Jan 13, 2020: Elisabeth King reports on this week’s business news

Beauty tech grabs headlines at world's largest consumer technology show; leading Italian investment firm buys 20 per cent stake in Santa Maria Novella; halal beauty and personal care sales to reach US$54 billion; and L'Oréal to ramp up international expansion of US luxury brands with new global president.

Beauty tech grabs headlines at world's largest consumer technology show

L'Oréal's Beauty for All event in Melbourne last month underlined the importance of technology to the multinational's future. A strategy that is pervading the beauty industry as a whole. The Consumer Electronics Show (CES), held in Las Vegas every year, is the world's largest technology trade show. This year's iteration ran from January 7th to 10th and some of the world's leading beauty players used it as a major showcase of their latest tech innovations.

Procter & Gamble are considering a price tag of US$600 for its updated Opte Precision Skincare System, a wand-like tool that removes spots and hyperpigmentation almost instantly, which made its debut at CES. Korean giant, AmorePacific, previewed two launches - a facial mask 3D printing system through its Iope brand and a flexible LED device badged under the Makeon brand, noted for advanced handheld devices such as Thermowave Eyelift.

Reduit, a Swiss brand which specialises in products featuring the magnetic delivery technology used in the med-tech sector, debuted a hand-held device which claims to provide more effective delivery of active ingredients to the skin.

The most talked-about reveal was Perso - an AI-inspired at-home system - from L'Oréal. Developed by the multinational's technology incubator, helmed by Guive Balooch, who visited Australia in December, it will be released next year. Initially to be used for skincare, the 15cm device weighs 500g and whips up compressed beauty formulas from physical cartridges inserted in the bottom. In-built technology assesses the condition of the skin and environmental factors. At a later date, the technology will be adapted to produce personalised lip and foundation formulas. Much of the excitement surrounding the product is that consumers will be able to do this at home, instead of visiting beauty counters in-store.

Leading Italian investment firm buys 20 per cent stake in Santa Maria Novella

Officina Profumo Farmaceutica di Santa Maria Novella - to give the venerable Florentine brand its full name - has built up a cult following in Australia. Represented by Agence de Parfum, one of Australia's leading niche and home fragrance distributors, the company dates back to 1612 and was founded by Dominican monks.

Believed to be the oldest pharmaceutical laboratory in Europe, Santa Maria di Novella makes more than 600 products, including body care. home and personal fragrances and liqueurs. The brand is available in over 300 locations worldwide and online, but there's still plenty of scope for growth. Italomobiliare, an investment company that specialises in "Made in Italy" brands, has taken a 20 per cent stake in Santa Maria Novella for 40 million euros (AUD$64.6 million) to springboard further international development.

The brand had a turnover of 31 million euros (AUD$50 million) in 2019. Just over 61 per cent of sales are in Europe and the Middle East, 18 per cent in the US and 21 per cent in Asia, principally in Japan and South Korea. China is very much on the radar for future growth as Italomobiliare gears up to expand distribution and accelerate online sales.

Halal beauty and personal care sales to reach US$54 billion

The global halal cosmetic market is hampered by the same lack of standardisation that bedevils natural, vegan and clean beauty products. There is a growing call, especially in Indonesia, for authentic certification for Muslim women. According to Allied Market Research, the situation hasn't stopped the huge growth of the global halal beauty market, which is expected to reach US$54 billion by 2022.

The sector is expected to to experience 15.2 per cent growth over the forecast period. Fragrance is on track to record a 15.8 per cent uptick, notably in Middle Eastern hotspots such as Saudi Arabia, the UAE, Kuwait and Bahrain. But the Asia/Pacific region is expected to deliver a massive boost to the worldwide halal beauty market as purchasing power continues to escalate in Indonesia, India and Malaysia.

The colour cosmetic segment is also enjoying a major upsurge of 15.3 per cent per year and is expected to exceed US$17.9 billion by 2022. The huge increase in interest in fashion and makeup trends across the Middle East and APAC and the coming-of-age of younger demographics is propelling sales of lip colours, blushers, eye makeup and hair colour. Online sales are also expected to fuel the halal beauty market over the next two years.

Major indie brands in the halal beauty space owned by Muslim women, include Huda Beauty, founded by American-Iraqi beauty mogul, Huda Kattan. Farsali from Canadian YouTuber, Farah Dhukai, has been a big hit in Sephora. Brit beauty gurus - Amena Khan and Zukreat Nazar - are the brains behind Zukreat and Ardere Cosmetics.

L'Oréal to ramp up international expansion of US luxury brands with new global president

L' Oreal's focus on Asia has grabbed the most attention recently. But the French titan's interest in the US dates back decades and is best illustrated by its acquisition of Maybelline New York for US$660 million in 1995. There have been a number of lesser and greater acquisitions and L'Oréal's American portfolio includes key haircare brands such as Redken and Matrix, CeraVe, SkinCeuticals and a quartet of luxury brands - Urban Decay, IT Cosmetics, Clarisonic and Kiehl's.

Kiehl's is the oldest acquisition and was taken over in 2000. Clarisonic, Urban Decay and IT Cosmetics were bought out in 2011, 2012 and 2016, respectively. Under the leadership of Cheryl Vitali, Global President of Kiehl's, the apothecary brand rapidly expanded from its US roots to a truly global player. She has been appointed to the newly created position of Global President for L'Oréal's four America luxury brands to further ignite their global expansion. Leonardo Chavez, a 20 year L' Oreal veteran, will become the new Global President of Kiehl's.

Snippets from the Wires

  • Japan and South Korea have been locked in a trade war since last July. But beauty exports from South Korea have dodged the freeze. Japan imported US$370 million worth of South Korean beauty and cosmetic products in 2019, reports the Korea Trade Investment Agency - a rise of nearly 30 per cent over 2018.
  • Chanel has enjoyed huge global succes with its hand creams over the past couple of years, packaged in a sleek, shell-like compact perfect for travel and slipping into handbags. The luxury fashion house has made the packaging a superstar again with the launch of four of its Chance fragrances in a new portable perfume pen format - the original Chance, Chance Eau Fraiche, Chance Eau Tendre and Chance Eau Vive.
  • Kiko Milano didn't enjoy much success in the US, exiting the American market in 2018. The number one makeup brand in Italy does well in other parts of the world and has 770 stores in 15 countries. Famed for its budget prices, Kiko Milano is revving up its Indian presence with four to five new stores in Delhi, Lucknow, Mumbai, Kolkata and Guwahati, the largest city in north-east India.