Lactic acid is a versatile product that can be used as a preservative, exfoliant, moisturiser, and to add acidity to a formulation. It also adds to the skin's natural moisturising component. Lactic acid retains more water than glycerin. According to studies, it has shown to possibly increase the stratum corneum's water-retention capacity.

Between the concentrations of 5% to 12%, mild to moderate improvements on fine lines and softer, clearer skin can be observed. Its exfoliating properties can support the removal of excess pigment from the skin's surface, as well as enhancing skin texture and feel. 

Ref:
Sahle FF, Gebre-Mariam T, Dobner B, Wohlrab J, Neubert RH. Skin diseases associated with the depletion of stratum corneum lipids and stratum corneum lipid substitution therapy. Skin Pharmacol Physiol. 2015;28(1):42-55. doi: 10.1159/000360009. Epub 2014 Aug 29. PMID: 25196193.