THE CANADIAN BEAUTY MARKET IS GROWING, LIPSTICK EFFECT IN FULL SWING
The Canadian beauty market is growing with skincare products leading the charge, followed by cosmetics, hair care and perfumes. The COVID-19 pandemic significantly influenced consumer behaviour, as people focus more on self-care and wellbeing. According to Global News Canada, beauty category sales in the country increased by 18% in the first nine months of 2023 compared to the same period in 2022. They were up by 47% from 2021, despite nearly 80% of Canadians surveyed indicating that the high cost of living had forced them to reduce their spending.
The market is expected to grow at a compound annual growth rate (CAGR) of 3% by 2026. The largest segment, skin care, grew by approximately 34% from 2019 to 2023, reflecting a strong consumer focus on maintaining healthy and radiant skin in the country’s cold climate. Increased interest in value-added features such as natural formulations is partly responsible for this growth. During the same period, colour cosmetics, saw growth of approximately 29%, while hair care rose by roughly 21%. The hair-care segment indicates a steady demand for products that promote hair health and styling, with consumers increasingly seeking products tailored to specific hair types and concerns.
Another telling indicator of the increasing demand for beauty products and the thriving retail environment in the country comes with the news that in 2022, leading beauty retailer Sephora opened 14 new stores across Canada. The French multinational retailer has established itself as the top sales performer in Canada’s beauty industry, underscoring the significant opportunities for new entrants to capitalise on this dynamic market.
CANADIAN CONSUMERS WANT TO LOOK, FEEL AND DO GOOD
Affordable luxury
Navigating a challenging economic landscape, the “lipstick effect” is tangible in Canada, driving growth in fragrances, colour cosmetics and skincare, as cash-strapped consumers indulge in products whose prices are elevated but still attainable. Consumers are buying fewer luxury items but are willing to pay more for high-quality products that deliver value, particularly in premium skincare and haircare products that claim to offer long-term benefits.
Self-care
Health and wellbeing have become crucial to Canadian consumers, with self-care emerging as a significant priority. They are invested in improving their quality of life, a trend reflected in the increased demand for skincare and haircare products that promote overall wellbeing, including those offering therapeutic benefits like stress relief and relaxation. The adoption of self-care techniques is also driving the growth of bath and shower products, which also enjoyed a notable increase in sales during the pandemic.
Sustainability
The growing emphasis on improving individual health and well-being is coupled with a rising desire to safeguard the environment, driving Canadian consumers to seek products that are sustainable, made with natural ingredients and are cruelty-free. Brands that demonstrate a commitment to environmental responsibility and ethical practices resonate strongly with Canadian consumers, swelling the popularity of eco-friendly packaging, organic ingredients and more transparent supply chains.
THE SWEDISH BRAND IS SYNONYMOUS WITH SUSTAINABLE STYLE
Nothing says sustainability in style quite like Swedish.
With an offering of authentic, eco-friendly, natural and innovative beauty solutions that are likely to resonate with the modern beauty consumer, Swedish beauty brands are uniquely positioned for the Canadian market.
CANADA AND SWEDEN, THE PERFECT BEAUTY MATCH
Advantageous trade agreements and cross-border e-commerce
Swedish beauty companies looking to tap into the Canadian market can leverage the significant advantages offered through the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. This free-trade agreement eliminated 99% of all tariffs by 2024, facilitating smoother and more cost-effective market entry.
Additionally, the rise of cross-border e-commerce provides an excellent platform for Swedish brands to reach Canadian consumers directly. Cross-border e-commerce allows companies to test the market and assess consumer response before committing to a full market entry. Unlike offline sales, this approach faces fewer regulatory hurdles, making it a more accessible and flexible option for market entry.
Market opportunities
The Canadian beauty market offers significant opportunities for growth. While major players like Estée Lauder and L’Oréal dominate the market, holding nearly 60% of the revenue, there is still considerable potential for new brands to enter and prosper.
Swedish beauty brands such as luxury fragrance and leather brand Byredo or hair-care specialists SACHAJUAN and Maria Nila have already found success in Canada. Their focus on sustainable, authentic and high-quality products appeal directly to the demands of modern Canadian consumers. Their success demonstrates the strength of the Swedish approach to beauty in Canada, indicating a promising business opportunity for other Swedish beauty companies looking to enter this attractive market.
