Sep 28: Elisabeth King reports on this week's business news

Nivea - Australia's number one skincare brand, Bellabox expands operations to China, the world's most expensive fragrance brand in private equity buyout, and America's largest beauty retailer spends big to take on Sephora.

Nivea - Australia's number one skincare brand
The Australian skincare market is more crowded than ever.  But once Australian women find a brand they like they stick to it says Andrew Price, general manager, Consumer Products, Roy Morgan Research. In a new report from the researcher, 76.6 per cent of Australian women buy facial care products and 68.3 per cent fork out for hand and body products in an average six month period. 

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It comes as little surprise that multinationals dominate when it comes to Australia's top five most favoured skincare brands. has the top ranking - just - with a 12.2 per cent market share, followed by Olay at 12.1 per cent, Neutrogena at 5.7 per cent, at 5.1 per cent and L'Oréal Paris at 4.9 per cent. 

Nivea also rules the roost in the hand/body sector with an 11.3 per cent market share, followed by Intensive Care at 9.1 per cent and and Aveeno Active Naturals sharing joint third ranking with 4.6 per cent each. 

Brand loyalty is alive and well says Roy Morgan Research. When Australian women buy a hand or body lotion they like from Nivea, they are 235 per cent more likely to choose the brand for face products. Direct sales customers are even more loyal, with happy Avon consumers 1000 per cent more likely to buy the brand's other offerings. 

Bellabox expands operations to China
Bellabox, Australia's leading beauty subscription service, will expand into China over the next few weeks The company's foray into Singapore earlier this year did not meet expectations but the company is taking a less risky approach in its attempt to enter the more lucrative Chinese market. The partnership with Australia Post's Tmall storefront will bypass a lot of red tape for Bellabox and leapfrog language and cultural barriers. Australia Post's Tmall store has been in operation for just over a year and Bellabox is the 36th Aussie brand to showcase its wares through China's online giant. 

Over the past four years, Bellabox has attracted 40,000 subscribers and works with more than 900 beauty brands. With an estimated turnover of $600,000 a year, the company hopes to move away from its founding subscription box model to become a major beauty e-commerce platform across Asia. To date, the company has raised $7.3 million in funding from investors such as Allure Media, Square Peg Ventures, Apex Capital Partners and Lance Kalish of Yes To fame. 

For the Chinese market, Bellabox will offer limited edition, customised beauty boxes. "We're excited to partner with Bellabox to launch this exclusive offer that ticks the boxes against China's growing consumer demand for authentic, quality, Australian-made beauty boxes" says Ben Franzi, GM global e-commerce platforms and marketplaces at Australia Post. 

World's most expensive fragrance brand in private equity buyout
When is a fragrance worth more than $250,000? When it uses only the most rare ingredeints and comes in a bottle boasting 24 carat gold latticework embedded with 2000 individually set diamonds. A huge price tag for only 30ml of Clive Christian No 1 Passant Guardant. But even without the extravagant bottle, Clive Christian fragrances easily fulfill their billing as - The World's Most Expensive Perfume. 

Clive Christian, long a famous name in British interiors, took over Crown Perfumery in the late 90s. The heritage brand was founded in 1872 and was the only company allowed to use the image of Queen Victoria's trademark tiny silver, diamond-encrusted crown. The aim was to resurrect British luxury perfumery and Christian released an Original Collection of six pure perfumes in a trio of his and hers pairs. Now sold in the Middle East, Europe and the US, the brand targets high net worth individuals by retailing only at upmarket stores such as Harrods. 

EME Investments, led by Scottish transport mogul Sir Brian Souter, EME Capital and Perscitus Advisers have bought a majority stake in Clive Christian. The founder is staying on as creative director but the brand's potential for growth is underscored by the appointment of Amy Nelson-Bennett as Group CEO. The savvy businesswoman was largely responsible for the global turnaround of Molton Brown, owned by Kao Corporation, during her time as global president and CEO from 2010 to 2014. The terms of the agreement were not disclosed. 

America's largest beauty retailer spends big to take on Sephora
Priceline did it the right way. The pharmacy chain grew into one of the Australia's biggest beauty retailers with a razzle-dazzle mix of smart pricing, community initiatives and memorable ad campaigns. Once heard, the Priceline pharmacy jingle is difficult to forget. 

In the US, Ulta has followed a similar expansive strategy for the past 25 years and by the end of this year will operate 900 stores across the US - twice as many as Sephora. According to Dave Kimbell, Chief Marketing officer at Ulta: "There are still a lot of women across the country who haven't heard of Ulta. Or, if they have, they don't really understand what we're all about". 

A situation that's about to change. For the financial year that ended January 31st, Ulta reaped sales of US$3.2 billion - double the company's revenues in 2010. In a bid to position itself in the public mind, as well as in reality, as a one-stop beauty destination for mass and prestige brands, Ulta is spending up big on TV ad campaigns. 

Targeting programs with a high number of viewers in the prized 18 to 39 bracket such as The Voice, Dancing With The Stars and Scandal, Ulta hopes to attract more shoppers away from department stores, mass retailers such as Target and Walmart and its biggest foreign competitor - LVMH-owned Sephora. Ulta isn't just chasing younger women, it's going after "beauty enthusiasts of all ages who take pride in a savvy mix of products" notes Kimbell. 

Snippets from the wires

  • Hermes has joined Dior and Chanel in opening its first dedicated beauty store. Located in New York's upscale Brookfield Mall, the 300 square metre space stocks only the luxury brand's fragrances and beauty products. 
  • Fragrance brands have their eyes firmly fixed on Iran. The country's cosmetic market boasts annual sales of US$1.5 billion and Iranian women buy more than 22 bottles of perfume a year reports  newsagency France 24. 
  • AmorePacific, Korea's largest cosmetics company, has been making all the running with announcements about its global expansion. LG Household & Healthcare, South Korea's number two cosmetics maker, is also revving into top gear. Following a 38 percent increase in profit in the second quarter, LG has announced it will invest US$321.7 million in a new factory south of Seoul to meet growing international demand for its 20 beauty brands, notably The FaceShop, which sells online in Australia and has stores in Sydney, Melbourne, Adelaide and Perth.
  • In yet another major purchase by a fragrance giant, Symrise has bought Pinova, the US fragrance ingredient company, for US$397 million. Germany-based Symrise has been a pioneer of plant-based ingredients in fragrances and flavours, instead of synthetics or petro-chemicals. This latest move intensifies the long-term trend. 
  • I attended the L'Oréal/ UNESCO Awards for Women in Science in Sydney recently, honouring female scientists working in Australia and New Zealand. For anyone who doubts that such gender-specific recognition is still needed, it's time for a reality check. According to the L'Oréal Foundation, 67 per cent of Europeans do not think that women possess the required capabilities to access high-level scientific positions and only 10 per cent believe that women possess any capability for science. Only 11 per cent of high-level scientific positions in the EU are held by women. The last word goes to Australian scientist Elizabeth Blackburn, who won the Nobel Prize in Physiology or Medicine in 2009 and one of the inaugural L'Oréeal/UNESCO Awards: "Having had to overcome prejudices myself throughout my career, it seems essential to me to participate in this fundamental movement in order to significantly push boundaries". 

Image: @bellaboxaus