Cosmetics ODM Market Market Size, Share & Growth Report 2031

Report Description

Cosmetics ODM (Original Design Manufacturer) Market Outlook 2031

The global cosmetics ODM (original design manufacturer) market size was USD 53.141 Bn in 2022 and is likely to reach USD 84.584 Bn by 2031, expanding at a CAGR of 5.3% during 2023 to 2031. The market growth is attributed to the growing demand for customization and the rising popularity of private labeling.

Growing demand for clean and sustainable beauty products is anticipated to boost the growth of the cosmetics ODM (original design manufacturer) market. Growing innovation in formulations leads to the production of high-performance and effective beauty products.

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A cosmetic ODM (original design manufacturer) designs and manufactures cosmetic products for other brands or companies. These ODMs are responsible for the entire product development process, from conceptualizing and formulating the product to packaging and labeling. They essentially create products that are later sold under brand name of another company.

The market report finds that the COVID-19 pandemic hampered the cosmetic ODM (original design manufacturer) market. The pandemic disrupted global supply chains, which affected the sourcing of raw materials and packaging components. This led to delays in production and, in some cases, shortages of certain ingredients. Consumer spending on non-essential items such as cosmetics decreased during lockdowns. This resulted in reduced orders and production volumes for ODMs.

Impact of Artificial Intelligence (AI) on Cosmetics ODM (Original Design Manufacturer) Market

Artificial Intelligence (AI) is expected to boost the revenue of the market players present in the cosmetics ODM (original design manufacturer) market. This technology plays a pivotal role in the market, as it is used to create personalized cosmetic formulations based on individual skin types, tones, and specific needs.

AI algorithms predicts the demand and optimizes the supply chain by ensuring that the right products are manufactured in the appropriate quantities, which reduces waste and cost. AI-driven systems manage inventory levels efficiently by minimizing overstocking.

Cosmetics ODM (Original Design Manufacturer) Market Dynamics

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Major Drivers

Increasing consumer awareness regarding the ingredients utilized in cosmetic formulations drives the market. Nowadays consumers are increasingly becoming health-conscious and informed about the products they use on their skin.

They want to know what ingredients are in their cosmetics and are concerned about potential side effects, allergies, & the overall impact on their skin and health. This demand for transparency in product ingredients has pushed cosmetic companies to provide detailed information about the components of their products.

Existing Restraints

High cost and potential side effects of products hamper the market. Products with a high cost are usually not accessible to a wide range of consumers, especially those with budget constraints. Developing innovative and safe cosmetic formulations is expensive. ODMs invest heavily in research and development to create products that stand out in the market, which leads to their high costs.

Emerging Opportunities

Growing innovation creates lucrative opportunities for the market. Continuous innovation allows ODMs to develop unique and differentiated cosmetic products. This enables brands to stand out in a competitive market by attracting more consumers. Innovations in cosmetic ingredients, formulations, and delivery systems allow ODMs to create customized products that meet the specific preferences of target audiences of their clients. This ability to offer tailored solutions lead to high client satisfaction and repeat business.

Scope of the cosmetics ODM (original design manufacturer) Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Cosmetics ODM (Original Design Manufacturer) Market Segment Insights

Product Type Segment Analysis

Based on product type, the cosmetics ODM (original design manufacturer) market is divided into hair care, skin care, fragrances, cologne, makeup, and body care. The skin care segment is expected to hold a dominant share of the market during the projection period, due to the rising emphasis on skin health and innovation in formulation.

Consumers are increasingly prioritizing skincare as a fundamental aspect of their beauty routine. This increasing awareness regarding skin health and wellness leads to a surge in the demand for a wide range of skincare products. ODMs are continuously innovating by incorporating advanced technologies and cutting-edge ingredients in skincare formulations. This addresses specific skin concerns such as anti-aging, hydration, acne, and hyperpigmentation. For instance,

• In May 2022, Pat McGrath Labs introduced its inaugural skincare product, Divine Skin, designed to enhance the effectiveness of the skincare regimen of consumers. Simultaneously, Fresh Beauty unveiled a novel facial mist within their rose-infused collection.

The hair care segment is expected to expand at a significant growth rate in the coming years, due to growing awareness of hair health and rising technological advancements. Consumers across the globe have become increasingly conscious of maintaining healthy hair.

This awareness has led to a surge in the demand for a wide range of haircare products, including shampoos, conditioners, treatments, and styling products. ODMs are at the forefront of developing innovative haircare formulations that incorporate advanced technologies and ingredients. These innovations aim to deliver effective solutions for common hair-related issues.

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Nature Segment Analysis

On the basis of nature, the global market is segregated into synthetic and natural/organic. The natural/organic segment is projected to register a high CAGR during the forecast period, due to growing consumer preference of clean beauty and the increasing demand for transparency in ingredients.

Consumers are becoming increasingly aware regarding the potential harm associated with synthetic chemicals and artificial additives in cosmetics. Therefore, there is a strong preference for products that are formulated with natural and organic ingredients. Consumers are seeking transparency in product formulations. Natural and organic products often have straightforward ingredient lists, providing consumers with a clear understanding of what they are applying to their skin.

Packaging Format Segment Analysis

On the basis of packaging format, the cosmetics ODM (original design manufacturer) market is segmented into compact cases, bottles, folding cartons, jar, palette, pump & dispenser, roll on sticks, wrap, tube, and pouches. The bottles segment is anticipated to register a robust growth rate during the forecast period, due to the rising packaging importance in the cosmetic industry and it provides versatility.

Packaging plays a crucial role in the cosmetics industry. Bottles are one of the common and versatile packaging options for various types of cosmetic products, including lotions, serums, and shampoos. Bottles come in a wide range of shapes, sizes, and materials that offer versatility in packaging solutions. This allows ODMs to cater to the diverse needs and preferences of different cosmetic brands.

The tube segment is expected to expand at a significant growth rate in the coming years, as it provides convenience and efficient product extraction. Tubes offer a convenient and portable packaging solution for various cosmetic products such as creams, lotions, gels, and ointments. Their squeezable design allows for easy dispensing and controlled usage. Tubes allow consumers to efficiently extract and use the entire contents of the product by minimizing wastage. This is especially advantageous for high-end products with premium ingredients.

End-user Segment Analysis

Based on end-user, the cosmetics ODM (original design manufacturer) market is divided into private brands, prestige brands, indie brands, and mass brands. The private brand segment is expected to generate a major revenue share of the market, due to increasing consumer demand for customized and quality products.

Private brands are often created by retailers or companies who seek to create their unique brand identity. These brands offer products tailored to the specific needs and preferences of their target audience. Cosmetics ODMs enable these brands to create customized products that align with their identity, which is a powerful selling point to further boost the market.

The mass brands segment is anticipated to gain significant revenue shares of the cosmetic ODM (original design manufacturer) market, as it provides affordability and focus on building trust. Mass brands offer products at more affordable price points as compared to prestige or luxury brands. This accessibility appeals to a broad consumer base, including price-conscious shoppers. Mass brands have established a level of familiarity and trust among consumers. Shoppers often rely on these brands for everyday beauty and personal care needs, due to their consistent quality and reliability.

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Regional Outlook

In terms of region, the global cosmetics ODM (original design manufacturer) market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the global market during the projection period, due to the increasing manufacturing hub for beauty products and rising popularity of South Korea-based beauty products, widely known as K-beauty.

Asia Pacific is recognized as a global manufacturing hub for beauty and personal care products. The region has a well-developed infrastructure, advanced technology, and a skilled labor force that is dedicated to the cosmetics industry. South Korea, in particular, has gained international recognition for its significant K-beauty trends. ODMs in the region have deep expertise in formulating and producing skincare products that cater to specific consumer preferences for natural, innovative, and effective beauty solutions. For instance,

• As per the recent data published, the beauty and personal care market in Asia Pacific is projected to reach USD 244.40 billion in 2023 and is expected to grow yearly by 3.54%.

The market in North America is projected to expand rapidly during the forecast period, owing to the growing innovation & technological advancements and rising consumer demand for diverse products. North America is known for its advanced technological capabilities & innovation in the beauty and personal care industry.

This includes advanced formulation techniques, new manufacturing processes, and advanced packaging solutions. The consumer base in North America demands for a wide range of beauty and personal care products. This includes skin care, hair care, makeup, fragrance, and others. ODMs play a crucial role in meeting such diverse consumer demand.

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