Oct 28, 2019: Elisabeth King reports on this week’s business news

Priceline sales top $2.1 billion; beauty drives Q1 2020 growth for P&G; Alibaba predicts more than 500 million users for Singles' Day 2019; and Australia's top four gift-giving personalities.

Priceline sales top $2.1 billion
API, the parent company of Priceline, has posted group revenues of $4 billion for the 2019 financial year. Net profits after tax rose to $56.6 million as like-for-like sales helped Australia's largest beauty products retailer to meet its full-year estimate. Priceline and Priceline Pharmacy's total network sales spiked 2.1 per cent to $2.1 billion.

Thirteen more stores have opened in the past year, taking the national Priceline network to 488 stores. Richard Vincent, API CEO and managing director, singled out major product launches and category development innovations as drivers of growth and increased footfall. The vitamins and supplements and fragrance categories also returned to growth.

As the major supermarkets and rival Chemist Warehouse continue to increase their beauty offerings and engage in major discounting, the beauty and cosmetic market will remain fiercely competitive as the all-important Christmas trading period looms. API completed the acquisition of Clear Skincare Clinics in August for $127.4 million and the network has expanded to 52 clinics.

Beauty drives Q1 2020 growth for P&G
Procter & Gamble (P&G) has kicked off its new fiscal year with a bang. Overall global net sales rose 7 per cent to US17.8 billion for Q1 2020. But beauty outperformed other divisions to deliver a 10 per cent hike in organic sales for the July to September period.

According to the giant multinational, "disproportionate growth" of the prestige SK-II brand and Olay sales in China led the surge. Haircare sales, where P&G is competing strongly with Unilever in the global marketplace, edged up in mid-single digits. But the grooming sector, which includes the flagship Gillette brand, experienced modest growth of only 1 per cent due to continued competition from startup brands such as Unilever's Dollar Shave Club and Harry's, which was acquired by Edgewell, the owner of Schick, earlier this year.

On the back of the positive Q1 results, P&G has raised its forecast for financial 2020 from 3 to 4 per cent to 3 to 5 per cent. "We delivered strong top-line growth, profit margin expansion and cash productivity in the first quarter, enabling us to increase our outlook for fiscal year results", noted David Taylor, P&G chairman, president and CEO.

Alibaba predicts more than 500 million users for Singles' Day 2019
Alibaba's Singles' Day, the world's largest 24-hour online shopping event, continues to shatter records each year. In 2018, sales reached AUD$42.7 billion as Australia retained its number four position in the top five countries selling into China. More than 180,000 brands took part, including global heavyweights such as Estée Lauder, L'Oréal, Nike and Adidas. Health supplements and beauty products accounted for seven out of the leading 10 products bought by Chinese consumers and beauty is a top five category.

This year's 11.11 Global Shopping Festival, to use the official moniker, is expected to attract 500 million users – an increase of 100 million by contrast to last year – says Alibaba. According to the Chinese online titan, more than one million new products will be on offer and the number of brands taking part has increased to 200,000. Thousands of brands and merchants have upgraded to Tmall Flagship 2.0, which debuted a few months ago, to further engage with customers. In 2018, total gross merchandise value sales for Singles' Day increased by 27 per cent over the previous year and Alibaba hopes to exceed this uplift.

Australia's top four gift-giving personalities
Throughout the year, BEAUTYDIRECTORY assists media and influencers with lists of beauty and cosmetic products targeting the major gift-giving events such as Mother's Day, Father's Day and Christmas. With good reason. Australians spend $19.8 billion on gifts each year, reports the Financial Planning Association of Australia (FPA). In descending order, the average Aussie spends the most on a spouse or partner ($437), followed by $361 for children, $201 per parent and $115 for pets.

Australians are still very Christmas-oriented when it comes to gift-giving, spending an average $93 on a significant Christmas gift. Aussies are fairly evenly divided when it comes to major gift-giving personalities, reveals the FPA, and the beauty industry should take note of the predominantly female-oriented types.

1. Heartfelt Givers - 26 per cent - More likely to be female (57%), spend $103 per month on gifts and least likely to bulk buy gifts.

2. Impulsive Givers - 22 per cent - More likely to be female (61%), spend the most amount per month ($112)) and are the least likely to budget for gifts (24%).

3. Practical Givers - 28 per cent - Most likely to be older with 66 per cent being Gen Xers and Baby Boomers. Spend about $104 per month and are the most likely to budget for gifts - 40 per cent

4. Simple Givers -  24 per cent - Spend the least amount of money per month – $85 – and prefer to give cash or an easy choice such as chocolates.

Snippets from the Wires

  • Back in March, Amazon launched its first private label skincare brand – Belei. The giant online retailer has debuted the 12 SKU range in Europe's top five beauty markets – Germany, France, the UK, Italy and Spain.
  • Gelita, the Germany-based global market leader in gelatine and collagen peptide production, has entered an agreement with US biotech company, Geltor, to launch the world's first ingestible animal-free collagen. The global collagen supplement market is enjoying double digit annual growth and is projected to reach US$6.63 billion over the next four years. Gelita Australia, the local subsidiary, manufactures bovine collagen and also imports bio-active collagen peptides.
  • L'Occitane's global net sales in the first half reached 727.2 million euros (AUD$1.81 billion) – a rise of 19 per cent over the same period in 2018.
  • The Jessica's Secret Index tracks searches by Chinese fragrance fans each month. The top 10 searches for September were: Jo Malone Wild Bluebell, YSL Black Opium, Gucci Bloom Acqua di Fiori, Gucci Bloom, YSL Mon Paris, Jo Malone Wood Sage and Sea Salt, Giorgio Armani Si Passione, Jo Malone English Oak and Redcurrant, Miss Dior Blooming Bouquet and Chanel Bleu de Chanel – the only men's fragrance.