Global online beauty and personal care sales to reach US$60 billion; Ipsy poised for international expansion as sales reach US$500 million; Australian women more health-conscious than ever; and LVMH perfumes and cosmetics fuel record Q3 results.
Global online beauty and personal care sales to reach US$60 billion
The increasing use of smartphones for online shopping has been a major boon for e-commerce beauty and personal care sales, says Orbis Research. The sector is enjoying runaway growth worldwide and online sales have grown from US$17 billion in 2014 to US$25.8 billion in 2018. By 2023, says the data tracker, the global market is expected to reach US$60 billion.
Apart from the smartphone revolution, mega shopping events such as Black Friday, Cyber Monday and Singles' Day are also leading factors behind the huge upsurge in online beauty and personal care sales. But it's not just giant marketplaces such as Amazon and Alibaba that are reaping the rewards. The major beauty manufacturers are also very dominant in direct-to-consumer sales as loyal fans go direct to the source. For example, a huge 10 per cent of L'Oréal’s global sales are now online.
Here are the top 10 beauty and personal care companies leading the online charge. Just behind the leaders are: Chanel, LVMH and Coty.
- L'Oréal’s
- Unilever
- Procter & Gamble
- Estée Lauder
- Shiseido
- Beiersdorf
- AmorePacific, South Korea's number one
- Avon
- Johnson & Johnson
- Kao (owner of John Frieda, Biore and Molton Brown)
Ipsy poised for international expansion as sales reach US$500 million
Many beauty subscription services have come and gone. But Ipsy, founded by YouTube phenomenon Michele Phan, Jennifer Goldfarb and Marcelo Camberos in 2015, has not only gone the distance, it has tripled in size over the past four years to reach sales of US$500 million.
Ipsy received an injection of US$100 million in funding from leading private equity companies, TPG Growth and Sherpa Capital, in the first year of its launch. Last year, global financial media company, Bloomberg, reported that the business was exploring sales options and could attract a buyout price of US$2 billion.
The company denied the rumour and now boasts three million monthly members. Rival Birchbox sold a majority stake to hedge fund Viking Global last year after talks with the QVC shopping channel fell through. Phan left Ipsy in 2017 and the company is raising the price of its lowest-tier membership from US$10 to US$12 this month. Talk of a sale or an IPO is on the back burner, but the company has announced it plans to expand into international markets from its North American home base.
Australian women more health-conscious than ever
There's nothing more satisfying than reading a report that rubber-stamps what most of us believe. According to Roy Morgan Research, Australian women take better care of their health than men. Nearly half (47%) of Aussie women take vitamins, minerals and supplements, says the researcher, by contrast to 35 per cent of men.
Men also suffer from osteoporosis but women have a greater risk. Three quarters of Australian women (73%) reveal that they actively try to include sufficient calcium in their diet, as opposed to 64 per cent of men. Women are also more likely to seek out additive-free foods – 53 per cent – than men (41%). They are also more inclined to use natural medicines and health products – 42 per cent vs 30 per cent.
Healthy eating is high on the agenda for Australian women with close to a third (29%) following a low-fat diet, by contrast to 25 per cent of men. More women also prefer to eat healthy snacks – 68 per cent vs 57 per cent. According to CEO Michele Levine – “ Roy Morgan health data appears to show an alarming trend, with men falling well short of women when it comes to various attitudes concerning food and diet".
LVMH perfumes and cosmetics fuel record Q3 results
Other luxury players may be in turnaround mode, but LVMH remains bullet-proof in the face of trade wars and civil unrest in key locations such as Hong Kong. The world's largest luxury goods group delivered strong Q3 results with revenues surging 11 per cent to US$14.6 billion. The US, Europe and Asia all posted strong results as the world's appetite for luxury continued to increase.
The Perfumes and Cosmetics division recorded organic growth of 8 per cent in the first nine months of 2019. Christian Dior strengthened its magic brand status through its iconic fragrances and last year's release, Joy. Guerlain also struck gold with its Abeille Royale skincare and Rouge G and L'Essentiel makeup ranges. Givenchy's refresh of the L'Interdit fragrance franchise proved to be a winner. Fenty Beauty by Rihanna, Acqua di Parma and Fresh also saw major spikes in revenues. The launch of Celine's first haute parfumerie collection during the third quarter, ahead of the opening of a flagship fragrance boutique in Paris, was the icing on the cake for LVMH's high performing stable of prestige beauty and perfume brands.
Snippets from the Wires
- Consumers in the Asia/Pacific region, led by China, India and Indonesia, are increasingly looking for sun protection with high SPFs. According to Mintel, the share of all new sun-related products with an SPF higher than 40 has increased to 74 per cent – up from 66 per cent in 2014. Annual growth in the APAC region is set to achieve annual growth of 7 per cent over the next two years, says the researcher.
- Online directory, Yelp, is celebrating its 15th birthday this month. To mark the milestone, the platform has mapped beauty trends since its inception. Brazilian wax and keratin treatments and lash extensions have declined in popularity. While technically advanced skin care and treatments like hydrafacials, dermaplaning and microneedling are increasingly popular as consumers seek glowing complexions.
- In spite of fierce competition from international companies, locally-produced Pechoin has been named China's number one brand in the health and beauty space for the third year in a row by Kantar Worldpanel. Founded in 1931, the company nearly disappeared from the Chinese market. But its heritage status springboarded a huge revival and Pechoin now has annual sales of AUD$3.64 billion.
- Last August, Zegna bought an 85 per stake in US-based luxury label, Thom Browne. the Italian prestige menswear label has a major fragrance business through longtime licensee, Estée Lauder. Thom Browne has also entered the fragrance sector in the US with the launch of six scents all based on vetiver.
