Asia/Pacific - The beauty boom heats up; Myer tops David Jones in customer satisfaction ratings; Sephora announces opening date for third store in Victoria; and August retail figures cause concern as Christmas approaches.
Asia/Pacific - The beauty boom heats up
No industry likes to be dependent on a single market. China remains a strong focus for many multinationals, but industry leaders such as Unilever, Shiseido and AmorePacific are increasingly pushing harder into Southeast Asia. No wonder. According to Euromonitor, the skincare and cosmetics market across Indonesia, Singapore, Malaysia, Thailand and Vietnam is expected to reach $US9.6 billion by 2020.
South Korean giant AmorePacific, conscious of its over-dependence on China, is looking to triple exports to Southeast Asia to $US400 million over the next three years. The multinational's five "Champion" brands – Laneige, Innisfree, Etude House, Sulwhasoo and Mamonde – will spearhead the expansion. AmorePacific currently operates 250 directly managed stores in the region and plans to open another 150 to reach its revenue goal by 2020. A very achievable aim considering it only took the company five years – from 2011 to 2016 – to double its market share in the Asia/Pacific region (APAC) to overtake the Estée Lauder Companies, says Euromonitor.
APAC, already the world's largest regional skincare market, is also on track to reach another beauty milestone. Euromonitor predicts the region will overtake the US as the world's number one regional colour cosmetics market by 2020. Japan is the number one makeup market with sales expected to reach $US6.8 billion by the end of the year. China claims the number two spot with revenues of $US3.8 billion, followed by South Korea at $US2.05 billion. Sales are escalating rapidly in India and should increase by more than 20 per cent by 2020, a rise matched by major gains in Indonesia, Thailand, the Philippines and Vietnam.
Myer tops David Jones in customer satisfaction ratings
In spite of its other woes, Myer has seen the biggest improvement in customer satisfaction in the department store category over the past 12 months, says Roy Morgan. The researcher's latest Department Stores Satisfaction Report for August revealed that Myer had increased its satisfaction rating by 2.4% points compared to the same period last year, while David Jones had experienced a decline of 1.5% points. In 2016, David Jones had the slight edge with a satisfaction rating of 86.6 per cent to Myer's 86.2 per cent. But Myer now leads with 88.6 per cent, in contrast to David Jones at 85.1 per cent.
Crucially, though, age matters. Myer leads among younger shoppers. Millennials, aged 27 to 41 years, account for 23.3 per cent of department store shoppers and Myer enjoys a satisfaction rating among the demographic of 88.6 per cent, compared to 83.7 per cent at David Jones. Gen X, aged 42 to 56 years, are the biggest demo of department store shoppers – 26.5 per cent of the total. Myer again scores high with a 91 per cent satisfaction rating, ahead of David Jones at 86.5 per cent. The only demographic where David Jones is ahead is with Pre-Boomers, aged 71-plus, who only account for 9.9 per cent of department store shoppers. Scoring an 89.7 per cent satisfaction rating, by contrast to Myer's 87.6 per cent.
With department stores facing increasing competition from specialist retailers and now online players such as Amazon, it is important to keep track of how customers are rating their current retailers, says Norman Morris, Industry Communications Director, Roy Morgan Research. "Although we have seen some considerable overall gains in satisfaction over the past year, this is likely to move at an even faster pace as the industry faces very rapid change even in the short term".
Sephora announces opening date for third store in Victoria
It's easy to forget that it's only been three years since Sephora opened its first Australian store. Late last week, the world's largest specialist beauty chain opened its doors at Erina Fair on NSW's Central Coast with key influencer Chloe Brinklow of TOMBOY Beauty in attendance. Its seventh store in NSW and 12th Australian location.
Over the past few months media have been invited to a series of events showcasing Sephora's exclusive international brands, including Marc Jacobs Beauty, Kat Von D and Rihanna's much-publicised roll-out of Fenty Beauty. Within a day of the Erina Fair opening Sephora announced that its next store opening at Highpoint Shopping Centre in Melbourne is slated for November. Located in the city's fast-growing western suburbs, Highpoint is the fourth largest shopping centre in Australia and the new Sephora store will be the third opening in Victoria after Melbourne Central and Chadstone.
The demand for more Melbourne stores has been considerable and we want to be able to meet the expectations of our local beauty aficionados, says Libby Amelia, Sephora Country Manager. "Highpoint Shopping Centre is great for us and we're looking forward to launching there next month. We have super exciting activities planned for launch day to welcome Melbourne's inner western beauties to the wonderful world of Sephora".
August retail figures cause concern as Christmas approaches
The latest August retail figures from the Australian Bureau of Statistics have sparked concern in the run-up to Christmas. Growth was lower than expected over the last month of winter at 2.13 per cent across all categories. The Other Retailing sector, including gambling and online goods and services, experienced a strong uplift, said Russell Zimmerman, Executive Director of the Australian Retailers Association (ARA), but broader retail categories suffered significantly.
Australians are even shying away from takeaway food, which experienced the first negative figures in over 15 months. Although department stores (down 1.35%), newspapers and books (down 3.84%) and hardware and building (down 0.47%) also suffered negative growth, the drop in takeaway food is concerning for the retail industry as a whole, notes Zimmerman.
On the bright side, all states showed overall retail growth even if figures were lower than expected. Victoria led the pack (+ 3.4%),followed by NSW (+ 2.91%), Tasmania (+ 1.92%), the NT (+ 1.71%), the ACT (+1.69%), South Australia (+`1.36%), WA (+ 0.81%) and Queensland (+ 0.37%).
The ARA remains optimistic, though. "As we lead into Spring racing and the beginning of the Christmas season we expect to see a pickup in both food retailing and clothing, footwear and accessories", said Zimmerman.
Snippets from the wires
- Elizabeth Arden has teamed with Becky (a.k.a Li Be Ka), one of China's leading fashion and beauty bloggers, to reach out to big spending Chinese travellers. The star influencer has created a limited edition set of travel essentials now available through four major Chinese duty free operators – China Duty Free Group, Sunrise Duty Free, CNSC and Zhuhai Duty Free. From November to February, the Becky-backed selection will be available for in-flight purchase on China Southern Airlines, Air China and Hainan Airways.
- David Boynton has been appointed as the new CEO of The Body Shop, commencing the role on December 4th. The experienced Brit is currently the CEO of UK men's fashion brand Charles Tyrwhitt, but it was short-lived appointment dating from February this year. Boynton is a cosmetics industry veteran and was the former head of L'Occitane's US operations. New owner Natura said it was very important for The Body Shop to have a British CEO to reinforce its British identity. A major disconnect when the company was owned by L'Oréal.
- Amazon has been in talks with major supermarkets and retailers in France, reports leading French newspaper Le Monde. Rumours are also swirling that the e-commerce giant is considering making an offer for leading supermarket chain Carrefour. The hypermarket chain operates in 30 countries and enjoyed revenues of $AU155.86 billion from its 1462 location in 2016. Carrefour has been struggling lately and is a major beauty retailer in all the markets in which it operates. In 2012, the chain launched its own 650 SKU private label beauty and skincare range – Les Cosmetiques Design Paris – created by Alliance Boots before its merger with Walgreens.
