PUBLISHED
September 29, 2025
AUTHORS
Pierfrancesco Biagiola
Carlotta Borghi
TOPICS
Retail & Consumer GoodsAI and Tech in Beauty: From Molecular Design to Personalization
AI does not replace human creativity—it enhances it. When guided by strategic vision, technology becomes an accelerator that amplifies creative capabilities and enables the exploration of previously unthinkable solutions. However, speed and precision in development do not automatically guarantee commercial success: brand authenticity, narrative consistency, and the ability to build an emotional connection with consumers remain essential.
In the European context, the potential is considerable. According to reprocessed Euromonitor data from BIP's Corporate Finance & Strategy team, the beauty & personal care sector is projected to grow steadily with a CAGR of 5.7% between 2024 and 2028. Growth is led by skincare, which holds a 37.5% market share in 2024 and is growing at 5.5% annually (2024–2028), followed by haircare (+4.9%) and the fragrance segment, which shows the highest growth rate (+7.3%). Also notable is the dynamic expansion of the makeup sector (+6.4%), driven by consumer preferences for natural and minimalist aesthetics.
The driving force behind this systemic change is the younger generation—mainly Millennials and Gen Z—who prefer sustainable products, digital channels, and customized experiences. As of 2024, e-commerce already accounts for 25% of the global market, with peaks of 41% in the United States. It continues to grow at double-digit rates, particularly in the realm of social commerce—which now makes up 20% of digital sales—fueled by the popularity of creators and platforms like TikTok.
At the same time, beauty tech continues to expand: the beauty device market reached approximately $55 billion in 2024 and is expected to surpass $200 billion by 2033, with an annual growth rate of 15.77%. Biotech skincare is also rapidly emerging, with an estimated value of $5.44 billion in 2024 projected to reach $8.25 billion by 2031.
These numbers reflect more than just revenue growth—they point to a structural shift: technology is now a core component of the creative and production process, influencing not only positioning strategies but also how brands interact with the market.
Concrete examples include the creation of fragrances based on predictive analysis of olfactory trends across countries, or the development of skincare lines tailored to local environmental conditions. In both cases, AI helps reduce uncertainty and maximize the effectiveness of product decisions, while strategic partnerships between brands and biotech firms (such as Estée Lauder with Serpin Pharma or Oddity with Revela) illustrate an ecosystem increasingly integrated across science, technology, and creativity.
Toward a New Phase of Integration
AI adoption in the Beauty & Fragrance sector still has significant room to grow, and the outlook is broad. Companies that successfully integrate these technologies and methodologies into their core processes will benefit not only from accelerated development but also from a stronger ability to adapt to market shifts and meet evolving consumer expectations.
The challenge is twofold: on one hand, leveraging AI’s predictive and automated potential; on the other, preserving the intangible value of human experience and craftsmanship—elements that distinguish a product in an increasingly competitive market.
The future of the sector depends on the ability to create an integrated ecosystem in which technology and creativity coexist in balance. Only then will it be possible to preserve brand identity while offering increasingly personalized experiences aligned with the needs of a European consumer who is informed, discerning, and open to innovation.