Colgate-Palmolive enters premium global skincare market; Shiseido acquires ground-breaking technology start-up; South Korean cosmetics industry gears up for Winter Olympics bonanza; and fast fashion forward – the year starts well for Uniqlo and Boohoo.com.
Colgate-Palmolive enters premium global skincare market
Multinationals are rushing to extend their reach into the fast-growing professional and dermo-cosmetic skincare markets. Unilever acquired Dermalogica, Murad and Kate Somerville in 2015. L'Oréal is gearing up to take SkinCeuticals truly global this year, even though it has owned the US-based brand since 2005.
Colgate-Palmolive, which ranks as number four in the global personal care market after the Big Three – P&G, Unilever and L'Oréal – has decided to push its higher profit margin strategy beyond oral care into professional skincare. The company reported revenues of $US15.2 billion in 2017 and has acquired two of the fastest-growing US professional and medical grade skincare brands – PCA Skin and EltaMD. Both brands are distributed in the US, China and selected international markets and enjoyed combined sales of $US100 million in 2017.
PCA Skin and EltaMD form an exciting springboard for Colgate's entry into the professional skincare category, notes Ian Cook, Chairman, President and CEO of Colgate-Palmolive. "Their complementary product portfolios and sales forces, strong professional support and similar distribution channels will advance Colgate's presence in the premium global skincare categories". Terms of the deal were undisclosed.
Shiseido acquires ground-breaking technology start-up
So-called "starter formulas" have become major drivers of innovation in global skincare. That's why major players such as Estée Lauder and L'Oréal are snapping up cutting edge companies such as DECIEM and Magic Holdings. Shiseido's Vision 2020 growth strategy also hinges on accessing new technologies and breakthroughs. The Japanese giant has acquired US pharma company, Olivo Laboratories, principally for its synthetic skin technology.
Dubbed XPL, the "second skin" technology creates a breathable, flexible and invisible artificial film on the skin which can be used in under-eye treatments, sunscreens and more. Masahiko Otani, President and CEO of Shiseido, reveals that the Olivo Laboratories buyout will allow the company to create entirely new categories of beauty products on a global scale. Skincare that offers instant results on application to produce what's known in Asia as "glass skin"– clear, poreless, translucent and luminous – is also very much top-of-mind. .
Founded by four award-winning scientists – Dr Robert Langer, David Koch, Professor at Massachusetts Institute of Technology (MIT), Dr Rox Anderson and Dr Dan Anderson, Professor of Chemical Engineering at MIT – Olivo Labs will boost Shiseido's own robust innovation portfolio. A ground-breaking step forward which will offer a range of benefits previously unachievable through current cosmetics and skincare and cosmetic surgery, says Shiseido.
South Korean cosmetics industry gears up for Winter Olympics bonanza
Seoul's Incheon International claimed top spot as the world's most lucrative travel retail airport in 2017 with duty-free sales surging 4.1 per cent to $US2.1 billion. Dubai Duty Free was the runner-up with record sales of $US1.93 billion for the year. The major difference between the leaders of the pack is that Incheon's top-selling category is perfume and cosmetics, in contrast to liquor sales in the Middle East's largest gateway.
Incheon is expecting further growth in 2018, boosted by reconciliation feelers with North Korea, the end of the THAAD crisis with China and the Winter Olympics in February, says Bum-Ho Kim, deputy executive director. Sales of perfumes and cosmetics reached $US774 million in 2017, accounting for 38 per cent of total duty-free sales
His confidence is well-placed with the opening of the airport's Terminal 2 this week. Over 110 beauty brands, including Chanel, Dior, Lancôme, Estée Lauder, SK-II and Sulwhasoo, have all ponied up big bucks to create maximum impact. The highlight will be the Digital Beauty Bar including seven interactive experience zones offering virtual makeup services, cutting-edge displays, skin type analysis and much, much more.
Fast fashion forward – The year starts well for Uniqlo and Boohoo.com
Uniqlo launched its first Australian outpost in 2014 and has expanded rapidly over the past three years. The fast fashion retailer has announced it will open its 15th Australian store in Murray Street Mall in Perth, its first in WA, in time for its Autumn/Winter collection. International news is good too, with parent company Fast Retailing posting a record Q1 profit of $US1.02 billion.
Already Asia's biggest apparel retailer, Uniqlo's owner Tadashi Yanai wants to overtake H&M and Zara as the world number one in the fast fashion space. China is key to achieving the goal and Uniqlo plans to increase its network of Chinese stores to 1000 by 2021 – up from the current tally of 600 shops.
Boohoo.com's share price has had a meteoric rise over the past two years, increasing by 460 per cent. The UK-based company, whose stable includes Nasty Gal and PrettyLittleThing (PLT), saw revenues climb to $US307.8 million in the four months to December. A period which covered the much-publicised PLT collaboration with Kourtney Kardashian. Hyped by the outstanding result, Boohoo has upped its full-year forecast for the third time this fiscal year and expects group revenue to have grown 90 per cent for the 12 months to February 2018.
Snippets from the wires
- Last May, L'Occitane acquired 40 per cent of LimeLight by Alcone, a US natural skincare and makeup brand with a decades-long heritage. The French prestige company has increased its stake to 60.48 per cent. As the majority stakeholder, L'Occitane is now on track to develop a distribution model outside the US and leverage LimeLight as a global brand over the next three years.
- The beauty-from-within market is undergoing a boom at the moment. Nestlé recently bought the Canadian supplements maker Atrium for US$2.3 billion and Burt's Bees has also entered the sector. Avon has launched the Espira brand in the US. There are 11 products divided into three collections – Restore, Boost and Glow – to help achieve a healthy internal balance revitalise the body and target hair, skin and nail health.
- According to Nielsen research, 17 per cent of Australians belong to the demographic known as the "healthy elite". Seventy five per cent follow a low-fat diet, 58 per cent buy organic whenever they can and 38 per cent prefer a vegetarian or vegan diet.
Image: Kourtney Kardashian for PrettyLittleThings.
