-
Comment Inside
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
When talking about how the end of the year will pan out, many
industry players continue to be nervous about the slowdown in China
and have reservations about the holiday season in Europe,
especially in light of the terrorist attacks in France, which is
set to put a dent in pre-Christmas sales and hit tourist spend.
However, in the US, the outlook is a lot more positive.
Market-research group NPD says that the US prestige beauty market
has entered a phase of “renewed growth”, putting the industry in a
healthy position going into the holiday season. US prestige beauty
sales from January to September
were up 8% and the group says more consumers plan to purchase
beauty products this holiday compared with 2014. In terms of
category, make-up is set to drive holiday sales in the US and
elsewhere, with
the category cited by industry watchers as the fastest growing
globally. In the US, sales of color cosmetics rose 13% from January
to September and consumers are expected to prioritize this category
for the holidays, according to NPD. In Europe too, make-up is doing
well and is credited with driving growth in beauty overall,
a trend that is likely to continue. In France for example,
prestige lipstick sales rose 11% between January and August this
year, while facial make-up saw growth of 2%. Fragrance is also set
to put in reasonable results in key markets—in the first half of
this
year, the category performed better than last year—with juices
as opposed to gift sets likely to drive growth for the holidays in
countries such as the US. Skincare, however, is expected to
continue to see soft sales in mature markets, although niche
categories, such as masks and oils, could help lift the segment.
All in all a very mixed market.
A mixed market The buzz 2News roundupNetwatch 7 Social media
monitor
Interview 8P&G Prestige vp of global marketing development
and operations Jose Maria Marquiegui
Insight 10South Korean brands
Show review 13 Cosmoprof Asia
Store visit 16Chanel’s beauty standalone, Paris
Oonagh PhillipsEditor in [email protected]
www.bwconfidential.com The inside view on the international
beauty industry December 3-16, 2015 #121
Order your copy of BW Confidential’’s special edition
The Fragrance Guide on p.7News headlines daily on
www.bwconfidential.com @BWCbeautynews
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page
2CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
News roundup
The
buz
z
At a glance...
Retail
LVMH-owned beauty retailer Sephora has unveiled a new store
concept in San Francisco that is built around its teach, inspire
and play (TIP) approach. Called Sephora Beauty TIP Workshop, the
8,500ft2 (780m2) store is at the retailer’s revamped Powell Street
location. It stocks over 13,000 products, including 12 new brands,
and offers a range of classes and services. Features include The
Beauty Workshop, which Sephora says acts as a
central workstation where consumers can participate in group
beauty classes, watch tutorials, share content using iPad stations
and take inspiration from The Beauty Board, a shoppable gallery
that displays user-generated content on a digital screen. Elsewhere
in the store is The Skincare Studio for skincare consultations
and
the Sephora Beauty Studio for one-on-one makeovers. Meanwhile,
Fragrance IQ allows customers to explore 18 scent families thanks
to the new, InstaScent scent immersion technology. The store also
features new, multi-branded interactive areas including Trend
Tables and the Hair Play Station. Sephora plans to progressively
roll out the concept to both new and existing locations.
Estée Lauder Companies (ELC)-owned brand La Mer opened its first
Brazilian store at Iguatemi Shopping, a luxury mall in São Paulo.
The 42m2 (452ft2) store will carry 32 skus from the La Mer brand
and also features a treatment room for facials and body treatments.
For the moment, the store is the only outlet (apart from spas)
offering La Mer treatments, an area that the brand wants to
develop.
Middle Eastern retail and distribution company The Chalhoub
Group has debuted a new retail concept offering beauty, bags and
children’s products in Abu Dhabi’s Yas Mall. Tryano is a 20,000m2
(21,500ft2) specialty store selling more than 250 international and
local brands, and according to the company, has one of the largest
offers in the UAE in its categories. The ground floor beauty space
is inspired by winter, and is entered via
the fragrance department. Make-up and skincare also have
dedicated areas, and the store offers beauty boutiques, corners and
multi-brand areas. Several brands are exclusive to the store,
including Editions de Parfums Frédéric Malle and SK-II. The
three-floor store also offers bespoke services and houses a branch
of La Patisserie des Rêves pastry shop. n n n
Stay informed with our daily news headlines on
www.bwconfidential.com
n Sephora unveils new TIP concept in San Francisco
n Natura to open brick-and-mortar stores in Brazil
n John Demsey promoted at ELC
n Beyond Beauty reveals new show format
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 3
News roundup
The
buz
z
n n n UK-based online beauty retailer Feelunique has acquired
French perfumery chain Parfumeries Rive Droite in a bid to develop
its footprint in France. Founded in 1986, Parfumeries Rive Droite
has four boutiques in Paris and its immediate suburbs. These stores
will be rebranded under the Feelunique nameplate in the coming
months. Fabrice Rimbault, director of Parfumeries Rive Droite, will
become chief operating officer
for Feelunique France. Feelunique also appointed Claire Blandin
as managing director for France at the beginning of November.
Blandin was previously head of purchasing at Beauteprivee.fr and a
beauty buyer at Monoprix. Feelunique recently announced the opening
of a pop-up store in Paris’ Marais district, showcasing 16 UK
beauty brands, from November 27 to December 13.
Strategy
Brazilian direct seller Natura is to open brick-and-mortar
stores in large shopping malls across Brazil from 2016. The company
is currently planning the new concept and no further details on the
format were available.The move to open stores is part of Natura’s
strategy to diversify its distribution. The
company has been hit by falling sales, a declining number of
sales representatives, increased competition from local rival Grupo
Boticário, which has rolled out a number of new retail formats in
the past few years, and the slowdown in the Brazilian economy. The
company’s new president Roberto Lima has outlined the group’s need
to create new brands, explore new distribution channels and carry
out acquisitions. In 2012, Natura took a 65% stake in Australian
company Aesop, a brand with its own store network.Analysts say that
moving into retail could potentially harm the company’s
relationship
with its sales representatives. However, in a statement
regarding the new stores, Natura underlined that providing new
buying opportunities for Natura products would strengthen the
firm’s direct-sales business and be an asset to sales
representatives.
Spanish fragrance house Eurofragance has opened a new creative
center in Dubai, UAE. The company invested €2m in the new 1,000m2
(10,763ft2) facility, which will focus on the design and evaluation
of fragrances and applications, as well as sample manufacturing.
The center also has sales, logistics and corporate development
functions. One of the objectives of the new center is to boost
sales in air care and personal care. Eurofragance has creative
centers in Barcelona and Mexico and plans to open another in
Singapore in the near future.
Results
Hong Kong-based beauty retailer Sa Sa saw its sales fall 10.6%
to HK$3.78bn ($487.7m) in the six months ended September 30,
compared with the prior-year period. The company’s profit fell 55%
to HK$153m ($19.7m). The retailer attributed the sales decline to a
number of factors, including the decline in mainland tourists
traveling to Hong Kong and Macau, where Sa Sa does the majority of
its business, as well as a reduction in spending from Chinese
tourists. Sa Sa’s sales in mainland China also fell by 8.7% in
local currency terms, while those in Singapore were flat, and sales
in Taiwan dropped 2.2%. Online sales dropped 1.4%, the company
said. n n n
-
The
buz
z News roundupn n n Data
Mascara sales in Europe delivered a mixed performance in October
2015, according to data from market-research company NPD. Mascara
sales in Spain grew 14% during the period, while those in Italy
were up 3%. Both the UK and France witnessed declines, however,
with sales of mascara in France down 1% and sales in the UK
decreasing 2%.
People
Estée Lauder Companies has named John Demsey executive group
president. Demsey will add Clinique and the Men’s Skincare Group to
his portfolio while continuing to oversee Aramis and Designer
Fragrances, Prescriptives, MAC Cosmetics, Bobbi Brown, Jo Malone
London, Bumble and bumble, Tom Ford, Smashbox, Rodin olio lusso, Le
Labo, Editions de Parfums Frédéric Malle and Glamglow. Demsey will
also lead a newly created Center of Excellence for Creative. The
group has also appointed Jane Hertzmark Hudis group president.
Hudis will continue
to lead the Estée Lauder and AERIN brands while adding La Mer,
Darphin, Origins and Aveda to her portfolio. Hudis is currently
global brand president, Estée Lauder. Under her leadership, the
Estée Lauder brand’s net sales have grown more than 40%, the
company said. These appointments, effective January 1,
2016, follow the announced retirement of group president Lynne
Greene.
L’Oréal Luxe is reshuffling its top management in the US.
Effective January 1, current division president Carol Hamilton will
become group president for the activity. Xavier Vey, current head
of Lancôme
USA, will become president and chief operating officer of
L’Oréal Luxe USA. Suriya Parksuwan, who joined L’Oréal from spirits
firm Remy-Cointreau in June, will replace Vey as president of
Lancôme USA. Hamilton will continue to manage
relationships with L’Oréal USA’s corporate teams as well as
manage the Luxe division’s shared teams and represent the activity
externally, a spokesperson for L’Oréal Luxe USA said. n n n
STAY INFORMED WITH OUR
DAILY NEWS SERVICE
News headlines daily on www.bwconfidential.com
BW Confidential, the inside view on the international beauty
industry
• All major news on the industry published every day on our
website• News headlines complement analysis and interviews in our
electronic publication and print magazine
• BW Confidential is the destination for keeping up-to-date with
what’s going on in the industry and staying ahead of the
competition
@BWCbeautynews
The website - daily news•The electronic publication - every two
weeks•The print magazine - four times a year
Mascara sales in Europe % change October 2015 vs October
2014Country % changeFrance -1Italy +3Spain +14UK -2
Source: NPD BeautyTrends
-
The
buz
z News roundupn n n Elizabeth Arden veteran Joel B Ronkin joined
US firms Fekkai Brands and Luxe Brands as ceo on December 1.
Prestige beauty firm Luxe Brands, which owns the Ariana Grande,
Josie Natori and Hawaiian Tropic labels, jointly acquired the
Frédéric Fekkai brand with UK-based Designer Parfums from Procter
& Gamble earlier this year. The partners created Fekkai Brands
LLC as a joint venture. Ronkin was most recently president of
global fragrances at Elizabeth Arden.
Beauty subscription service—and increasingly retailer—Birchbox
has named industry veteran Philippe Pinatel as its president and
chief operations officer. He will lead product development, retail,
operations and international for the company, focusing on its
growth and reinforcing its retail presence. Pinatel was most
recently senior vice president and general manager of Sephora in
Canada.
Germany-based subscription beauty box firm Glossybox announced
that Charles von Abercron, its founder and managing director, is
stepping down on December 31. He will continue to consult for the
company. On January 1, Caren Genther-Kappesz will become
Glossybox’s new ceo. She has previously held top management roles
at digital players including eBay’s Shopping.com subsidiary,
Brands4friends and Kalahari.com.
Cosmo International Fragrances has appointed Lucas Sieuzac as
senior perfumer, based in the US. Sieuzac previously spent 20 years
working for Symrise in Paris.
Launches
As part of its collaboration with fashion brand Balmain, H&M
launched a limited-edition Balmain x H&M fragrance on December
3. The unisex scent contains notes of tonka bean and jasmine, a
heart of cedar and white wood and a base of musk and sandalwood. It
will be sold in a selection of the retailer’s H&M Beauty
stores, priced at €34.99. The Balmain x H&M fragrance was
created in partnership with Interparfums, the license-
holder for Balmain scents.
Trade shows
Trade show organizer Informa is transforming its Beyond Beauty
Paris event for 2016. The show will now be split into two separate
events, one in June and one in September. The first, called
Alternative Fragrance & Beauty, taking place from June 16-18,
2016 in the Carreau du Temple in Paris’ Marais district, will be
dedicated to cosmetics and alternative perfume brands. Around 100
exhibitors are expected to take part. For the first time, day one
of the event will be open to the public. Features from Beyond
Beauty including the Beauty Challenger Awards, the Rare Perfumes
Meetings and the Zoom space, to be conducted in the perfume zone,
will form part of the new event. There will also be a conference
program focused on skincare, fragrance and trends. The second
event, called Beauty Factory, will be dedicated to the entire
supply chain for
perfumes and cosmetics. It will take place from September 13-14,
2016 at Paris’ Palais des Congrès. n
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 5
BW Confidential4 avenue de la Marne92600 Asnières sur Seine,
[email protected]: +33 (0)1 74 63 49 61Fax: +33
(0)1 53 01 09 79
www.bwconfidential.comISSN: 2104-3302Publisher: Nicolas
GrobEditorial Director: Oonagh Phillips
[email protected] Coordinator & Assistant:
Katie [email protected]: Sophie Douez,
Alex Wynne,
Renata Ashcar, Mayu Saini, Raphaëlle Choël, Corinne Blanché,
Naomi Marcoulet
Subscriptions1 year: electronic publication (20 issues) +
print magazine (4 issues) + daily news: €499 or US$699
[email protected]@bwconfidential.comBW
Confidential is published by Noon Media513 746 297 RCS
NanterreCopyright © 2015. All rights reserved. Reproduction in
whole or in part withoutpermission is strictly prohibited.
-
2015 DECEMBER, 8 & 9
CENTRO DE CONVENÇÕES REBOUÇAS - SÃO PAULO
THE ONLY& UNIQUE
BTOB MAKE-UPEVENT INS O U T HAMERICA
WWW.MAKEUP-IN.COM
= M94/Y100
= C3/M67
= K100
SaoPaulo
-
Net
wat
ch
BW Confidential reports on what’s being said about beauty on
social networks
Social media monitor
Announcements of the first NYX store openings in California, US
and Toronto, Canada, have generated excitement in the blogosphere.
Bloggers have also responded positively to a pop-up boutique for
the brand in London’s Selfridges, and expect more pop-up locations
or a store to follow.
Western retailers like Sephora and Urban Outfitters have been
praised for their Korean brand offerings. Recently, Sephora further
fuelled the buzz following its feature on Korean beauty. Popular
brands including Too Cool for School, TonyMoly and Skin Food are
appreciated for their unique packaging, ingredients, textures and
affordability.
Bloggers are applauding the arrival of Feelunique’s e-commerce
site offering a host of British brands in France. The site is also
praised for its attractive deals and free delivery for purchases
over €15.
News of Michelle Phan parting ways with L’Oréal is expected to
disappoint fans, say bloggers. There is also speculation about the
success and future plans for Phan’s Em Michelle Phan line, which
has been sold to Ipsy.
The
view
s ex
pre
ssed
in t
his
sec
tio
n a
re t
ho
se o
f b
log
ger
s an
d d
o n
ot
rep
rese
nt
the
op
inio
ns
of
BW
Co
nfi
den
tial
The Fragrance Guide
more than 100 pages of insight and analysisof the global
fragrance market
• Mature & emerging markets • Consumer habits • Travel
retail • New formats • Online sales • Sampling • Retail
developments • Packaging... Plus all the latest data and listings
on the category’s launches, brands, retailers, packagers and
fragrance houses
E verything you need to know about fragrance:
NEW
Order formPlease complete this form and return it:• by email:
[email protected]• by post: BW Confidential - 4 av. de
la Marne - 92600 ASNIERES - France
• Number of copies at €55 each : l_l_l Total amount: €
l_l_l_l_l
r CB, Visa, Mastercard/Eurocard l_l_l_l_l l_l_l_l_l l_l_l_l_l
l_l_l_l_l
Expiration date: l_l_l_l_l Security code l_l_l_l
r American Express l_l_l_l_l_l l_l_l_l_l_l_l l_l_l_l_l
Expiration date: l_l_l_l_l Security code l_l_l_l_l
r Please bill me (issues will be delivered upon reception of
payment)
Offe
r val
id u
ntil
Febr
uary
29,
201
6
Contact information
Company:.................................................................................................
First
name:...............................................................................................
Last
name:...............................................................................................
Address:...................................................................................................
Postal
code:....................................City:...................................................
Country:...................................................................................................
Email
(required):.......................................................................................
VAT number (required for European
Union):..............................................
Signature & date:
r Yes, I want to order The Fragrance Guide
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 8
Inte
rvie
w
P&G Prestige vice president of global marketing development
and operations Jose Maria Marquiegui talks about the challenges
facing the travel-retail channel
Challenges ahead
What are your expectations for the rest of the year and
2016?This has been a difficult year for the industry. [MERS,
changing Chinese travel, Brazil and Russia] are all impacting
business. What has happened to Hong Kong and Macau has had a great
impact on anyone who’s a local player. One positive of [operator]
consolidation is that if you are a travel retailer in Macau
airport, you’re probably struggling a lot, but if you’re a global
player, you’re maybe winning in Istanbul if you’re losing in Macau.
Dubai was in crisis last year, but it is growing in the
double-digits this year. Kuala Lumpur keeps growing—it’s becoming a
key hub. Ten years ago, Istanbul was a nice tourist destination,
but it certainly was not the fantastic luxury destination it is
today; these things come and go. I don’t want to play down the
impact of this crisis, but these are [external] and not structural
issues. In the travel-retail channel, with Gucci Bamboo, we have
had very good results.
We launched as an avant-première in travel retail and it has
ended up being stronger than Boss Ma Vie [launched in summer 2014].
We have been in the top five, so we have been very happy with the
way it has been developing in the last part of the year. Hugo Boss’
Boss The Scent launched with a world première with Heinemann, and
we are pleased with it and very hopeful for the next year.
How is the integration of P&G Prestige into Coty
progressing?Today, we are P&G and we are very focused on being
P&G; the merger has not happened [yet]. We have enough on our
plate, and we are very focused on doing as much as we can with our
iconic brands and with new initiatives. [The merger] will create
the number-one company for fragrances, the number two for
cosmetics, and number three for salon professional, so this is a
very exciting future. What is important is that we are creating a
new industry leader. We have to get authorization for the merger
and the day we can merge, it’s going to be great, but today we can
only announce Coty’s intention to buy these brands from P&G and
create this new company.
What are the biggest challenges facing the travel-retail
industry?We have to make this category grow again. We have to make
more people buy fragrances, make them fashionable again and we have
to increase the penetration of fragrances. In travel retail, we
have to convert walkers into shoppers. Passengers are a great thing
for the airports, but it’s shoppers that keep this industry moving,
and the rate of conversion is the biggest challenge we face. n n
n
”P&G Prestige vp of global marketing development and
operations Jose Maria Marquiegui
“
P&G Prestige vice president Jose Maria Marquiegui
Passengers are a great thing for the airports, but it’s shoppers
that keep this industry moving, and the rate of conversion is the
biggest challenge we face
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 9
Inte
rvie
w P&G Prestige vice president Jose Maria Marquiegui
”P&G Prestige vp of global marketing development and
operations Jose Maria Marquiegui
This has been a difficult year for the industry. [MERS, changing
Chinese travel, Brazil and Russia] are all impacting business. I
don’t want to play down the impact of this crisis, but these are
[external] and not structural issues
“
s P&G has opened pop-ups for Dolce & Gabbana Velvet at
Qatar airport
n n n How can you improve conversion?First, you have to have the
right initiatives, the right furniture and the right beauty
consultants—something that captures your attention. Very often, the
shelf is selling for you and you don’t have beauty consultants. So
unless consumers are inspired by the way the goods are presented,
why should they buy a perfume, and why should they buy today? They
may try today, and they may like it, and consider buying one day.
We need to sell the whole proposal in a way that means today’s a
good day to buy.We had a Dolce & Gabbana Velvet pop-up store in
the old Qatar airport and
had fantastic results, so now we are doing it in the new Qatar
airport, which just opened, and we want to expand it even further.
The pop-up store creates the right environment for Dolce &
Gabbana Velvet, our top premium line. You need to speak to an
expert who tells you the brand story, the brand philosophy and gets
you into the mood [to buy]. You can do this in a pop-up store, but
it is more difficult to do directly from the shelf. [Initiatives
like these are how] we are betting on helping the travel-retail
segment become a buyer destination rather than just a walker
destination. We believe we can do it with all of our brands.
How do you view the recent consolidation of travel retail?It’s
an opportunity to work better together and to use [operators’]
scale and our scale to penetrate better and to have better people
working together on analyzing data. I’m an expert on brands,
shoppers and consumers and they are experts on their airports; if
we can get all that information together and analyze it in a
combined way, the future is going to be great. I see more of an
opportunity coming out of the combined scale than any threat.
Consolidation in the industry is a fact of life, it has been
happening for 30 years, so if we have not got used to it, it’s
about time. n
s Gucci Bamboo and Boss The Scent have both seen strong results
when they pre-launched in travel retail
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 10
Insi
ght
An analysis of the continued popularity of Korean brands
Seoul style
South Korean brands
K-Beauty is currently the international calling card of the
cosmetics world, as manufacturers and retailers look to South Korea
as a source of growth. But the internationalization of South
Korea’s beauty industry is a recent phenomenon, while the local
market itself remains extremely insular, an atypical introvert on
the global beauty market.It is estimated that only 15% of South
Korea’s beauty market is taken up by
international brands. Korea’s two market leaders alone,
AmorePacific and LG Household & Healthcare, account for between
55% and 70% of sales, according to estimates, and continue to see
impressive growth rates. AmorePacific Corporation announced a 15.7%
increase in domestic sales for the first nine months of 2015 to
2.68 trillion won ($2.3bn). While LG did not indicate separate
results for its domestic business, the company said it saw 17.6%
sales growth for its Beautiful division in the third quarter, to
565bn won ($487.7m). LG said in its most recent report that its
domestic market share in the prestige segment had grown from 17.5%
at the end of the third quarter of 2014 to 20% in the second
quarter of 2015. n n n
s Domestic brands dominate the beauty market in South Korea
Korea’s cosmetics exports and imports Nine
months 2014 $bn
Nine months
2015 $bn
% growth nine months 2015/2014
FY 2014 $bn
% growth
2014/2013Cosmetics exports 1.06 1.73 +63.4 1.59 +53.5Cosmetics
imports 0.687 0.709 -3.1 0.950 +8.2
Source: Korea International Trade Association (KITA)
”Inspiration & Information general manager Florence
Bernardin
The Korean government wants to make cosmetics one of the key
pillars of the economy
“
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 11
Insi
ght South Korean brands
n n n “The market for Korean brands in Korea is strong and will
remain so for a long time,” comments Singapore-based strategic
advisory firm Martin Roll Company ceo Martin Roll, author of Asian
Brand Strategy. “If you look at almost any category—cars, retail,
technology, mobile phones, home appliances, even food,—[Koreans]
prefer their own brands,” he continues. “There is this sense of
isolation in Korean culture. If you speak to most of the
international brands, they’ve always found Korea very hard to
crack.” Leading Korean brands like Sulwhasoo, Innisfree
(AmorePacific) and Belif (LG)
are good at focusing on a story built around traditional
remedies (a category that performs well, along with brands centered
on product safety and surgical concepts). International brands like
Biotherm and Kiehl’s (both owned by L’Oréal) have been more
successful in South Korea than other foreign labels, partly because
of their storytelling, according to France-based consultancy
Inspiration & Information general manager Florence Bernardin.
In make-up, Estée Lauder Companies-owned brands MAC and Bobbi Brown
do well, the only two international brands to make the top 10 color
cosmetics ranking according to Euromonitor International. (Although
skincare dominates the market, representing around 50% of beauty
sales, make-up is the second biggest segment, and is growing fast
in department stores, according to observers.)With so much of the
market taken up by just two
players (Able C&C, the owner of Missha, is number three),
there should logically be little room for smaller players. But this
is not so. AmorePacific’s growth from a small, local company 20
years ago to an international beauty player today is a source of
national pride to Koreans, Roll says, and is inspiring a new
generation of entrepreneurs. “That’s going to fuel other
industries, and will attract talent to the industry. Whether you’re
a laboratory, or a designer, or an economist, it’s a major win for
Korea.”The Korean government has also been paying
attention, realizing that both at home and abroad, cosmetics
represent a growth opportunity for Korean industry, which until
recently was mainly focused on electronics. “The Korean government
wants to make cosmetics one of the key pillars of the economy,”
says Inspiration & Information’s Bernardin.
Exports accelerateKorean cosmetics exports grew 63.4% in the
nine months to September, according to data from the Korea
International Trade Association. That rate has accelerated from
growth of 53.5% in full-year 2014, 26% in 2013 and 19% in 2012. n n
n
Top 10 make-up brands in South Korea 2014Ranking Brand
1 The Face Shop (LG Household & Healthcare)
2 Etude (AmorePacific Corp)3 Hera (AmorePacific Corp)4 Iope
(AmorePacific Corp)
5 Missha (Able C&C)6 Sulwhasoo (AmorePacific Corp)7 Laneige
(AmorePacific Corp)8 MAC (Estée Lauder Companies)9 Bobbi Brown
(Estée Lauder Companies)
10 O Hui (LG Household & Healthcare)Source: Euromonitor
International
Top 10 skincare brands in South Korea 2014Ranking Brand
1 Sulwhasoo (AmorePacific Corp)
2 The Face Shop (LG Household & Healthcare)
3 Hera (AmorePacific Corp)4 Missha (Able C&C)5 O Hui (LG
Household & Healthcare)6 Iope (AmorePacific Corp)7 The History
of Whoo
(LG Household & Healthcare)8 SU:M37 (LG Household &
Healthcare)9 SK-II (P&G)
10 Isa Knox (LG Household & Healthcare)Source: Euromonitor
International
-
Insi
ght South Korean brands
n n n AmorePacific, in particular, is rapidly expanding
internationally, not just in Asia, but also in North America, where
Laneige recently launched in Canada via Sephora stores, following
its successful introduction in the US in 2014. Other brands are
also making inroads stateside. Dr Jart+ (in which Estée Lauder
Companies (ELC) announced in October that it had made an
investment), and TonyMoly, for example, are sold by Sephora in the
US. The influx is also being driven by the arrival of a handful of
websites like Momomango, Soko Glam and Peach and Lily, which offer
K-Beauty brands to US consumers.
K-beauty acquisitions lie aheadThe popularity of Korean brands
both at home and abroad is expected to lead to more acquisitions of
these players. Indeed, ELC’s investment in Dr Jart+ is expected to
be the first in a wave of such transactions. “South Korean brands
can bring a new impetus to the market, a new routine, and can
recruit new customers,” says Bernardin. “Korean brands and products
have less of an ‘Asian’ image [than brands from other countries in
Asia], because Korean culture remains quite a vague concept in
people’s minds. There will be further acquisitions, there are
brands that everyone is looking at,” she adds.And since
international brands have traditionally struggled to carve out a
place in
the market, acquiring a brand is one way in, Roll adds. “The big
players are dying to know what’s going on inside South Korea, and
one way to really get inside the Korean growth engine is to acquire
a brand; you’re going to see that accelerating more over the years
to come,” he comments.Targets, however, may be hard to come by. A
few months ago, rumors abounded
regarding make-up brand Too Cool For School, while other
independents include make-up artist brand Son & Park, eyeliner
specialist Clio, lip color brand Peripera, as well as TonyMoly and
Holika Holika. But the pace of growth, and the creation of more
entrepreneurial startups in such a fast-paced environment, is
likely to mean that within a few years, more potential targets
could make the list longer. “You are going to see a surge of new
brands,” says Roll. “Not in the hundreds, but in the dozens, and
some of them will be winners, and scale to a level where they make
sense and become attractive [as acquisition targets].”As to the
fast-paced rate of innovation,
one of the attractions of the Korean market right now, it looks
set to continue for some time to come. “Koreans are great at
innovation, they take that very seriously. In terms of R&D
[investment] related to GDP of the country, it’s one of the highest
ratios in the world,” says Roll. All this comes together to suggest
that for the foreseeable future, South Korea is likely to remain an
epicenter of the cosmetics universe, bringing growth to the
industry—both at home and abroad. n
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 12
The big players are dying to know what’s going on inside South
Korea, and one way to really get inside the Korean growth engine is
to acquire a brand; you’re going to see that accelerating more over
the years to come
“
”Martin Roll Company ceo Martin RollKorea: a tough market for
international players Part of the problem in Korea for
international premium brands has been their reliance on the
department-store channel, which continues to struggle, according to
observers. “The market is saturated in terms of the brand offer.
There is a plethora of brands, and I don’t know how the consumer
finds her way among the offer on the market,” says France-based
consultancy Inspiration & Information general manager Florence
Bernardin. “Department stores are saturated, and sales are
sluggish, because there is a race for price. Korean women are very
careful spenders,” she comments.Meanwhile standalone stores, the
internet, home shopping
and beauty boxes are all strong channels competing for part of
the beauty pie, she says. Local players are generally present in a
combination of these channels.
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 13
Despite a slowdown in many Asian markets, organizers of beauty
trade show Cosmoprof Asia said that this year’s event was a record
edition. Some 63,241 visitors attended, growth of 5.5% on last
year. There was a significant increase in visitors from the US and
Europe, as well as from emerging markets, such as Chile, Thailand,
Ukraine and Vietnam. The show hosted 2,504 exhibiting companies, up
6% from 2014. Cosmoprof Asia director and UBM Asia executive vice
president Michael Duck
commented that the expansion of the show reflects the
development of business in the region and said that growth will
continue despite a tougher economy in key countries, such as China.
“There is no doubt that China will continue to grow. The recent
economic problem is a big blip, but overall the trend is upwards,
because cosmetics have become a necessity for the Chinese. There
are also new big players like Korea and Japan, marketing into China
and ASEAN, which has changed a lot. People come to the show for
trends just like they did 20 years ago, but the difference now is
that there is a lot more to see.”There were two new areas at the
show to highlight key trends in the region. Spot on
Beauty covering 3,700m2 (39,826ft2) was dedicated to companies
focused on finished products for the spa and wellness, hair, nail,
cosmetics and personal care sectors, while Discover Trends
showcased products from three fast-growing segments: natural and
organic, baby care and men’s grooming. Masks and small-format
packaging were also key trends. Given the growth of Cosmoprof Asia,
next year’s edition will have a different format
spread across two venues and will last for four days instead of
three. From November 15-17, the Asia World Expo will host
exhibitors of ingredients, machinery and equipment, packaging,
contract manufacturing and private label. From November 16-18, the
Hong Kong Convention & Exhibition Centre will host exhibitors
of finished products.
BW Confidential reports on what was seen and heard at Cosmoprof
Asia, which took place in Hong Kong from November 11-13
Trends from the East
Cosmoprof Asia
Show
rev
iew
Cosmoprof AsiaTook place: from November 11-13 in Hong KongNo of
visitors: 63,241, +5.5% vs 2014No of exhibitors: 2,504, +6% vs
2014
Heard in show: industry players on Asia
“There is still great potential in countries like Japan,
Malaysia and Singapore. China is doing well, but the target is the
low, rather than high end, as consumers there are looking for
high-quality products, but are very price conscious.”Caseti project
management executive Bryan Wong
“In China we need to take into account a new channel: Wechat as
a distribution channel is definitely a reality. Tier-three,
tier-four and tier-five cities are growing the fastest and local
brands are more familiar with these cities than international
players and they are looking to merge to become stronger
there.”Intercos strategic marketing manager Asia Anna Dato n n
n
There is no doubt that China will continue to grow. The recent
economic problem is a big blip, but overall the trend is upwards,
because cosmetics have become a necessity for the Chinese
“
”Cosmoprof Asia director and UBM Asia executive vp Michael
Duck
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
www.bwconfidential.com - www.bwconfidential.com - December 3-16,
2015 #121 - Page 14 - Page 14CONFIDENTIAL CONFIDENTIAL
CONFIDENTIALCONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIAL
CONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 14
Show
rev
iew Cosmoprof Asia
Show
rev
iew Cosmoprof Asia
n n n “The market has changed considerably over the past five
years: brands are attracted by more premium packaging, and there
are more Chinese brands in this premium market; this is very new.
Our biggest challenge is to offer sophisticated and complex
packaging within a short period—time to market is becoming the most
important asset.”HCP Packaging France president Eric Firmin
“Dual, multifunctional and easy-to-use products are more
important in Asia, with waterproof and smudge-proof products also
popular. Demand from Asia is becoming more sophisticated; there are
more Asian trendsetters, led by Korea.”Schwan Stabilo Cosmetics
area sales manager Jeena Park
“[Traditionally] China is not a fragrance market, but things are
changing with an increase in domestic consumption of perfumes. We
win more and more projects with big Chinese manufacturers because
they don’t trust local producers. Although this means that they
need to import, which increases the price and lead time.” Parfex
area sales manager Alexandre Levet
“The attitude to fragrance among Asians seems to be changing.
Before there was no offer designed for them—it was either cheap
fragrances or high-end products like Chanel. They have not been
exposed to fragrance that much, but this is evolving.”Centdegres
design director, managing partner Elie Papiernik
“Asia, especially China, is becoming more mature and
appreciative of high technology and safe products. As the Chinese
market is going upscale, Asian consumers realize the good
price-quality ratio of French products. This demand for higher
quality is a trend that will keep growing.” Cosmetic Valley export
& communication director Franckie Venet
“In China, although consumers have more disposable income, they
make informed purchases and a lot is done online. Brand awareness,
social media and key opinion leaders are important to develop the
Chinese market. Managing a new Western brand in China is definitely
not an easy job.”Zwilling Beauty Group APAC business development
manager Oliver Hart
“Asian consumers’ shopping habits have changed noticeably. As
incomes have risen, they are becoming more Westernized and
sensitive to quality. They have increased spending on cosmetics and
healthcare products and are willing to pay premiums for
high-quality goods.” Genie-S vice president Ralph Bou Nader
Seen in showThere were a wealth of natural products at the show.
These included Wedge Australia, which presented an anti-aging daily
moisturizer specifically designed for men and made from seaweed and
organic olive oil; Lafe’s Natural Bodycare, which showed a n n
n
-
Show
rev
iew Cosmoprof Asia
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 15
n n n range of sustainable personal-care products (deodorant,
babycare, haircare) that claim to be free of glycols, parabens,
synthetic fragrances and chemical preservatives, and New
Zealand-based Supreme Biotechnologies, which exhibited Astas True
Radiance, a product that features natural antioxidant Astaxanthin
to target skin aging.
Chinese company Zhongshan Honghai Plastic Technology presented
its patented Fruit Mask Machine to capitalize on the growing trend
for masks. The patented appliance can be used by consumers at home
to make masks from fruit and vegetables.
UK-based brand Below The Belt claims to have come up with a new
segment in the men’s market. The company says that its products are
specifically designed to “recognize the issues men face below the
belt”. The range comprises three products for the groin area: Fresh
and Dry Balls, a gel texture anti-perspirant; Waterless Shower, an
on–the-go cleanser, and Sports Lubricant, a moisturizer.
Korean company Greencos presented its 5-in-1 Deoproce UV
Waterful Cushion SPF 50+ PA +++, to take advantage of the trend for
multi-functional products and cushion cosmetics. The make-up
product, which comes in powder form, also claims to moisturize and
offer UV protection, anti-wrinkle benefits and whitening
properties.
Korean brand Ahvogo showed convenient packaging for its
anti-acne products. The products come in capsule formats and target
teenagers. They are currently sold only in Korea.
Korea-based Salty Family Group presented the Real Egg Pack, a
set of eight egg-like mini capsules that whiten and moisturize the
skin. The product launched in 2015 and is distributed in Korea,
Hong Kong and China.
Brushonblock presented its eponymous refillable sunscreen
product in the form of a brush. It costs $30 ($16 for a refill) and
is sold online, in spas and at dermatologists in the US, UK,
Belgium, The Netherlands, Malaysia, Philippines, New Zealand and
Australia.
US-based company Careplus Skin Care presented the Sonulase LED
red light cleansing brush. The beauty device combines light therapy
to stimulate collagen production. Also on show was UV Cleanlight, a
multifunctional product combining light therapy, UV Cleanlight
Technology and exfoliating bristles, and which claims to remove
impurities, kill bacteria and act as an exfoliator.
Taiwanese company Hair O’right presented the Tree in a Bottle
line. The formula uses recycled coffee beans and the brown color of
the recyclable plastic packaging is created using natural coffee.
Each bottle includes three coffee beans that can be planted
together with the packaging after use to grow a tree. The range
consists of more than 100 products in the shampoo, conditioner,
body wash, hair tonic and hair styling categories. The newest
addition is “O’right hair tonic for her”, a product made of 96%
natural ingredients addressing female hair loss. n
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
Stor
e vi
sit
Chanell Opened: October 2015l Location: Paris, France
l Size: 72m2 (775ft2)l Special features:
make-up stations, men’s area, seasonal installations,
staffed by make-up artists and fragrance experts
Chanel has chosen to move outside its familiar quarters in
Paris’ Golden Triangle and set up shop in the trendy Marais
district for its first permanent beauty standalone in the French
capital. The brand describes the decision as a desire to tell its
story differently, and as a nudge towards the irreverent spirit of
brand founder Gabrielle Chanel.The 72m2 (775ft2) space at 40, Rue
des Francs-Bourgeois is housed in part of a former
private mansion, and combines elements of historic architecture
with contemporary design features. Its walls are a stark white, but
are transpierced in places with bare stone sections. The floor is
made of traditional ‘tomette’ clay tiles, worn with age, and an old
well and black metal supports are also integrated into the design.
Product displays are also formed from black metal, and appear
suspended from the ceiling. Mirrors, meanwhile, play an integral
role in the design, with a reflective ceiling as well as round,
porthole-like mirrors of various sizes that are peppered around the
walls.The store is designed to encourage customers to stay and
discover more about the
brand, and features make-up stations permanently staffed by
make-up artists and fragrance experts on hand to offer advice.
Specially created leather sofas inspired by those in Chanel’s
private apartments on Rue Cambon encourage customers to relax, as
do a selection of books, some of which are for sale, others just to
be read in situ. A boudoir-like men’s space offers the brand’s
masculine fragrances and doubles up as a private area for
workshops. The whole space is designed to be adapted with new
seasonal installations, and one
wall is reserved for new artistic interpretations of brand
imagery and iconic products from Chanel’s creative team. Chanel’s
existing beauty standalone in Paris, a pop-up on Rue Saint-Honoré,
is set to close before the end of the year. n
Chanel has just opened its first permanent beauty standalone in
the French capital
Moving house
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 16
-
CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL
CONFIDENTIALCONFIDENTIAL
www.bwconfidential.com - December 3-16, 2015 #121 - Page 17
Stor
e vi
sit
s Store fittings are suspended from the ceiling in Chanel’s new
beauty space
s Mirrors play a key role, both in the ceiling and as round,
porthole-like features on the walls
-
BW ConfidentialThe inside viewon the internationalbeauty
industry
News headlines every day
bwconfidential.com
The print magazine
Four times a year
Please complete this form and return it:
• by post: BW Confidential - Subscription Department 4 avenue de
la Marne - 92600 ASNIERES France• by fax: +33 (0) 1 53 01 09 79• by
email: [email protected]
Subscription order form
+ Free: each subscription includes full access to the entire
contents of BW Confidential’s archives on
www.bwconfidential.com
Payment method r € r US$
r CB, Visa, Mastercard/Eurocard l_l_l_l_l l_l_l_l_l l_l_l_l_l
l_l_l_l_l Expiration date: l_l_l_l_l Security code l_l_l_l
r American Express l_l_l_l_l_l l_l_l_l_l_l_l l_l_l_l_l
Expiration date: l_l_l_l_l Security code l_l_l_l_l
r Please bill me
Contact information
Company:............................................................................
First
name:..........................................................................
Last
name:..........................................................................
Job
title:..............................................................................
Address:.............................................................................
Postal
code:........................................................................
City:....................................................................................
Country:..............................................................................
Email
(required):..................................................................
VAT number (required for European
Union):..................................
Signature & date:
Subscribe for 2 years and save 20%
#
2015
- O
ffer v
alid
unt
il Fe
brua
ry 2
9, 2
016
Every two weeks
The electronic publication
r 2 year subscription €799 or US$1,099 • the electronic
publication (40 issues) • daily news on www.bwconfidential.com •
the print magazine (8 issues)
r 1 year subscription €499 or US$699 • the electronic
publication (20 issues) • daily news on www.bwconfidential.com •
the print magazine (4 issues)
Yes, I want to subscribe to BW Confidential
r 2 year subscription with thematic guide €879 or US$1,199 • the
electronic publication (40 issues) • daily news on
www.bwconfidential.com • the print magazine (8 issues) • the
thematic guide (1 issue per year)
r 1 year subscription with thematic guide €549 or US$769 • the
electronic publication (20 issues) • daily news on
www.bwconfidential.com • the print magazine (4 issues) • the
thematic guide (1 issue)
CommentThe buzz: News roundupNetwatchInterview: P&G Prestige
vice president of global marketing development and operations Jose
Maria MarquieguiInsight: South Korean brandsShow review: Cosmoprof
AsiaStore visit: Chanel's beauty standalone, ParisSubscribe to BW
Confidential