Walgreens Boots Alliance launches major global offensive in affordable skincare; Korean giant LG enters the beauty device market; Chiara Ferragni to open 35 shops in China; and Anti-pollution skincare and makeup remains a hard sell.
Walgreens Boots Alliance launches major global offensive in affordable skincare
Unilever recently bought Carver Korea mainly to expand its presence in China. The multinational has failed to make headway in the all-important Chinese market after 30 years because of fierce competition from local brands and has experienced double digit sales drops in several recent quarters. Unilever also faces intense pressure from other Western multinationals and Walgreens Boots Alliance, the first global pharmacy-led, health and well-being conglomerate, is shaping up as formidable contender.
The Boots brand has built up a strong reputation for skincare that works over the past decade. Queues formed at 5am in the morning in the UK in May 2007 when a BBC program revealed that Boots No7 Protect & Perfect Serum produced better results than pricier products and the hysteria went global. The British Advertising Standards Authority even allowed the marketing claim: "The first UK serum clinically proven to deliver anti-wrinkle results that get better over time". Since the merger of US drugstore colossus Walgreens and Europe-based Boots Alliance in 2014, the combined company has become the largest retail pharmacy, health and daily living destination in both the US and Europe.
Walgreens Boots Alliance has launched its first new global skincare franchise since Botanics in the late 1990s. Aimed at Millennials, the Your Good Skin range rolled out in 1300 stores in the UK last week and will debut across the Walgreens network in the US on October 14th. In May, Boots opened its first franchise store in South Korea and the new range will be released in the Asia/Pacific region, the Middle East and other European countries over the next year. Walgreens Boots Alliance has also indicated that the company is open to similar distribution deals it offers for the No7 and Botanics ranges.
Like all Boots skincare products, Your Good Skin has been tested by thousands of women and undergone 20 efficacy trials and three clinical trials. The range deals with skincare concerns – hydration, oiliness and blemishes – rather than anti-ageing. Claiming to deliver healthier skin in 28 days, there is a dedicated website to track your progress – yourgoodskin.com.
Three years in development, affordability is also a major selling point with prices ranging from $AU7.60 for the Soothing Lip Balm to $AU29 for the hero product, Balancing Skin Concentrate. Particularly worrying for other multinationals is that the main active is Japanese lilyturf, botanically known as Ophiopogon japonicus, traditionally used in Chinese medicine for centuries to treat inflammation and infection.
Korean giant LG enters the beauty device market
The global market for personal beauty devices continues to skyrocket. Persistence Market Research estimates that worldwide sales will jump to $US54.2 billion by 2020. The leading players in the sector are Nu Skin, Panasonic, P&G, Philips and L’Oréal with Clarisonic. Few other multinationals are better placed to grab market share than Korean giant LG.
In Australia, LG is mainly known for consumer electronics, home and kitchen appliances. But the multinational's personal and home care arm, LG Household & Healthcare, is the second largest cosmetics player in Korea after AmorePacific. The division owns The Face Shop and has annual revenues of $US4.1 billion a year.
It's hard to believe that LG hasn't combined its two main areas of expertise – electronics and beauty – before, but the moment has finally arrived. Four new personal beauty devices have been released under the brand name Pra.L. The quartet is skewed towards the best-selling categories of at-home devices – a Dual Action Cleanser similar to Clarisonic, the Total Lift-Up to lift facial contours with micro-currents, the Galvanic Ion Booster which uses micro-currents to boost penetration of skincare products, and the Derma-LED Mask based on infra-red light to tone and firm.
Chiara Ferragni to open 35 shops in China
Chiara Ferragni has achieved the dream of every influencer. The ex-law student from Milan started her blog, The Blonde Salad, in 2009 and her business ventures pulled in $US20 million in 2016. Last week, the 30 year old landed the number one ranking on Forbes 2017 Top Influencers list in the fashion category.
With more than 10.3 million Instagram followers, Ferragni continues to showcase her enviable lifestyle and fashion sense, but the real moolah comes from the Chiara Ferragni Collection, a shoe brand noted for flats and boots tagged with her emoji-style winking eye logo.
In July, Ferragni opened her first bricks-and-mortar store in Milan, followed by two others in Shanghai and Chengdu. She has inked a deal with the Riqing Group for a mass rollout of 35 stores across China over the next two years. The Chiara Ferragni Collection is stocked in more than 350 stores worldwide and featured pop-ups and selected styles in tentpole retailers such as Saks Fifth Avenue in the US and Le Bon Marche in Paris. In addition to the Chinese deal, Ferragni also has plans for the US market, notably the twin lifestyle hubs of New York and Los Angeles.
Anti-pollution skinecare and makeup remains a hard sell
Skincare and makeup products which ward off the damaging effects of pollution have been heavily promoted over the past two years. Yet even in the Asia/Pacific region uptake has been slow. The category is facing an even harder struggle to gain a foothold elsewhere, in spite of widespread acceptance in the US and Europe that pollution is a growing problem for general health and the skin.
Many beauty companies from Elizabeth Arden to Unilever-owned REN have shifted into urban protection mode. But according to the Mintel Global New Products Database, the number of global anti-pollution beauty and personal care releases fell from 1.3 per cent of new launches in 2015 to 1.2 per cent in the first half of this year. The category edged up slightly over the same period in the Asia/Pacific region – from 1.2 per cent to 1.7 per cent – and in the US – from 1.3 per cent to 1.4 per cent.
There are two major credibility gaps with consumers in the fledgling category, says Mintel. Many consumers believe that cosmetic companies are trying to profit from what is a scary environmental problem. While others think there is a lack of scientific data to support claims. On the bright side, says Mintel, there is a willingness to learn more about how to protect the skin from pollution, but brands have to invest more in clinical studies and data.
Snippets from the wires
- The heavyweight German supermarket chains, Aldi and Lidl, have enjoyed huge success with their own-brand makeup and skincare ranges. Asda, the British discount supermarket chain, is launching a 156 SKU lineup this week, including contour kits and palettes, with all the products priced below $AU10.
- In March, Sephora debuted two hyper-connected pilot stores aimed at Millennials in France. The world's largest specialist beauty chain has now extended the fun concept to Spain. The new concept stores feature four experiences which showcase the latest releases from Korea, the Dry Bar for hair re-styling and a customised fragrance counter which allows consumers to DIY an exclusive scent.
- Harvey Nichols, the luxury British department store, will open a new outpost in Doha early next year. An exclusive edit of fashion, homeware and beauty brands will entice stylistas to Doha Festival City, on track to become Qatar's largest shopping mall.
