Alibaba Group to reach 2 billion global consumers; Halloween spending on the rise; world's top three natural and organic beauty markets; and hair makeup – the latest K-Beauty trend.
Alibaba Group to reach 2 billion global consumers
Alibaba, China's largest e-commerce company, recently cemented its dominance through the acquisition of Kaola for US$2 billion. The game-changing move created the largest cross-border e-commerce platform in China. Founded by gaming giant NetEase four years ago, Kaola vigorously targets luxury shoppers in China, mainly sourcing high-end brands such as Gucci, Shiseido and Burberry directly from suppliers to on-sell to consumers.
Alibaba has announced a longterm global target of serving two billion consumers by 2036. Executive chairman and CEO, Daniel Zhang, also revealed that its operations, including Tmall Global, aims to support 10 million SMEs (small to mid-size businesses). Leading international and Australian beauty and fashion brands have been opening flagship stores on Tmall at a rapid pace over the past few years to gain access to a colossal 730 million active monthly users. A strategy that has contributed to roaring annual growth for key players such as Estée Lauder, which crossed the US$1billion sales milestone in Asia for the first time earlier this year.
Alibaba has another major goal of generating US$1.4 trillion in annual gross merchandise volume over the next five years. In another "Only in China” announcement, the Chinese e-commerce heavyweight also hopes to create 100 million jobs.
Halloween spending on the rise
Scott Lattimer, CEO of the Australian College of Make-Up & Special Effects (ACMUSE), says that Halloween has become like Christmas for the leading college. With one store in Sydney and two in Melbourne, he says that people are now willing to spend up to $2000 on Halloween makeup. A comment backed by The Party People, who are currently operating a 3000 square metre Halloween store at Westfield Knox Shopping Centre in Victoria, in collaboration with the Canadian company, Halloween Alley. The large-scale pop-up will run through to the big day and boasts 12,000 SKUs across makeup, costumes and home decor.
Leading retailers such as Woolworths and Kmart are also tapping into the booming market. Sydney is awash with Halloween events through October from harbour cruises to the Sydney Zombie Walk and Walloween in Darling Harbour. While the Art Gallery of South Australia is hosting Neo Deadly Halloween, a teen exclusive program for Gen Zers aged 13 to 17 on October 26.
In the US, Halloween spending is expected to reach US$8.8 billion this year, reveals a report from the National Retail Foundation (NRF). According to Scott Latimer, Aussie enthusiasts walk into ACMUSE stores to show staff Instagram images of the looks they want to achieve. It's the same in the US, where inspiration from social media has soared over the past four years. More than 35 per cent of respondents go online to search for Halloween merchandise, says the NRF, while 28 per cent head for bricks-and-mortar stores. Pets are increasingly getting in on the act in the US and the report estimates that 29 million Americans will dress up their "fur kids" for Halloween.
World's top three natural and organic beauty markets
Australia has always built its beauty reputation on natural products long before the A-Beauty label made its appearance. Stretching back to the early 1990s, leading players have been exporting to Europe, the US and Asia to take advantage of Australia's green and high-tech cred. Brands such as Jurlique, Sukin, Lanolips and Natio have built strong relationships with international retailers for delivering high quality products at reasonable prices.
The US is the world's largest market for natural and organic beauty and cosmetics with annual revenues of US$4.72 billion. Germany is number one in Europe and second in the world with sales of US$1.46 billion in 2018. France ranks second in Europe and third in the world with record sales of US828.25 million last year, reports Ecovia Intelligence (formerly Organic Monitor).
The UK-based specialist researcher reports that European sales of natural and organic cosmetics lifted 7.2 per cent in 2018 – twice the growth rate of the general beauty market. With European sales across the major markets reaching US$4.18 billion in 2018, Ecovia estimates sales will reach US$5.47 billion by 2023.
Hair makeup – the latest K-Beauty trend
The number of convenience claims in the hair colourant market has gone far beyond sprays to cover grey roots. L'Oréal Paris Magic Retouch Instant Root Concealer is the world's number one root concealer with three sold somewhere around the globe every minute. But there are plenty of new products vying to capture the crown.
South Korea is again a leader in the field, says Mintel Global New Products Database. In 2018, 65 per cent of new hair colourant launches included an ease-of-use claim – up from 28 per cent in 2016. The first cushion format in the hair category debuted last year, says the data tracker, and they have become popular for hair loss coverage, hairline correction and instant colour benefits. Popular products in the category include Jenny House's Hair-Fit Cover Cushion from Korea's top salon for celebrities and TV stars and Gini's Magic Hair Cover, which can also be used on brows.
Hairline correction is a major issue in South Korea, as it is worldwide for men and women. Toppik Hairline Optimizer has done very well in Australia and the US. South Korean companies are investing heavily in R&D to develop new products that stay put for hours, says Mintel. A market leader is Mamonde Pang Pang Hair Shadow from AmorePacific, South Korea's largest beauty company.
Snippets from the Wires
- Swisse is Australia's top vitamin brand and is celebrating its 50th anniversary this year. The company was bought by China-based H&H Group in 2015 for AUD$1.67 billion and has been expanding rapidly overseas. Swisse has launched its Australian clay mask range in the US on Amazon and other health and wellness e-commerce sites. The brand has also debuted a new Jelly supplement lineup developed especially for the American market. The three SKUs are: Focus Boost Jelly, Immune Support Jelly and Beauty Boost Jelly.
- A new 250 room hotel, including two restaurants and a wellness retreat and spa, will open at Chadstone Shopping Centre on November 1. Over 24 million people, including 500,000 international visitors, drop by Australia's largest shopping centre each year. Hotel Chadstone was built at a cost of AUD$130 million and will offer guests a luxury experience.
- In February 2018, P&G bought Kiwi natural skincare brand, Snowberry. Founded by leading cosmetician, Soraya Hendesi, the world-class brand was already available in the US and China as well as New Zealand. The anti-aging brand fits well into P&G's skincare portfolio headed by SK-II and Olay and the multinational has launched Snowberry into global travel retail, starting in Auckland as a world-first.
