What did the Top 6 cosmetics makers do in the second half of 2018?
We’ve summed up the first half of 2018, and now we’re giving a rundown on what the top six cosmetics companies (ranked by sales) were up to in the latter half -, zooming in on their digital strategies and business developments.
Looking back at 2018 overall, many companies aspired to keep up with consumer trends such as natural cosmetics and corporate transparency through information disclosure. The year was also characterized by the growing influence of the millennial generation on shaping global consumption. While the first half of the year saw corporate transparency and ethics in the spotlight, the latter half shone the light on statements of diversity, particularly in relation to LGBT and race.
In terms of utilizing digital technologies, the strategies of each company greatly differ. L’Oréal, in search of the next technology ripe for growth, is increasing their establishment of CVC (corporate venture capital) and injecting funds strategically. Estée Lauder is invigorating their personnal training in the digital field. Unilever is actively making use of digital to contribute to solving ethical and societal issues. Also, P&G and Coty are both involved in digital promotions related to similar issues, which are garnering support from consumers, and they’ve also announced their backing of organizations that are calling for the abolition of animal testing in the cosmetics industry. Meanwhile, 2018 was also a year where each company made moves to try and capture the prized Chinese market.
So, let’s take a closer look at what the top six companies were up to in the latter half of 2018.
1st L’Oréal
Aiming to improve the customer experience and searching for the next hit technology
Positioning themselves as a beauty tech company, L’Oréal has been injecting funds into ModiFace and their other subsidiaries’ technological developments, while also striving to create new types of customer experiences.
In the latter half of 2018, they released different wearable products through separate tie-ins with Facebook and Apple. They also set up CVC that took a minority stake in innovative startups, and strengthened connections with ventures around the world extensively, including investment in African tech companies.
In order to gain an upper hand in the global shift towards natural cosmetics, L’Oréal purchased two pioneers of the field in Europe, Logocos Naturkosmetik from Germany and Societe des Thermes de la Roche-Posay from France. As subsidiary Garnier’s previous offering of a natural cosmetics line-up ended in failure, whether L’Oréal can create an appropriate presence in the global natural cosmetics market will depend on how they can position themselves with their purchase of Logocos.
2nd Unilever
Directing corporate resources into the wellness and natural fields
Unilever is a company actively utilizing digital technology to help solve ethical and societal issues, and they’ve continued this path. Out of the top 10 beauty companies in the world, they were the first to announce their backing of Humane Society International’s #BeCrueltyFree campaign, of which aims to end the cosmetics industry’s testing on animals within the next five years.
With the growing global trend towards higher levels of health awareness, Unilever is also reinforcing their investment in the fields of wellness and natural cosmetics. They completed an acquisition of a 75% stake in Italian natural personal care and nutritional supplements brand Equilibra, and bought out Indian nutritional supplements company GSK and Dutch maker of meat-substitutes, The Vegetarian Butcher.
The recent changeover of CEO from Paul Polman to Alan Jope (who previously headed the Beauty & Personal Care Division) comes against the backdrop of a consumer goods industry that’s currently undergoing a facelift. Along with the food industry, it’s being threatened from all angles, with Amazon and Tencent’s WeChat increasingly becoming important markets.
3rd Estée Lauder
Active investment in digitalizing the training of personnel
In August, Estée Lauder announced their offering of a personalized online learning platform in cooperation with LinkedIn, and this caused a stir as the world’s first partnership between LinkedIn Learning and a beauty company.
Their reputation as a workplace that values its employees has also been receiving high praise — they made employment website Indeed’s list of the 50 most top-rated workplaces and were appointed the Best Employer for Women by Forbes.
While there wasn’t any standout activity from them in the fields of digital or business development in the latter half of 2018, we did see them make some steady efforts such as hosting a hackathon and adopting 3D printing technology.
4th Procter & Gamble (P&G)
Focusing on their own independent digital marketing campaign
In the first half of 2018, P&G announced a reduction in expenditure of mass-market digital ads with a view to protecting themselves from the problems of brand defamation due to morally-dubious online content.
Accordingly, in the latter half of the year, they focused on their own independently-led marketing campaigns. These included the appointing of a “Fearless Nine” group of influencers from diverse backgrounds to launch the Olay #FaceAnything campaign which proved to be a hit. The campaign’s theme of focusing on your own role as an individual human being rather than on the shackles of your gender, along with the influencers’ stories, received an enormous response and their Instagram engagement rate exceeded 8%.
5th Coty
Utilizing technology and an approach towards diversity
The biggest news coming out of Coty in the latter half of 2018 was the changing of their CEO.
The company battled to unify the 41 brands they bought from P&G in 2016, including CoverGirl, however, due to supply chain problems that became difficult to achieve straight away. Their fragrance and “Professional Beauty” businesses have been in good condition, but brands such as CoverGirl, Clairol, and Rimmel have seen worse than expected performances.
Coty’s stocks in 2018 saw a drop of over 50%, and in November then-CEO Camillo Pane stepped down. The appointed successor is Pierre Laubies, former CEO of a major global coffee corporation and a specialist in the fields of sales and accounting in the consumer goods industry.
Coty handles a wide range of goods, from low-priced mass-market cosmetics sold in drug stores to luxury products that include perfume brands from Gucci, and up until now they’ve expanded the market through sales from company buy-outs. While many rivals concentrate on expanding their prestige brands, over 40% of Coty’s sales are from mass-market products. The market is waiting to see how Coty will manage to turnaround its line-up of businesses and pave the way for future growth.
In China, Coty is also involved in a number of activities, such as teaming up with Alibaba to install beauty vending machines in major cities and also partnering with the Tmall Innovation Center to develop products aimed at the Chinese market.
6th Shiseido
Regarding an increased presence in China as a crucial point
In March, Shiseido announced a new three-year plan to accelerate their growth into a global beauty company.
Accordingly, in the latter half of the year, they put an end to the brand Dicila, no longer considering it a focus or option for their brand business. Also, along with reinforcing their business in China by setting up their “China Business Innovation and Investment Representative Office” in Shanghai.
Meanwhile, they released a new mascara to push their second shot at Cosmetic Press — a project where limited-edition items are sold in short periods — in Japan and this was part of their efforts towards open-innovation aimed at capturing the Gen-Z market. In this way, they’re continuing their project to turn urban trends directly into products and services.
On top of this, Shiseido is also contributing venture funding to early-stage startups in the US in a move to try and gain advantageous access to leading startups that are working on the next big thing.
Text: Ching Li Tor
Original text (Japanese 1 & 2): Yukari Akiyama
