Beauty industry witnessing strong increase in year-over-year value
Recently, NeilsenIQ released the stats of its 2025 State of Beauty report, which found that the industry is seeing strong continued growth.
The overall category saw a 7.3% increase in year-over-year value, with e-commerce and social shopping seeing a jump as the channels consumers are turning to when it comes to making their purchases.
To learn more about the report and what the future of the industry looks like, Inside Beauty spoke to Anna Mayo, vice president for NIQ’s Beauty Vertical.
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“In 2024, e-commerce and social commerce sales continued to out-pace the growth of in-store sales. As of the latest period in store beauty sales were up +2.7% in dollars, vs online sles +13.5%. Currently, 43% of beauty and personal care sales are happening online, which has risen from 34% in 2020. TikTok Shop's social selling platform has been another important source of growth, with over $1B of sales in the last year alone across beauty,” said Mayo.
E-commerce is driving global beauty sales, with varying levels of growth across regions. In the United States, online sales continue to significantly outpace in-store purchases, accounting for 41% of all beauty and personal care sales through e-commerce platforms.
“TikTok shop has seen huge growth over the past year in the US, now ranking as the #8 health and beauty US e-commerce retailer. We have seen strong consumer adoption of TikTok shop, with 12.5% of US e-commerce shoppers having shopped on TikTok shop, and the average beauty shopper having made 3.4 transactions on the app over the course of a year,” said Mayo. “TikTok Shop is re-making beauty retail by seamlessly merging entertainment and commerce, and becoming a destination for impulse shopping. In fact, 68% of all purchases made on social selling sites are impulse purchases that helped people discover new items or find favorites at a great price. 84% of consumers tell us that they have a good or excellent experience on social shopping sites.”
While digital commerce has seen growth in the past five years, in-store retail has largely stayed the same. The retailers of the future will need to transform the in-store experience to meet the needs of consumers, the report noted.
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“For many brands, TikTok shop is functioning as a powerful awareness driving tool, introducing new brands to consumers and spurring impulse purchasing. We often will see that items that go viral on TikTok, proceed to then sell out across other mass and beauty specialty retailers as well,” said Mayo.
The U.S. category growth is led by fragrance and bath and shower, both experiencing continued momentum. The bath and shower segment benefits from a growing consumer focus on total body care, the report highlights.
Clean beauty—encompassing eco-friendly packaging, cruelty-free formulations, and ethically sourced ingredients—has moved from niche to mainstream. Consumers expect brands to be transparent and accountable.
Gen Z and millennials are redefining beauty norms, prioritizing skincare over cosmetics and favoring brands that align with their values
“We foresee that 2025 will be another positive year for beauty, as consumers continue to prioritize this category even as they cut back in other areas of the store. However, the year is going to be bumpy as the impact of tariffs becomes known, and some of those prices are passed along to consumers, who have already absorbed so many price increases over the past 5 years,” Mayo noted.
