Australians to spend $2 billion on Mother's Day, the boom continues for Australian luxury market, Johnson & Johnson acquires NeoStrata, and global cosmetic brands rule the roost says Nielsen.
Australians to spend $2 billion on Mother's Day
No wonder beauty eds have been inundated with gift suggestions for Mother's Day. The annual lovefest remains Australia's second biggest spending occasion after Christmas, says the Australian Retailers Association (ARA). According to Russell Zimmermann, ARA Executive Director: "With an election looming and consumer confidence traditionally declining in the lead-up to elections, retailers will be using Mother's Day as an opportunity to increase sales by offering tailored gifts, packages or products that may appeal to mums".
The big ticket item will be dining out and the ARA estimates a final bill of $300 million. Restaurants and cafes won't be the only venues for the celebrations. "The traditional Sunday roast at home will also lead to an increase in grocery purchases associated with home entertaining", notes Zimmermann.
Flowers still rate very highly as tokens of thanks to "the most important woman in the world." Florists can expect to ring up $200 million in sales this year. The other major categories likely to experience a spike in revenues for Mother's Day include jewellery, fashion, spa gift cards, chocolates and confectionery, adds the ARA.
The boom continues for Australian luxury market
The Luxury Retail 2015 Report from CBRE, the world's largest real estate management group, is gung-ho about the prospects of the Australian luxury market over the next five years. Last year international retailers, including Sephora, Cartier, Omega and Valentino, opened 40 stores in Sydney, Melbourne, Brisbane and Perth - up from 35 in 2014. "Australia is one of the best performing countries for major international retailers", says Zelman Ainsworth, CBRE's head of Victorian retail leasing. "The stable political environment and the clear synergies with Asia are further benefits retailers are able to leverage from".
Growth will be concentrated on the eastern seaboard over the next five years, says CBRE. Elie Tahari, Kiton, Goyard, Rag & Bone and James Perse are just a few of the overseas retailers who will throw their hats in the ring by the end of 2017. There's plenty of room for them all. In contrast to Hong Kong and Shanghai, where 80 to 90 per cent of the world's top luxury brands have set up shop, Australia has a much lower concentration. "The penetration rate of luxury retail is just 50 per cent, primarily due to the dominance of department stores in this segment of the market", says Ainsworth.
Chinese travellers will be a major force behind the luxury explosion. Chinese tourists spent $7.7 billion in Australia last year, says Tourism Research Australia, and the figure is expected to almost double to $13 billion by 2020.
Johnson & Johnson acquires NeoStrata
Nearly all of the major European and US multinationals have spent up big to acquire advanced anti-aging skincare brands in recent years, including , Unilever and L'Oréal. Johnson & Johnson joins the "club" with the acquisition of NeoStrata, a global leader in dermo-cosmetics. The sector that has become one of the biggest growth areas in skincare with key brands such as La Roche-Posay and Eau Thermale Avène pushing global sales to US$16 billion.
The financial details of the buyout haven't been disclosed, but the intent is clear. J&J is keen to push the boundaries of its anti-ageing research. , a market leader in alpha hydroxy acids, is owned by TriStrata, which is also including brands such as Exuviance, CoverBlend and Psorent in the agreement.
According to the global chairman of J&J's consumer division, Jorge Mesquita: "Drs Ruey Yu and Eugene Van Scott formed NeoStrata in 1988 and continue to make significant contributions to the science of skincare. NeoStrata's legacy in dermo-cosmetics will complement our global consumer portfolio and enable us to deliver advanced skincare brands to consumers around the world".
Global cosmetic brands rule the roost says Nielsen
Consumers might have a strong preference for their food to be produced close to home. But, in spite of the rise of indie and niche brands, the same can't be said for beauty and personal care. The Nielsen Global Brand-Origin Survey collated the opinions of 30,000 consumers in 61 countries. More than 75 per cent of respondents revealed that a brand's origin was as important as price, function and quality. In Africa, the Middle East and the Asia/Pacific region, brand origin trumps the other big three as the most important reason for purchase.
The dominant beauty nations - France, the US, Korea and Japan - are in no danger of losing their crowns, says Nielsen. Wide availability, high quality and a legacy of influence keep beauty and grooming fans coming back for more. Consumers in every region surveyed revealed an overwhelming preference for multinational brands when it comes to buying cosmetics, haircare, razors and deodorants.
Patrick Dodd, group president of Nielsen Growth Markets, says: "Global brands are able to leverage their scale and expertise, research and development capabilities, and strong brand equity to provide high-quality and innovative personal care products to local markets around the world".
Snippets from the wires
- A few years ago a German brewer scored global headlines for producing an anti-ageing beer. A British company, Bompas & Parr, has launched the world's first anti-ageing gin. Every bottle contains 90g of pure collagen, but it's fair to say that the spirit's 40 percent alcohol content could also have a lot to do with feeling younger.
- Jean-Paul Agon, Chairman and CEO of L'Oréal, has two years to run on his current contract with the French beauty giant. Nicolas Hieronimus, head of L'Oréal's Luxe and Active Cosmetics divisions, has long been viewed as the heir apparent for the top job. But analysts are speculating that he may have a competitor following Alexis Perakis-Valat's promotion to head of the L'Oréal Consumer Products Division.
- Allergan's US$160 billion merger deal with Pfizer fell through in early April. The maker of Botox has clearly moved on. The company has bought Topokine Therapeutics for US$85 million, mainly for the worldwide rights to XAF5 - a wonder ingredient which shrinks undereye bags.
- As we reported recently, China is the world's leading producer of counterfeit goods. Alibaba, the operator of T-Mall, has become the first Chinese e-commerce giant to join the International Anti-Counterfeiting Coalition (IACC).
- Korean cosmetics are gaining ground in Europe. France accounted for 35 per cent of K-Beauty exports to Europe in 2015 - AUD$21.4 million. The UK claimed second ranking (16 per cent), followed by Germany (9 per cent)
Newsletter image: Instagram.com/taylergolden/
