JD Beauty buys curl expert Ouidad; Shiseido sets target of AUD$1.23 billion in global travel retail; Karen Murrell signs deal with Chinese online heavyweight JD Worldwide; and over 50 per cent of Australians abandon shopping carts.
JD Beauty buys curl expert Ouidad
Professional haircare brands have become hot targets for multinationals. Over the past four years, standout acquisitions have included Henkel's buyout of three US professional haircare brands, notably Alterna, for US$370 million. Late last year, Kao paid US$400 million for Oribe and L'Oréal recently expanded its salon stable to Pulp Riot. JD Beauty Group, majority-owned by private equity firm Topspin Partners, has bought Ouidad, famed as the curl expert.
It's the second major buyout for JD Beauty in the past 12 months. The US company is a leading manufacturer and owner of professional beauty brands and acquired Bio Ionic, the global specialist in hairdryers and straighteners, in September 2017. Ouidad was founded 30 years ago and has carved out a formidable reputation among America's top stylists for its advanced technology in curl enhancement. The brand is available in Sephora and via an extensive network of flagship and certified salons across the US. In Australia, Ouidad is sold through e-tailers such as 4mycurls.com.au, skincaredirect.com.au and fragrancesandcosmetics.com.au.
JD Beauty also owns WetBrush, Lure, TS-2 and Luxor Pro. According to CEO Jeffrey Davidson: "We are always striving to cement our position as an innovation leader in the professional beauty industry. Ouidad is an exciting brand with a passionate following similar to our current lines such as WetBrush and Bio Ionic".
Shiseido sets target of AUD$1.23 billion in global travel retail
Global travel retail continues to deliver spectacular results for the major beauty players. In early August, L'Oréal reported that its worldwide sales in travel retail jumped 27.3 per cent in the first six months of the year. By contrast to a 6.6 per cent increase in overall sales for the French giant.
Shiseido's global travel retail revenues rose 47 per cent over the same period to US$414.5 million. A figure only slightly less than the Japanese titan's retail sales in Europe, the Middle East and Africa (EMEA). Key brands such as Cle de Peau, Nars, Dolce & Gabbana, Laura Mercier and the core Shiseido brand all enjoyed significant growth. President and CEO, Masahiko Uotani, revealed that Shiseido is now targeting cross-border sales to exceed AUD$1.23 billion for the full financial year in global travel retail. Major growth drivers will include duty-free sales in Japan, a greater emphasis on China and more focus on airport downtown and in-flight.
Apart from travel retail, Shiseido's biggest sales upticks in major markets for the first half of 2018 were: Japan (+15%), China (+32%) and Asia/Pacific (+14%). The multinational's eight core brands brought in an extra US$605.7 million in sales and Mr Uotani noted that Shiseido has passed the one trillion yen (AUD$11.88 billion) annual sales goal of its Vision 2020 strategy more than two years ahead of schedule.
Karen Murrell signs deal with Chinese online heavyweight JD Worldwide
Global demand for natural and organic lipsticks is at an all-time high. Karen Murrell, the Kiwi beauty entrepreneur, has built her fashion-conscious vegan brand into one of Australasia's leading lip manufacturers over the past 10 years. In 2017, McPherson's became the Australian distributor for Karen Murrell lipsticks and the brand debuted in Priceline in November.
The daigous (Chinese overseas shoppers) were early fans of Karen Murrell lipsticks and China is now the biggest overseas market for the brand. Spectacular success with Vip.com, China's third largest online retailer, cemented the brand's popularity with Chinese beauty lovers. Karen Murrell has now signed a deal with JD Worldwide, which enjoyed a 187 per cent increase in lipstick sales in 2017.
JD.com is one of the Big Two online retailers in China behind Alibaba's Tmall. Karen Murrell will sell directly and operate its own flagship store and the two companies will partner on marketing and advertising initiatives. "With growing concern among Chinese consumers about the environmental impact of their purchases, Karen Murrell's proven commitment to sustainability makes them a perfect partner for us to meet this rising demand for green product", said JD Worldwide general manager Ye Yang.
Over 50 per cent of Australians abandon shopping carts
Most people have lost count of the times they have clicked "Remove" or just signed off after putting something in an online shopping cart. According to the SAP Consumer Propensity Study, 57 per cent of Australian consumers regularly abandon e-commerce shopping carts some or all of the time – one of the highest rates in the world. The reasons? Sixty per cent give an intended purchase the flick because of shipping costs and 46 per cent use online carts simply as a way to compare prices with other brands and websites.
Discounts and deals are major drivers for Australian online buyers – with 53 per cent of respondents revealing that the right price was a very strong motivation. Thirty two per cent said that multiple purchase deals were another sweetener and 31 per cent gave the thumbs up to retailers who responded quickly to queries on items.
Easy exchange and return policies were the most wanted attributes when it comes to buying online for 57 per cent of Australians in the survey. Interestingly, 42 per cent said they preferred to buy from retailers with a physical store where they could try and buy items.
Snippets from the Wires
- According to Rakuten Marketing, over 44 per cent of consumers worldwide are predicted to buy beauty products as Christmas gifts. The US company is the largest pay-for-performance affiliate marketing network on the Internet. Chinese consumers lead the way with 72 per cent most likely to buy beauty products as gifts, followed by the Brits (55%) and the French (47%). The sweet spot demographic is women aged 25 to 34.
- L'Oréal has partnered with A.S.Watson, the world's largest health and beauty retail group to open a network of fashion-forward beauty shops in China. Known as Colorlab, three stores have already opened in Shanghai and Guangzhou. Key L'Oréal brands such as Maybelline and L'Oréal Paris, A.S Watson own-brands, Kiss Me from Japan and CLIO from Korea will be the major drawcards and the longterm strategy is to launch 50 Colorlab stores in the mainland Chinese market.
- Fred Segal, the LA luxury retailer, has announced it will expand internationally with the opening of five new stores from September. Switzerland will host three outposts in Zurich and Bern and the remaining two will be in Asia-Taipei and Kuala Lumpur.
- Just as the Korean beauty industry took a dive over the THAAD missile dispute with China, the US cosmetics industry could suffer in the on-going tariff war between the US and Chinese governments. American lipsticks, fragrances and nail polishes will be slapped with an extra 25 per cent tariff. Hair brushes, face powders and hair removal creams will also be burdened with an extra 20 per cent tariff. The move follows the US imposing increased tariffs on a list of Chinese imports totalling US$200 billion.
