Coty chases Chinese beauty consumers with Alibaba deal; Vita Group launches National Cosmetic Medical Clinic Network; L'Oréal achieves highest quarterly growth in a decade; and Russian beauty market ranks 6th in the world.
Coty chases Chinese beauty consumers with Alibaba deal
Many of Coty's brands are already sold in Chinese beauty shops and on Tmall. While luxury fragrances from Gucci and Tiffany take pride of place in Chinese department stores. Yet 75 per cent of Coty's global revenues still come from North America and Europe. To ramp up sales and expansion in China, Coty has inked a deal with online titan Alibaba.
Highlights of the agreement include access to Alibaba's data on Chinese consumers and a roll-out of vending machines in shopping malls in major Chinese cities. Coty will also team with Alibaba's Tmall Innovation Center, the e-commerce giant's product design division, to develop new products tailored to the Chinese market. The Alibaba deal underpins our commitment to growth in China, adds Coty CEO, Camillo Pane.
Vita Group launches National Cosmetic Medical Clinic Network
Maxine Horne, CEO of the Vita Group, is Australia's wealthiest female executive. She co-founded Fone Zone in 1995 as a single phone retailer and since 2009 the company has operated as a master franchisor for Telstra's stores, posting annual revenues of $674.6 million. In October 2017, the Vita Group entered Australia's $1 billion a year medical aesthetics market with the purchase of the six-store Clear Complexions network for $9.5 million.
Last week, the company launched its first non-invasive medical aesthetic clinic under a new prestige banner – Artisan Aesthetic Clinics – in Brisbane's Racecourse road. A second location will open in early December – also in Brisbane. Over the next five years, an extensive network of Artisan clinics will open nationwide, offering cosmetic injectables, laser and light-based therapies, body contouring, skin tightening and dermal treatments.
Artisan Aesthetic Clinics will be supervised by a medical board helmed by Dr Linda Williams, who has worked in the global aesthetics industry for more than 17 years. Artisan services are not one-size-fits-all, says Maxine Horne. "Everyone is different and requires a tailored treatment plan to achieve the best result. In truly making our mark in the space and setting the standard for best practice, each of our clinics will be unique in their design and provide our clients with a truly luxe experience where they feel confident and empowered".
L'Oréal achieves highest quarterly growth in a decade
The Asia/Pacific region is on fire for L'Oréal. Sales rose 25.7 per cent in the third quarter of the multinational's fiscal year to push global revenues for the period to 6.47 billion euros (US$7.3 billion) – up 7.5 per cent on a like-for-like basis. Following acceleration in Q3, the highest quarterly growth in 10 years, L'Oréal's sales have shown strong growth for the first nine months of the year, said CEO and Chairman, Jean-Paul Agon.
The luxury division continued to kick major goals in the nine month period to September 30. Sales jumped 8.8 per cent to 6.715 billion euros (US$7.64 billion). Lancôme set new records thanks to the outstanding performance of the Génifique and Absolue franchises. YSL Beauté and Giorgio Armani posted double digit growth, notably in fragrance and foundation. Kiehl's, IT Cosmetics and Atelier Cologne were also acknowledged for major expansion.
The Active Cosmetics division (La Roche-Posay, SkinCeuticals, CeraVe etc) posted double digit growth, buoyed by the increased global demand for dermocosmetic skincare. Results for the consumer products division declined slightly to 8.99 billion euros (US$10.23 billion) for the first nine months of the year. But facial skincare revenues rose with standout performances from Garnier's micellar waters and the Pure Active range and the L'Oréal Revitalift franchise.
Russian beauty market ranks 6th in the world
I've interviewed two senior executives of Australian skincare brands recently and Russia was very top of mind for export sales. Russia has vaulted past Spain and Italy to become the fourth largest market in Europe behind Germany, France and the UK in sales value. In terms of per capita consumption, the vast nation now ranks 6th globally and accounts for 4 per cent of the total worldwide beauty market.
France is the champion when it comes to exporting cosmetics and fragrances to Russia, followed by Germany, Poland and South Korea. Miranda Kerr's KORA Organics brand, for example, entered 300 doors in Russia in July and August through L'Etoile, the largest network of perfume and beauty stores in Russia with over 850 stores nationwide. A smart move because over a third –31 per cent – of Russian prestige cosmetic and fragrance sales take place in specialist beauty stores.
A huge 99 per cent of Russian women surveyed say they buy beauty products regularly, says Anna Dycheva-Smirnova, managing director of Reed Exhibitions Russia, who organise InterCHARM, the leading international perfumery and cosmetics exhibition in Russia, the CIS and Eastern Europe. Close to 66 per cent of Russian women favour organic and natural personal care products. All key beauty categories have been in high single or double digit growth for the past five years: shampoo, eye and lip sectors (+15%), facial skincare (+8.4%), makeup (+7.4%), body care (+8.4%), fragrance (+5.8%) and suncare (+6.4%).
Snippets from the Wires
- With only a week to go before Singles' Day, Alibaba has announced it will be able to serve two billion global consumers by 2036. Over the past 12 months, the Chinese online colossus has increased full year revenues by 58 per cent and its already huge active user numbers have surged by a further 110 million.
- Sales of beauty devices slowed in Europe and flatlined in the US last year. But beauty device revenues soared 25 per cent in Asia during 2017, reports researcher Kline & Co. China and South Korea were the major hot spots of growth.
- French dermocosmetic pharmacy company, Laboratoires Expanscience, make the popular babycare brand Mustela, sold in Priceline, Chemist Warehouse, Amcal stores and more. Sixty-two per cent of the company's annual sales of AUD$427.5 million are international. To extend its presence in the US and globally, the company has bought Babo Botanicals, a US brand specialising in mineral and plant-based personal care products for babies, children and adults with sensitive skin.
