn, even in its fashion side. The company has been exploring a potential sale of Violet Grey for the last year, as previously reported by WWD. 

Moda Operandi, too, entered beauty in January 2023 with brands like Hermès, Violette_FR and niche fragrance company Régime des Fleurs among its roster, joining the likes of Net-a-porter and Ssense. One source posited, though, that luxury beauty e-commerce can be an uphill battle because “people want to try before they buy — especially when making a big investment,” and that luxury e-commerce sites which also have physical locations, as Cosbar and Moda Operandi do, could have an advantage in establishing themselves a go-to purchase destination. While the opportunity for a luxury beauty play, particularly in the U.S., certainly exists, it is still unclear if the current players can crack it.