Australians to spend $7 billion online during festive season; Huda Beauty scores significant private equity investment; Nestlé buys vitamin and supplement maker for $US2.3 billion; and Unilever ups natural cred with deodorant acquisition and new mass brand.
Australians to spend $7 billion online during festive season
The Australian Retailers Association (ARA) and Roy Morgan Research predicts that the total bill for the six week spending binge from November 15th to December 24th will come close to $50 billion. Online shopping now accounts for 7 per cent of total retail sales in Australia, says the ARA, and forecasts that Aussies will fork out $7 billion for e-commerce purchases over the Christmas trading period. According to Russell Zimmerman, ARA Executive Director, 12.3 million active consumers used online platforms for their festive buying spree in 2016.
Online retail in Australia is growing at 5 per cent a year, says Zimmerman, and the ARA's recent research in collaboration with Hitwise Australia shows that electronic devices such as PlayStations, Xboxes and iPads ranked as the top three search items in eBay in 2017. But 40 per cent of Australian consumers finger clothes, shoes and accessories as their most favoured online buys.
Average monthly online sales of sports and recreation equipment and apparel have sky-rocketed over the past year, adds Ryan Murtagh, CEO of NETO, the retail and wholesale management platform. "Given the ever-increasing health-consciousness of Australians, coupled with the onset of summer, we will likely see a trend towards outdoor and health-centric gifts over Christmas".
Huda Beauty scores significant private equity investment
As we reported recently, Huda Kattan was on the scout for an investor to grow the business. Her four-year old beauty brand – Huda Beauty – is forecast to close the year with $US200 million in retail sales and is sold in 40 Sephora stores in the US. The move has paid off. TSG Consumer Partners, has acquired a minority stake in the brand for an undisclosed sum.
TSG, with $US5 billion in assets, has a strong track record in the beauty and personal care industries. The private equity firm had stakes in Smashbox, IT Cosmetics and e.l.f Cosmetics before their respective sell-offs to Estée Lauder, L'Oréal and TPG Growth. The agreement is a first for a beauty influencer. Michelle Phan, Jaclyn Hill and Patrick Starr partnered with existing beauty brands to leverage success. But Kattan has built her own indie brand from the ground up, fuelled by her 27 million Instagram followers and four million YouTube subscribers.
Dubai-based Huda Beauty kicked off with a curated collection of false eyelashes and has branched into highlighters, lip colours, eyeshadows and more. Along the way, Ms Kattan has been named in Forbes Top 2017 Influencers in beauty and TIME's Most Influential People on the Internet. TSG's involvement will springboard global expansion, notably in Asia, an increased presence in Sephora stores and fuel new product development.
Nestlé buys vitamin and supplement maker for $US2.3 billion
In 2014, Nestlé and L'Oréal shuttered their Inneov joint venture, which specialised in cosmetic supplements sold in pharmacies. The Swiss food titan has a 23 per cent stake in L'Oréal and Nestlé is taking another look at the health and wellness from within category as sales of traditional packaged foods decline.
Over the past four months, the world's largest packaged foods company has bought Sweet Earth Vegetarian Foods, Blue Bottle Coffee which focuses on single-origin blends, and Chameleon Cold-Brew Coffee, the number one organic cold-brew coffee brand in the US. The latest deal to expand Nestlé's presence in the global healthcare market is the $US2.3 billion buyout of Canadian vitamin manufacturer, Atrium Innovations, who specialise in probiotics, multi-vitamins and all-natural and organic meal replacement supplements.
Atrum's major brand, Garden of Life, is available in Australia. The company has seven factories in the US, Canada, Europe and Argentina and boasts annual revenues of $US700 million. Nestlé has also been named as a prospective buyer for the consumer health division of German giant Merck, including Seven Seas Vitamins and Bion food supplements, which could have a price tag of over $US4 billion.
Unilever ups natural cred with deodorant acquisition and new mass brand
Unilever was ranked number one in the 2017 Globe Scan/Sustainability annual survey for the seventh year in the row. The multinational has also pledged to be carbon positive by 2030. Consumers appreciate the feel-good corporate strategy and Unilever's sustainable personal care brands delivered more than 60 per cent of overall growth in 2016.
Last month, P&G acquired Native deodorants, a natural brand, to expand its best-selling stable of sweat-controlling products. Unilever has followed suit with the buyout of Schmidt's Naturals, which started life as a natural deodorant brand before extending into soaps and toothpaste. According to Alan Jope, President, Unilever Personal Care: "Schmidt's Naturals is a great strategic fit for our personal care business, allowing us to reach new consumers who prefer natural options. We look forward to utilising our personal care leadership to extend Schmidt's Naturals into new sales channels and geographies".
Unilever's latest mass market personal care brand – Love Beauty and Planet – debuted in the US last week. Aimed at Millennials seeking natural hair and body care, the lineup includes shampoos, conditioners and body washes. Free from nasties, the products contain ethically-sourced oils and extracts such as Bulgarian rose. The bottles are made from 100 per cent recycled plastic and are 100 per cent recyclable. Products deemed by consumers to be natural now make up 25 per cent of the personal care market, says Jope.
Snippets from the wires
- The global nail care sector has lost heat over the past couple of years. But gel formulas and nail artistry are fuelling an echo boom, reveals a new report from Research and Markets. The researcher predicts a compound annual growth rate of 9.5 per cent through to 2024 to lift worldwide nail product sales to $US15.5 billion.
- Strong results in the US delivered a record $US300 million in export sales for AmorePacific from July 2016 to July 2017. A rise of 35.2 per cent over the same period a year earlier for South Korea's number one beauty player.
- L'Oréal controls over 33 per cent of the $US11 billion global hair colour market. The French multinational previewed its first vegan hair colour – Botanea – last week and the professional range will debut in Europe in May. L'Oréal have made plant-based dyes before but the effectiveness of the new collection makes it a game-changer.
