Beauty and personal care: cosmetics, skincare, haircare and fragrance

Lesson 3 of 3 Math checked Facts checked against sources on 1 October 2026 13 min

Beauty players, trends 2024 to 2026, and how to crack the cases

Who the players are by region, what changed from 2024 to 2026 (China and airport shops, fragrance, specialty stores, social commerce, fast-growing regions), typical prompts, traps and drills.

Industry brief, with a one-minute summary: Beauty and personal care

Firm processes and online tests change from year to year and differ by office. Use this to prepare, and confirm the exact current steps on the firm's own careers page.

Key takeaways

Beauty cases usually ask how a brand can grow, why profit fell, whether to enter a new country or channel, or whether to buy a fast-growing brand.
Common traps: Reaching for a generic framework instead of the real driver: in beauty that is repeat demand for the brand, the share of the price kept by the channel, and the spend needed to win each sale.
Slower growth: McKinsey estimates the world beauty market at about USD 450 billion, growing about 7 percent a year from 2022 to 2024, and expects about 5 percent a year to 2030 (an outside estimate).
Fragrance is the growth engine: Estée Lauder's fragrance net sales grew 10 percent in its year to June 2026, while makeup was virtually flat.

Key idea

Beauty cases usually ask how a brand can grow, why profit fell, whether to enter a new country or channel, or whether to buy a fast-growing brand. The answer nearly always comes back to three things: is the brand wanted (repeat buyers, share of search), is it in the right channel at the right price, and what does it cost to win each sale.

Examples of beauty players by region (examples only, not a ranking)

Examples of beauty players by region (examples only, not a ranking)
Region	Brand owners	Retailers and platforms
Global	L'Oréal, Estée Lauder, Unilever, Procter and Gamble, Shiseido, LVMH (Dior, Guerlain), Coty, Beiersdorf (Nivea)	Sephora (LVMH), AS Watson (Watsons, Superdrug, Kruidvat), Amazon, duty free shops
Europe	L'Oréal, Beiersdorf, Puig, Chanel, Pierre Fabre	Douglas, Boots, dm, Rossmann, Sephora, pharmacies
Middle East	Global brands; regional fragrance houses such as Arabian Oud and Ajmal; Huda Beauty	Chalhoub Group (Faces, and distribution for global brands), Sephora, Noon, Amazon, airport duty free
India	Hindustan Unilever (Lakmé, Dove), L'Oréal India, Honasa Consumer (Mamaearth), Nykaa's own brands	Nykaa, Reliance (Tira), Purplle, Amazon, Flipkart, chemists and general stores
Southeast Asia	Paragon (Wardah, Indonesia), global brands, Korean and Japanese brands	Watsons, Guardian, Shopee, Lazada, TikTok Shop, Sociolla (Indonesia)
United States	Estée Lauder, e.l.f. Beauty, Procter and Gamble, Coty, L'Oréal USA	Ulta Beauty, Sephora, Walmart, Target, Amazon, TikTok Shop

So-what

A few global groups own hundreds of brands, but the shelf belongs to the retailers and platforms of each region. Regional distributors, such as Chalhoub in the Gulf, often decide which global brands reach shoppers.

Size and profit of some beauty companies, latest full year (each in its own currency; years end in different months)

Size and profit of some beauty companies, latest full year (each in its own currency; years end in different months)
Company	Sales	Growth	Operating margin
L'Oréal (2025)	EUR 44.05 billion	4.0 percent like-for-like	20.2 percent
Estée Lauder (year to June 2026)	USD 15.05 billion	3 percent organic	5.2 percent reported, 11.2 percent adjusted
LVMH Selective Retailing, including Sephora (2025)	EUR 18.35 billion	4 percent organic	About 9.7 percent
Ulta Beauty (year to January 2026)	USD 12.4 billion	9.7 percent (5.4 percent comparable sales)	12.4 percent
Nykaa (year to March 2026)	INR 10,022 crore	26 percent	EBITDA margin about 7.5 percent

So-what

Brand owners with strong brands earn the fattest margins. Retailers earn less per unit of sales, and online platforms in fast-growing markets earn thinner margins still while they grow.

Trends 2024 to 2026 (checked 1 October 2026)

Slower growth: McKinsey estimates the world beauty market at about USD 450 billion, growing about 7 percent a year from 2022 to 2024, and expects about 5 percent a year to 2030 (an outside estimate). L'Oréal grew 4.0 percent like-for-like in 2025.
China and airport shops cooled: L'Oréal's North Asia region grew only 0.5 percent like-for-like in 2025, and Shiseido reported China and travel retail sales down 4.3 percent and an operating loss of about JPY 28.8 billion, after a large goodwill write-down (a cut in the book value of businesses it had bought). Estée Lauder's mainland China sales grew by a high single digit in its year to June 2026, a sign of recovery.
Fragrance is the growth engine: Estée Lauder's fragrance net sales grew 10 percent in its year to June 2026, while makeup was virtually flat. L'Oréal completed its purchase of Kering Beauté, including the fragrance house Creed and 50-year licences for Bottega Veneta and Balenciaga (and later Gucci), on 31 March 2026, in a deal valued at EUR 4 billion.
Specialty stores gained: LVMH's Selective Retailing business, led by Sephora, grew 4 percent organically in 2025 and Sephora opened about 100 stores, and Ulta Beauty's comparable sales rose 5.4 percent in its year to January 2026; Ulta also bought the UK chain Space NK.
Brands born on social media: e.l.f. Beauty agreed in May 2025 to buy rhode, a skincare brand that had sold USD 212 million in the 12 months to March 2025 almost entirely through its own website, for up to USD 1 billion (USD 800 million at closing plus up to USD 200 million later if it keeps growing).
The fastest growth is outside the old markets: L'Oréal grew 10.9 percent like-for-like in its region covering South Asia, the Pacific, the Middle East and Africa, and 8.3 percent in Latin America. In India, Nykaa's revenue grew 26 percent to INR 10,022 crore in the year to March 2026, with beauty GMV (the value of goods sold on the platform) up 27 percent. AS Watson, with over 17,000 stores in 31 markets, reported double-digit beauty growth in Asia in 2025.
Restructuring: Estée Lauder expects a net reduction of about 10,000 positions in total under its recovery plan, and its adjusted operating margin rose from 8.0 to 11.2 percent in the year to June 2026, showing that cost cases are common even in a high-margin industry.

Beauty case prompts, the structure to use, and the first driver to check

Beauty case prompts, the structure to use, and the first driver to check
Prompt	Structure hint	First driver to check
A prestige skincare brand's profit fell 30 percent while sales held. Why?	Profit per unit: price received by channel, cost of goods, advertising, selling costs, mix	Channel mix (airport and China sales) and advertising per unit sold
Should a European dermocosmetics brand enter India?	Market entry: demand and price points, channels (pharmacies, Nykaa, quick commerce), rules, partners	Price the Indian shopper will pay, and the cost to win each buyer
A Gulf fragrance house wants to double sales in five years.	Growth: new markets, channels, products, price; build or buy	Which channels and countries bring repeat buyers
Should a global group buy a fast-growing brand born on social media?	Acquisition: growth quality, repeat purchase, fit with channels, price paid, risks	Repeat buyers and growth without the founder's or creators' personal reach
A drugstore chain in Southeast Asia wants to launch its own beauty brand.	Private label: margin, shopper trust, impact on brand suppliers, shelf space	Gross margin gain against lost supplier support

So-what

Start with demand that repeats, then the channel and its share of the price, then the spend to win each sale.

Using this in a case

Ask: which tier (mass, prestige, dermatological, professional) and which category; which channels and countries bring the sales; what share of buyers buy again; and how much is spent on advertising and promotion.
Calculate: the price waterfall from shelf price to brand net price to operating profit per unit, contribution per unit by channel, and the payback on the cost of winning a new buyer.
Say: name the driver, not a list of everything. For example, "Profit fell because sales moved from department stores to online platforms where we receive 8 points less per unit, while advertising per unit rose. I would test the price we receive and our spend per order before anything else."

Common traps

Reaching for a generic framework instead of the real driver: in beauty that is repeat demand for the brand, the share of the price kept by the channel, and the spend needed to win each sale. Treating a 75 percent gross margin as profit. Counting sell-in as demand when stock is piling up in shops. Assuming a brand that grew fast online will keep growing once advertising gets dearer. Forgetting that a product claiming to treat a skin condition may be regulated as a medicine.

Read the brief and related industries

The beauty and personal care brief puts this industry on one page. Branded consumer goods, luxury and retail have their own briefs, and beauty follows the brand premium pattern.

Beauty and personal care brief

Same pattern elsewhere

Beauty earns its price from the brand, like luxury fashion and premium drinks. The brand premium pattern lists the questions to ask in any of them.

The brand premium pattern

Timed math drill

Ulta Beauty had net sales of about USD 12,400 million in its year to January 2026 and 1,591 stores. What were sales per store, in USD million, if all sales were counted against stores? (Round to two decimals.)

Timed math drill

A shopper in Dubai buys an AED 200 moisturiser every two months and stays with the brand for three years. The brand receives 55 percent of the shelf price. How much does the brand receive from this shopper over the three years, in AED?

Check your understanding

A beauty group pays a high price for a brand that grew fast on social media. What is the biggest risk to check?

Check your understanding

Why did airport shops and China matter so much for prestige beauty from 2024 to 2026?

Terms in this lesson

Market share Like-for-like sales (LFL)Travel retail Constant currency growth Cannibalization Synergy Private label (own brand)Gross merchandise value (GMV)

Sources for this lesson (11)

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