A lot of skincare brands are measuring themselves against the wrong benchmark. Not because they’re careless, but because the benchmark that shaped their expectations was real. It delivered results. And then, quietly, it stopped being a reliable guide.
That benchmark was 2020 and 2021.
Understanding what has actually happened to the Australian skincare eCommerce market since then, and what realistic, strong performance looks like today, is one of the more useful recalibrations a brand can make right now.
So this blog will be less of a blog, and more of a report, if you’re in the skincare industry, you don’t want to skip past this one.
Report in a snapshot
In this article, we cover:
• Why pandemic-era growth is a misleading benchmark for skincare eCommerce brands
• What the Australian skincare market actually looks like in 2025 and 2026
• How cost-of-living pressure is reshaping consumer buying behaviour
• Where the real growth opportunities sit, including natural beauty and social commerce
• What strong year-on-year performance looks like by current market standards
• Three strategic priorities for eCommerce skincare brands right now
The Structural Impact On Consumer Behaviour
When the pandemic hit, eCommerce adoption didn’t gradually increase. It accelerated in a way that compressed years of behavioural change into months. Australia Post data recorded 57% year-on-year growth in Health and Beauty eCommerce in 2020. In April 2020, the first full month of national lockdown, total online goods spending surged 95%.
For skincare brands, the conditions were exceptional. Consumers were home, investing in self-care routines, and buying online by necessity. Adore Beauty reported a 63% spike in exfoliator sales in March 2020 alone.
The problem is structural. That surge didn’t create a new ceiling from which growth would continue. It pulled forward years of eCommerce adoption in a very short window. The number of Australian households shopping online has grown modestly from 9 million in 2020 to 9.8 million in 2024 (Australia Post). The market didn’t keep expanding at pandemic pace. It matured.
Brands that set their forward targets against 2020 and 2021 performance are, in effect, chasing a condition that no longer exists.
What the Market Actually Looks Like Now
The Australian skincare market remains large and growing. IMARC Group values it at AUD 4.06 billion in 2024, with projections to reach AUD 6 billion by 2033, growing at a compound annual rate of approximately 4%. Online retail within skincare is forecast to grow faster, at around 6% CAGR through to 2031 (Mordor Intelligence).
These are real, sustained growth figures. They are also considerably more modest than the pandemic spike, and that distinction matters when setting strategy.
At the broader eCommerce level, Australian online spending reached AUD 69 billion in 2024, up 12% year-on-year, with Health and Beauty outperforming the overall rate at 13% growth (Australia Post). So demand is there. The channel is growing. But the competitive environment has fundamentally changed.
The cosmetic and toiletry retailing sector is now characterised as mature and saturated. International low-cost platforms including Shein and Temu have entered the market and are reshaping consumer price expectations. New domestic brands have launched. Established international brands including L’Oréal and Shiseido have increased their direct-to-consumer presence in Australia. Each new entrant increases competition for digital shelf space, share of voice, and customer attention.
Customer acquisition costs are higher. Brand loyalty is lower. And the consumer is more discerning than at any point in the past five years.
The Consumer Has Changed Too
Cost-of-living pressure is the dominant force shaping buyer behaviour right now, and beauty is not immune.
In 2024, 62% of Australian online shoppers switched brands to save money, with Gen Z and Millennials most likely to shop around (Australia Post). The average online transaction value declined to AUD 95, down 2% from the previous year, reflecting smaller basket sizes across the board.
Revenue growth in the Australian beauty and personal care sector in 2024 was driven primarily by price increases rather than volume growth (Euromonitor International). Consumers are paying more, but buying less. That is a meaningful signal for how brands structure offers, communicate value, and approach retention.
At the same time, the shift is not purely toward the cheapest option. Euromonitor data shows that 29% of Australian respondents would rather buy fewer but higher quality items. The consumer is not abandoning quality. They are being more selective about where they spend.
Mid-market brands face the most pressure from this bifurcation. Positioned between low-cost private label alternatives and established premium players, they are being squeezed from both sides. The brands navigating this well are those with a clearly defined value proposition, one that gives consumers a specific reason to choose them, rather than relying on category interest alone.
Where the Real Opportunity Sits
Not everything in this landscape is harder. One segment is growing faster than the broader market and carrying a consumer base that tends to be loyal and values-driven.
Natural and organic skincare is projected to grow at a CAGR of 7% through to 2031, outpacing the overall skincare market forecast (Mordor Intelligence). Consumer demand for clean beauty, ethically sourced ingredients, and transparent manufacturing is structural, not cyclical. According to Euromonitor’s Voice of the Consumer survey, 48% of Australians believe they can influence environmental outcomes through their purchasing decisions.
For brands with credible positioning in this space, the tailwind is real. Clean beauty is no longer a niche. It is mainstream, and the brands that can substantiate their claims, through ingredient transparency, sourcing traceability, and sustainable practices, are well placed to capture a growing and engaged consumer segment.
Social commerce is the other compounding force. Australia’s social commerce market reached AUD 4.9 billion in 2024 and is projected to grow to AUD 8 billion by 2029 (Australia Post). 74% of Gen Z and Millennials shop and browse products via social media. Discovery is the primary driver, cited by 56% of social shoppers.
For skincare brands, social is not optional infrastructure. It is a primary acquisition channel, and increasingly a purchase channel. The strategic question is not whether to invest there, but how to build a content and influencer system that compounds over time rather than burning budget on isolated campaigns.
So What Does Strong Performance Look Like?
This is the most important recalibration.
Given that the Australian skincare market is growing at approximately 4 to 5% annually, and online skincare retail at around 6%, a well-run eCommerce-led skincare brand achieving 8 to 15% year-on-year revenue growth is meaningfully outperforming the market. By current standards, that constitutes strong performance.
Growth beyond that range is achievable, but it requires either significant market share gains, expansion into new customer segments, or both. It is not the baseline.
Top-line revenue is also an incomplete measure of brand health. Brands that are growing revenue through heavy discounting, declining repeat purchase rates, or rising acquisition costs are building on an unstable base. The metrics that matter most right now are average order value, repeat purchase rate, discount dependency, and margin per order. These are under pressure across the category.
Retaining existing customers is as important as acquiring new ones. In a market where 62% of shoppers will switch brands to save money, the brands that build genuine loyalty through product efficacy, consistent experience, and values alignment will outperform those that rely on acquisition spend to replace churned customers.
The Strategic Takeaway
The Australian skincare eCommerce market is not in decline. It is normalising, and that is a different problem with different solutions.
Brands that recalibrate their growth expectations to reflect current market conditions will make better decisions about channel investment, pricing strategy, and where to build capability. Brands that continue to measure against pandemic-era performance will misdiagnose what is actually happening.
Three things are worth prioritising right now.
- Build retention before scaling acquisition. In a market where switching behaviour is high and acquisition costs are rising, the economics of customer retention are more favourable than they have ever been. A structured repeat purchase programme, a post-purchase communication sequence, and a loyalty mechanism are not optional. They are the foundation of sustainable growth.
- Define your position clearly. The mid-market squeeze is real. If your brand cannot articulate a specific reason to exist, distinct from a private label alternative below you or a premium brand above you, the market will not make that distinction for you. Natural positioning, efficacy claims, and ethical sourcing are credible anchors when they are substantiated.
- Treat social commerce as a system, not a channel. Discovery on social media is growing. Purchase on social media is growing. Brands that build consistent, high-quality content and invest in influencer relationships that compound over time will build structural advantages in customer acquisition cost that one-off campaigns cannot replicate.
The market is still growing. The opportunity is still real. The brands that recognise what has changed, and build accordingly, are the ones that will look back on 2026 as the year they got the foundations right.
Want help pressure-testing your eCommerce growth strategy against current market conditions? Reach out to start with a clear growth diagnostic.
References
All USD values have been converted to AUD using an exchange rate of 1 USD = 1.42 AUD (April 2026).
Australia Post (2021). Australia Post eCommerce Report 2021. Available at: https://auspost.com.au/content/dam/auspost_corp/media/documents/ecommerce-industry-report-2021.pdf [Accessed 14 Apr. 2026].
Australia Post (2025). Australia Post eCommerce Report 2025. Available at: https://auspost.com.au/content/dam/auspost_corp/media/documents/ecommerce-report-2025.pdf [Accessed 13 Apr. 2026].
Coherent Market Insights (2025). Australia Skincare Products Market Size and Forecast to 2030. Available at: https://www.coherentmarketinsights.com/market-insight/australia-skincare-products-market-5079 [Accessed 13 Apr. 2026].
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