Big Beauty faces growing threat from AI, smaller rivals
Global beauty giants are losing ground to smaller rivals, as AI-led disruption and the rise of Korean brands reshape the sector and cheaper, lesser-known brands with targeted digital marketing lead growth, J.P. Morgan said. AI-powered searches could shift beauty shopping from "browse and choose" to AI-generated shortlists requiring brands to provide consistent product information, defensible claims, strong reviews and reliable pricing, strategists led by Celine Pannuti said. Companies need portfolios aligned with rapid growth trends and business models built for agility, speed and
2% on Wall Street futures. Funds cut bearish bets on Japan's yen in the latest week. P. Morgan said global beauty giants are losing ground to smaller rivals as AI-led disruption and the rise of Korean brands reshape the sector, while cheaper lesser-known brands using targeted digital marketing are driving growth.
The bank said AI-powered searches could move beauty shopping from "browse and choose" to AI-generated shortlists, which would require brands to provide consistent product information, defensible claims, strong reviews and reliable pricing. Beauty demand remains robust, but customers are increasingly prioritising product efficacy, novel technologies and innovative ingredients, driving a structural shift in the industry, the note said on Monday. Companies need portfolios aligned with rapid growth trends and business models built for agility and speed. P.
Morgan said major beauty names including Lancome, Olay, Estee Lauder and Neutrogena are losing share, while La Roche-Posay, CeraVe, independent labels and K-beauty brands have gained ground. The bank said K-beauty, or Korean brands, benefits from rapid innovation, effective viral marketing and lower prices, and now accounts for 8-10% of the global market. It added that these brands are capturing a third of industry growth, while skin care adjacencies such as aesthetic injectables, beauty devices and supplements are becoming more popular and could further fragment consumer spending and pressure legacy beauty companies.