The global vegan cosmetics market is booming. Like the plant-based industry, which is also experiencing rapid growth, more consumers are shifting to plant-based and sustainable products with increasing concern for the environment and animal welfare.
A recent study from Grand View Research found that the vegan cosmetics industry will be worth US$20.6 billion by 2026. According to the report, the vegan cosmetics market has reached $15 billion in 2020, with a compound annual growth rate (CAGR) of 5.1 per cent over the next six years.
The compound annual growth rate is a business- and investment-specific term for the geometric progression ratio that provides a constant rate of return over time.
The study also analysed how rising plant-based consumer demand accelerates the popularity of vegan products across all sectors.
In the US, the vegan cosmetics industry is currently nearly worth $4.3 billion, while China’s is expected to hit $4.2 billion in 2026 with a CAGR of 7.9 per cent. In addition, the report found that the Chinese vegan cosmetics market is growing at an accelerated pace.
The US, Japan, China, Canada, and Europe are predicted to lead the booming vegan cosmetics industry within the next five years, with China the fastest-growing.
Because of rising global consumer awareness and interest in clean and cruelty-free cosmetics, brands have held back from entering China to keep their stand against animal testing. However, the recent change of this policy is resulting in a dramatic shift in the local beauty industry.
Chinese consumers as a whole are becoming more conscious of sustainability and environmental issues. For example, reports Luxury Society, on the Chinese social media platform RED, more than 200,000 user-generated notes (posts) include the term “sustainability”, with users sharing their sustainable lifestyles and the “sustainable” products they bought.
In the US, the vegan cosmetics market is expected to exceed $3.16 billion by 2025, owing to the growing number of manufacturers and suppliers of vegan cosmetics. Furthermore, the demand for vegan cosmetics is highly competitive due to a growing number of international brands with diverse product portfolios.
The study also predicted that other countries like Japan, Canada, and Germany would experience similar growth in the vegan cosmetics market. Japan’s market is predicted to increase by 2.8 per cent, Canada’s by 4.6 per cent, and Germany’s by 3.2 per cent CAGR.