Beauty Giant — Coty Responds to War in Ukraine

Charles Tang
Marketing in the Age of Digital
3 min readMar 27, 2022

How is the beauty industry taking a stand towards the war in Ukraine and supporting the people affected?

Starting from February 24th, the war between Russia and Ukraine, and what the people in Ukraine are going through, is hitting so close to home for so many. Top global beauty companies are taking a stand alongside the rest of the world in support of Ukraine — and supporting their employees both in Ukraine and Russia.

Coty, a world leader in beauty and home to an illustrious roster of cosmetic, skincare and fragrance brands, headquartered in U.S., has gained a lot of controversial attentions for late response to the warfare. Many press media and individuals are expressing their concerns and fury about Coty’s inaction until March 9th.

Coty made their first public announcement on March 9th, stating that “Coty stands firmly with the millions of people impacted by the war in Ukraine and joins all those calling for peace.” Moreover, Coty made it clear for the first time that they “do not operate any stores, sales counters, e-commerce sites or industrial activities in Russia.” Also, Coty plans to seek partnership and collaboration with International Committee of the Red Cross (ICRC) and the UN High Commissioner for Refugees (UNHCR) with financial donations and are donating essential personal hygiene products to refugees. Despite the clear announcement, there are still some criticizing voices on the social media.

Two days ago, March 25th, Coty updated their latest moves, saying that they have already launched Refugee Employment Program, joint with Randstad, Coty’s global HR partner, to support Ukrainian Refugees and their families. The program is going to help provide job opportunities at Coty for those displaced by the war in Ukraine. Coty once again emphasized that they are not involved in any business in Russia after the war burst out, including suspending all shipment of products into Russia and all commercial activities, like distributions, investments as well as media, brand and advertising initiatives.

Let’s take a look from the business perspective. Coty, which owns the beauty brands CoverGirl, Rimmel and Max Factor, gets 3.1% of its revenue from Russia and Ukraine. Based on a global equity research provided by J.P.Morgan, Coty has been categorized into the stock underperformers list due to effects of higher oil prices, supply chain, etc.. The war in Ukraine and the impact of sanctions on Russian consumers have cast a shadow over the market investments on global companies. One of Coty’s main competitors, Estee Lauder, also suffered an approximate 2.7% revenue exposure regarding their business in Russia and Ukraine.

Russia/Ukraine Revenue Exposure Screen, Source: J.P.Morgan

Although the cost is painful, it is still great to have such giant companies to take a bravery and smart stand in response to the crisis. Unlike some companies directly stating against any party involved, Coty phrased it as standing with the people and those calling for peace, an effort to maximally mitigate the impact from the war. However, since their announcement was a little bit later than the others, there were several reputation damages already. Now it’s time for Coty to figure a way out to cover their financial loss in Russia and Ukraine markets, fixing their brand figure while still caring about the refugees and employees in the war zone.

-Charles

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Charles Tang
Marketing in the Age of Digital

Marketing product is easy, marketing people is hard. I invest in people rather than business. Charles=(Finance+Python/R/SPSS+Fencing+Philosophy)xMarketing