Colgate-Palmolive acquires French skincare brand for US$1.69 billion; Global beauty drinks market to hit US$4.4 billion; Unisex launches power global fragrance market; and Indian beauty market on track to reach US$20 billion.
Colgate-Palmolive acquires French skincare brand for US$1.69 billion
Colgate is welded to oral care in most people's minds. But the multinational has been expanding its footprint in high-margin skincare since 2017 when it acquired the PCA Skin and EltaMD brands. The Asia/Pacific region and travel retail are two of the fastest-growing markets for skincare. Colgate-Palmolive is poised to target both with the acquisition of French prestige skincare brand, Laboratoires Filorga Cosmetiques, for US$1.69 billion.
Founded in 1978 by Michel Tordjman, a French dermatologist and aesthetician, the company originally specialised in injectables and fillers. In 2007, the first skincare lineup was released and there are now 50 SKUs across its leading ranges. Filorga's point-of-difference is cellular biology and its products are sold in 70 countries, including online in Australia. The brand's four major markets are France, Italy, Spain and China. Penetration has also been notable in Asian markets catering to Chinese travellers, led by South Korea.
Groupe HLD, an investment company founded by three French entrepreneurs in 2010, is the current owner of Filorga. The company bought the French haircare brand Lazartigue last year and finalised the acquisition of Le Couvent des Minimes, the heritage fragrance and body care brand, from L'Occitane in April this year. Groupe HLD also owns the dermo-cosmetic brand, SVR Laboratoire Dermatologique, which is sold in Australia and more than 40 other countries worldwide.
Global beauty drinks market to hit US$4.4 billion
Beauty from within has become a runaway trend and even discount supermarkets like Aldi now offer supplements and powders to promote better skin, health and sleep. Pharmacies are also crammed with gummies, capsules, powders and liquids promising to add radiance to the skin and turn back the clock on ageing. But a new report from Research and Markets reveals that there is a growing preference for beauty drinks over other delivery formats.
According to the world's largest market research resource, the global beauty drinks market is predicted to reach US$4.4 billion by 2024. Collagen dominates the category worldwide. The Asia/Pacific region is the largest regional market for collagen-based drinks and North America - the US and Canada - is also growing fast. The popularity of beauty drinks is firmly tied to the strong trends of preventative skincare and anti-ageing in all major regional markets as the concept of beauty shifts more to maintaining a healthy lifestyle among women of all ages, notes the researcher.
Unisex launches power global fragrance market
The next three years should see fragrance sales hike up a notch. Euromonitor International forecasts that worldwide sales will increase 3.1 per cent to US$52.5 billion by the end of the year. But UK scent subscription service, Sniph, calculates that the 14 per cent growth enjoyed by niche and artisanal scents in 2018 will drive the global fragrance market to US$70 billion by 2022.
Unisex and gender-neutral showed some of the strongest growth last year, says Euromonitor, with revenues up 7.5 per cent to US$2.4 billion. This is a far cry from 2010 when only 17 per cent of new launches were unisex. Over the past 12 months, major brands have moved into the category - Chanel with Les Eaux de Chanel, Louis Vuitton with Sun Song and Gucci with Memoire d'une Odeur.
Two major forces are at work. Firstly, many Millennials and Gen Zers in Western countries are showing a wider preference for gender-neutral juices as part of their overall view on life. But the major impetus is coming from China. According to Jing Daily, there are 175 million Chinese Gen Zers and they are showing a greater willingness to use fragrance than their Millennial counterparts. They also love lighter fragrances with brands such as Jo Malone London, Diptyque and L'Oréal-owned Atelier - all known for their unisex fragrances - enjoying major success.
Indian beauty market on track to reach US$20 billion
India has long been the prospective sleeping giant of the global beauty industry. The road map is obvious. A population that almost matches China - 1.35 billion by contrast to 1.42 billion - coupled with a high standard of beauty, intense interest in beauty products and rising incomes.
Yet even though the potential is there, the Indian beauty market was only valued at US$6.7 billion in 2017. As in China, a number of trends has spurred galloping growth and the Indian beauty market is expected to reach US$20 billion by 2025, says Mintel.
Rising spending power, social media platforms like Instagram and increased Internet connectivity are the three main pillars propelling growth. Nykaa.com, for example, dubbed the Sephora of India, has seen sales double over the past year from US$83.18 million to US$166.36 million. The company offers over 1000 brands - many imported - online and through bricks-and-mortar stores and is committed to building a network of 200 retail outlets over the next four to five years.
Jio, a mobile carrier service, launched in late 2016 has caused Internet penetration to surge by offering free calls and unlimited data for only AUD$2.80 per month. Similar to developments in China, Tier II and III cities have become major profit centres for beauty and personal care brands.
The global trend to increased diversity in beauty is also expected to have a major impact on the Indian cosmetic market. Traditionally, Indian beauty brands have not offered a wide range of shades for darker skin tones. But price-sensitivity is more of an issue than it is in the wealthier areas of China, so brands will have to meet market expectations rather than just release prestige products.
Snippets from the Wires
- Back in 2017 Conde Nast shuttered its e-commerce website - Style.com. The international publisher of Vogue invested in Farfetch, the UK-based luxury fashion retail platform which also operates in Australia. Last year, revenues at Farfetch surged 56 per cent to UD$592 million but losses totalled US$152 million. Conde Nast has sold its 6 per cent investment in the company, citing increased marketing expenditure.
- Estée Lauder has clinched the number one ranking in Forbes 2019 list of Best Employers for Women. A spectacular rise from 22nd spot in 2018. Other major beauty and personal care multinationals on the 300-strong list are: Ulta Beauty (No. 2), Unilever (No.6), Sephora ( No.20), Revlon (No.70), Johnson & Johnson (No.104) and L'Oréal (No.161).
- Sales to daigous - Chinese surrogate shoppers- have become big business in Australia, South Korea and Japan. Late last year the Chinese government introduced regulations to tax daigou sales and required them to register their websites with the authorities. According to a report by the Nikkei Asian Review, Japanese retailers and brands have experienced a major drop in sales of beauty and personal care products in the first half of the year. Shiseido has seen sales slump 15 per cent and store sales have dived 20 per cent in spite of a rise in visitor numbers from Asia.
