Scaling Up Beauty: An Analysis of Economies of Scale in the Cosmetics Industry
Open accessAbstract
In this research, the cosmetics industry’s economies of scale between 2018 and 2022 were explored by examining the cost efficiencies of 20 cosmetics companies through a translog cost function model. The companies’ size was evaluated based on their total revenue and total assets. The study also analyzed the origin of cost efficiencies by considering various cost components such as cost of goods sold, operating costs, selling and general expenses, as well as administrative expenses concerning the total assets of the company. The findings revealed that, on average, larger companies had lower cost of goods sold and operating expenses. However, the cost efficiencies were not distributed equally as some companies showed considerable cost efficiencies, while others exhibited small economies of scale as their size increased.
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The cosmetics industry is predicted to grow at a strong rate due to growing consumer awareness of appearance, integration of skincare and hair care into daily routines, and growing demand for natural and organic cosmetics.
“Notwithstanding these differences, it is generally agreed that the cosmetics industry is predicted to grow at a strong rate due to factors like growing consumer awareness of one's appearance, the integration of skincare and hair care products into daily routines, and the growing demand for natural and organic cosmetics [26].”
From AN OVERVIEW OF NEW TRENDS IN THE COSMETICS INDUSTRY (2025) · cites this paper as [26]
In 2023, the global cosmetics market was valued at about USD 295.95 billion.
“In 2023, the market was valued at about USD 295.95 billion.”
From AN OVERVIEW OF NEW TRENDS IN THE COSMETICS INDUSTRY (2025) · cites this paper as [26]
Fortune Business Insights estimated the market size at USD 374.18 billion in 2023 and expected it to reach USD 758.05 billion by 2032, with a CAGR of 9.8%.
“The market is expected to reach USD 758.05 billion by 2032, with a compound annual growth rate (CAGR) of 9.8% during the forecast period, according to Fortune Business Insights, which estimated a higher valuation, estimating the market size at USD 374.18 billion in 2023 [26].”
From AN OVERVIEW OF NEW TRENDS IN THE COSMETICS INDUSTRY (2025) · cites this paper as [26]
Grand View Research estimates the global cosmetics market would reach USD 445.98 billion by 2030, growing at a CAGR of 6.1% from 2024 to 2030.
“Grand View Research estimates that the market would reach an estimated USD 445.98 billion by 2030, having grown from 2024 to 2024 at a compound annual growth rate (CAGR) of 6.1%.”
From AN OVERVIEW OF NEW TRENDS IN THE COSMETICS INDUSTRY (2025) · cites this paper as [26]
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References 12 · Cited by 2
- Authors
- Bennur, S., & Malhotra, D. K.
- Affiliations
- Thomas Jefferson University (US)
- ORCID
- Malhotra, D.K.
- Venue
- Journal of Applied Business and Economics
- Publisher
- North American Business Press
- Published
- 2023-06-05
- Volume
- 25
- Issue
- 2
- ISSN
- 1499-691X (ISSN-L)
- OpenAlex
- W4379387838
- Cited by
- 2
- References
- 12
- Citations by year
- 2025: 1 · 2024: 1
- FWCI
- 0.37
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- Journal of Applied Business and Economics (publishedVersion)
- Topics
- Social Sciences › Decision Sciences › Management Science and Operations Research › Efficiency Analysis Using DEA
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Keywords
- economies of scale, cosmetics industry, cost efficiency, translog cost function, firm size, cost of goods sold, operating costs, administrative costs
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