Johnson & Johnson takes ownership of Japanese skincare firm for US$2.1 billion; Australian online health and beauty sales post 37 per cent growth; Alibaba predicts another record-breaking Singles' Day; and Immortelle Reset boosts L'Occitane's half year results.
Johnson & Johnson takes ownership of Japanese skincare firm for US$2.1 billion
Major Western multinationals have been snapping up Asian beauty and skincare companies over the past 18 months. Last year, the biggest buy of Unilever's well-publicised corporate spending spree was the US$2.7 billion acquisition of Carver Korea. In May, L'Oréal bought Nanda, the South Korean makeup and fashion company.
Johnson & Johnson was already the second largest stakeholder – 19 per cent – in Japanese dermocosmetic company, Ci:z Holdings. The multinational has agreed to acquire the remaining shares in the business in a US$2.1 billion all-cash deal. Dr Ci: Labo, Japan's top medical cosmetic brand, will enter the J&J stable and the company will also access Ci:z's groundbreaking R&D and innovation pipeline.
This transaction will maximise value creation by bringing in an agile innovation model and rapidly accelerating sales through our global commercialisation expertise, says Jorge Mesquita, worldwide chairman at Johnson & Johnson's consumer division. “Health and beauty consumers are actively seeking science-based innovation to improve their skin".
Australian online health and beauty sales post 37 per cent growth
Sifting through billions of dollars of online sales from over 3000 merchants and retail partners including Google, PayPal and eBay, e-commerce management platform Neto has crunched the stats on Australia's online shopping habits.
According to its 2018 State of eCommerce Report, the health and beauty category posted strong sales growth of 37 per cent year-on-year and the average basket size grew 5 per cent to $113. How did Australians pay to look and feel good? Credit card was the most popular payment method at 56 per cent, followed by PayPal at 38 per cent and buy now, pay later services such as Afterpay and zipPay at 18 per cent.
Fashion topped the rankings for sales growth – up 57 per cent – followed by homewares at 55 per cent. But Aussie consumers forked out the most money online for food and alcohol. A third of total online sales value was attributed to major marketplaces such as eBay, Amazon and Catch.
Other major categories which enjoyed rapid sales growth in fiscal 2018 were: motor parts (+49%), pets and animals (+35%), gifting (+23%), electronics and hi-fi (+22%) and toys and hobbies (+21%). Interestingly, for all the buzz about internal beauty, online sales of supplements and nutrition fell 26 per by contrast to the previous year, reports Neto.
Alibaba predicts another record-breaking Singles' Day
When Chinese e-commerce titan, Alibaba, launched Singles' Day in 2009, the event hardly raised a headline outside China. Last year, what is now the world's largest retail extravaganza held each year on November 11th, pulled in US$25.3 billion (AUD$33 billion) in gross merchandise value. Frequently compared to Black Friday in the US and popularly known in global retail circles as 11.11, Alibaba predicts that the 10th anniversary of the global shopping phenomenon will post another record-breaking result.
Beauty products are in the top five most popular categories, alongside apparel/fashion, fast moving consumer goods, automotive and home decor. Australia is a key player and has moved from being the fifth-ranked international retailer in 2015 to a number three ranking last year, behind the US and Japan. Australians are also keen shoppers on the big day, ranking fifth in cross-border consumer numbers, after Russia, Hong Kong, the US and Taiwan.
Daniel Zhang, Alibaba Group CEO, says Singles' Day showcases the meteoric rise of quality consumption by Chinese consumers and how the online heavyweight has expanded beyond e-commerce. Alibaba's "new retail" strategy, including online and offline retail experiences, will help this year's event to become the largest ever in terms of sales, he says. Tmall offered 500,000 items for pre-order in mid-October and 180,000 international and Chinese brands will participate. To swell the millions logging on, consumers from Singapore, Malaysia, Thailand, Indonesia, the Phillipines and Vietnam will join the frenzy for the first time this year.
Immortelle Reset boosts L'Occitane's half year results
Immortelle Overnight Reset Serum, L'Occitane's new overnight anti-ageing serum, was introduced to Australian beauty media a few weeks ago. According to Reinold Geiger, Chairman and CEO of L'Occitane, the new wonderworker has swiftly become one of the prestige brand's bestsellers. "It demonstrates the effectiveness of our hero product strategy, which aims to boost recruitment, brand awareness and our face care range. It was also an important contributor to the broad-based improvement in many key markets".
Buoyed by the jump start performance of Immortelle Reset, L’Occitane's global net sales for the six month period to September 30 surged 12.4 per cent to 595.4 million euros (AUD$957.8 million). Sales in the US spiked 65.8 per cent, mainly driven by the recently acquired stake in the LimeLight by Alcone cosmetic company and the core L'Occitane brand. The travel retail sector in Hong Kong fuelled a sales increase of 14.3 per cent. While the partnership with Chinese online giant JD.com and the use of local brand ambassadors led to a sales spurt of 13 per cent in China.
Snippets from the Wires
- With Chinese consumers on track to account for close to 50 per cent of the global luxury market by 2025, Richemont, the world's second biggest luxury goods group after LVMH, is partnering with Alibaba. Richemont owns Net-A-Porter and Mr Porter, which will open online stores and create apps on Alibaba's Tmall luxury platform. Many luxury brands have been wary of entering the huge marketplace, but this move by such a leading player as Richemont, who also own Cartier, Dunhill, Piaget, Chloe, Lancel and a host of other big names is a gamechanger.
- Inter Parfums, the licensee for Jimmy Choo, Coach, Montblanc and Lanvin fragrances, has reported a net sales increase of 4.5 per cent for the three months to September 30 to US$177.2 million. Sales in the crucial US market grew 13 per cent, driven by the lifestyle fragrances of Guess, Abercrombie & Fitch and Hollister.
- Molton Brown, the English brand owned by Japan's Kao Corporation, has announced that 2019 will be the year it becomes "a serious fragrance house". A new collection of high-end eau de parfums, including Suede Orris and Geranium Nefertem and featuring the tagline "Made in England", will tilt at the top end of fragrance market.
Image courtesy of: @oliviajeanette_
