Functional cosmetics are those elements in the cosmetics products formulation that impart pharmacological properties or other direct effects in the cure, treatment, diagnosis, mitigation, or prevention of diseases, and they are used in cosmetics to provide functional properties when applied to the skin. According to BlueQuark Research & Consulting, the global functional cosmetics market is expected to witness significant growth during the forecasted period. Factors such as the increasing integration of probiotics in skin care products are expected to drive demand for the functional cosmetics market in the forecasted period. Further, increasing awareness and the desire for ageless beauty, male grooming, digitalization, and the use of natural and organic products are the major fueling factors of the cosmetics market in the forecasted period. Furthermore, the population increase, urbanization, and preference for grooming products are improving the demand for skin care products. This is expected to fuel the global functional cosmetics market for skin care applications during the forecasted period. However, the primary concern remains regarding cost, as organic cosmetics possess higher crude material or feedstock expenses and can only cater to the demand for a premium product range. Therefore, their further overhead costs restrain the growth of the global market.

Functional cosmetics and skin care ingredients are those substances that have multiple uses and are intended to enhance the look. Available cosmetics are used in numerous skin and hair care products, like facial and body creams, masks, shampoos, dyes, lotions, and other formulations, to enhance the final value of the products.

Functional cosmetics are special chemicals applied to cosmetics and skin care products to improve their functional properties. These include anti-aging agents, exfoliators, and conditioning agents, among others. There is a push towards sustainability and reducing compounds used in any cosmetic formulation. The desire for enhanced functionality and various benefits from a single product proliferates. For instance, BB (blemish balm) cream, promoted as a versatile product, claims to treat various skin-related problems like anti-aging, skin brightening, sun protection, etc. From CC, DD, and BB creams to post-shave moisturizers with sun protection against UVA and UVB rays, there is an enlarging demand for products that simultaneously target two or more concerns. Consumers are determined to go for skincare products with sun protection characteristics, as they are aware of the harmful effects of UV radiation. Innovative ingredients such as camellia flower extracts are gaining prominence in skincare products. Camellia japonica is being promoted for beauty and as an anti-aging natural ingredient. This flower is rich in antioxidants, which help deliver anti-aging effects in skincare products. Brands are increasing consumer awareness about safety data to prevent skin irritation, acute oral toxicity, and other adverse effects. Manufacturers are also increasing the production of camellia seed extracts for skincare products. With the increasing awareness among youth and millennials to keep their skin and hair in good condition, the demand for cosmetic products is increasing.

Asia-Pacific was the second-largest market for functional cosmetics. Asia-Pacific offers vast development opportunities for a different set of industries. The increasing population and their demands, accompanied by new technologies and product initiatives, are predicted to make this region a perfect destination for expanding the functional cosmetics market. Acceptance of functional cosmetics due to an increase in skin concerns as per the growing age of consumers is projected to drive the functional cosmetics market for skin care applications. These cosmetics are widely used for skin-related issues such as wrinkles, dark spots, stress aging, loss of firmness, and skin redness. Skin specialists and health experts also recommend functional cosmetics. The increase in usage of functional cosmetics by various age groups, such as 25–40 years and 40–50 years, due to the growth in skin issues caused by poor work-life balance has created lucrative opportunities for the functional cosmetics market for skin care applications. There are lots of hair care products on the market that are widely used. Some hair care products, such as shampoos, conditioners, and hair oils, help in hair growth, some may help reduce hair fall, and some other products, such as hair masks, help control the frizziness of hair. Beauty salons now recommend various hair care treatments such as hair spas, keratin treatments, cystine treatments, smoothening, and so on, causing this market to increase. Cosmetic products play an essential role in today's generation's lives, as people want to enhance the looks and texture of their faces. In addition, they want to look younger, so multiple anti-aging products are available on the market. Improved lifestyles, increasing costs of living, and an increasing population is helping industries such as soaps, detergents, personal care, and pharmaceuticals flourish in developing regions, thereby allowing the functional cosmetics industry to grow. An increase in male-specific cosmetic products and a growing population in the Asia-Pacific region are expected to boost the demand for skincare cosmetic products, thereby increasing the need for functional cosmetics used in these products.

The market's key players are Ashland Inc. , Stepan Company , BASF SE , Nouryon , and Clariant AG .

In April 2020, Nouryon inaugurated a natural polymer for sunscreen formulation. Therefore, SolAmaze Natural is appropriate with synthetic and organic sunscreen formulations.

In August 2021, Clariant AG captured 60–70% of the Brazilian personal care products specialty company Beraca and took over complete control.

The Global Functional Cosmetic Market report provides deep insight into the market's current and future state across various regions. The study examines the market in depth by functional cosmetics segmentation based on the Functionality (UV filters, conditioning agents, anti-aging agents, skin lightening agents), Applications (skin and hair care), and the Middle East and Africa. The report examines the market drivers and restraints and the impact of COVID-19 on market growth in detail. In addition, the research examines emerging market trends, developments, opportunities, and challenges in the industry. This report also covers extensively researched sections on the competitive landscape with prominent companies and profiles, including their market shares and projects.