With the release of the 2021 financial results of Shiseido Group and L'Oréal Group, the transcripts of all major beauty groups in the world last year were finally fully presented.
2021 is a year of regroupment, even if the emergence of the new crown variant virus has caused a certain impact on people's living consumption, but the sales and profits of these beauty groups have increased significantly compared with 2020, when the epidemic lockdown was the most severe, and have basically returned to the level before the epidemic, or even improved. Combining the sales data of fiscal year 2020 and fiscal year 2021, the industry trend in 2022 can be seen.
For example, the Shiseido Group's sales in 2021 increased by 12% year-on-year to 1.035 trillion yen, and net profit reached 42.4 billion yen, turning a profit, while L'Oréal Group's sales in 2021 increased by 16.1% year-on-year to 32.28 billion euros, an increase of 11% compared to 2019 before the epidemic, and operating profit increased by 18.3% to 6.16 billion euros, a record high.
In addition, Estée Lauder Group and Coty Group have released Q2 financial reports, that is, the results of October to December 2021, showing strong growth in the second half of last year. Estée Lauder Group's Q2 net sales increased 14% year-over-year to US$5,539 million and Coty Group's Q2 net sales increased 12% year-over-year to US$1,578 million.
Not only that, some multi-brand giants such as LVMH, Johnson & Johnson, Procter & Gamble, Unilever, etc., their beauty products divisions, also achieved a good performance. Among them, LVMH's perfume and cosmetics division sales increased by 26% year-on-year to 6.608 billion euros, perfume rebounded strongly, and skin care products developed rapidly.
The reason why the beauty industry can quickly turn around from the trough, in addition to the impact of the recovery of consumption, is also largely due to the advanced business senses and product innovation of these top groups, and in the post-epidemic era, they have mastered the changes in consumer lifestyles and values. In their respective financial or market reports, they can get a glimpse of the new trends in the beauty industry last year or the new direction of development in 2022.
As part of its accelerated digitalization process, the Shiseido Group said in its annual report that it has launched a pilot project related to Metacosm, focusing on its beauty brand Nars and targeting gen Z youth.
In 2021, Nars partnered with three different games and piloted metaverses, namely Zepeto, Asia's largest metaversal platform, Animal Friends, and virtual dressup game Drest. Nars' virtual products and brand identities are presented in the game in a way that transcends reality and interacts with players in real time to engage the game's target consumers.
In addition, last August Nars launched the first NFT series of digital collections on the NFT trading platform Truesy. Commissioned by Nars, three artists from different fields each created digital artwork inspired by the Blushes from the Nars Orgasm collection, in honor of National Orgasm Day on July 31.
Nars launches the first NFT series of digital collections
It is worth noting that some digital artworks also include Nars's limited-edition blush physical products, further increasing the scarcity and uniqueness of related products.
Essentially, metaversities and even NFTs are a digital marketing approach for brands to the next generation, rather than really virtualizing products. As Dina Fierro, vice president of global digital strategy at Nars, puts it, it's a fun, creative experience around the development of Nars' core products.
Not only the Shiseido Group, but also Elf Beauty, Givenchy Beauty, Look Labs Digital Perfume, Estée Lauder Group's Clinique, etc., have successively issued non-homogeneous tokens NFTs. Among them, Clinique adopts the method of reward gift for distribution, through social media topic interaction, selects the winners, gives away NFT digital collections, gives away out-of-print products, and uses 10 years of Clinique's new products for free.
Clinique NFT Digital Collection
Clinique's approach further suggests that, at least for now, the virtual world is endorsing real-world product loyalty and sales. Of course, this is not the original intention of the metaverse, and in the near future, the metacosm and NFT have a broader commercial space and more diverse application methods, waiting for beauty brands to explore.
In 2021, L'Oréal's luxury division generated sales of €12.34 billion, up 20.9% year-on-year, surpassing the consumer goods division as the group's largest division.
In particular, L'Oréal Group pointed out in its annual report that HR Helena, Lanc me Absolue Pure Anti-Aging Series, and Kiehl's Retinol Anti-Wrinkle Firming Serum are three brands or product lines that perform well in the skincare field.
Lanc me and Kiehl's are both anti-aging product lines mentioned, while HR Helena's target consumers and star products are also mainly around the need for anti-aging and anti-aging. The ingredient "Black Tech" is the biggest competitive segment between anti-aging products, and these brands cover two important anti-aging ingredients: Bosein and A alcohol.
HR Helena's anti-aging products
In fact, with the development and growth of "ingredient party" consumers, people are less and less impressed by the exquisite outer packaging of skin care products, but further pay attention to and study the active ingredients in them, which is also the main reason for the recent popularity of original liquids, cosmeceuticals and other categories.
Deciem, a Canadian beauty company funded by Estée Lauder Group last year, is one of them, focusing on active ingredients and cost performance, simplifying packaging, and the brand still has a huge potential to roughly double sales in the sluggish 2020. It can be seen that brands that have made a difference in ingredient research and development have an absolute market advantage.
Popular deciem products
As a patented exclusive ingredient of L'Oréal Group, Bose has been proven to effectively promote the synthesis of collagen, and after successful research and development, it has been applied to many brands of the group, and began to shine in the market around 2018. All products with bosein labels are almost all the star products of the corresponding brands, which are enthusiastically discussed and purchased by consumers.
For example, HR Helena's main high-content Bose because of the cream, 50ml sold for up to 3580 yuan, is still being snapped up, the data shows that the cream on Tmall last month sold 3000+, the number of reviews 20,000+, the little red book discussed more than 40,000 related notes.
However, Bose is not a monopoly, due to high pricing and long-term monopoly, so that other anti-aging active ingredients have the opportunity to rise, such as A alcohol, peptides and so on. Among them, A alcohol is also known as retinol, "morning C late A" refers to the morning vitamin C, the evening use of A alcohol, e-commerce platform Vipshop data show that in 2021 "morning C evening A" search volume increased by 5016.3% year-on-year, driving related product sales increased by 4451.5% year-on-year.
In fact, A alcohol was widely recognized by the beauty industry as early as the 1970s, but it has only gained a lot of popularity in recent years, especially in the Chinese market, which is closely related to today's rich social media ecology, allowing the "ingredient party" to show their hands and feet, share, research and exchange. On social media, not only a large number of KOLs for professional analysis of ingredients have emerged, but even apps and mini programs that focus on ingredient analysis such as true self, beautiful practice, and transparent sticky notes have emerged.
Obviously, today's consumers have become more savvy and pragmatic in skincare, influenced by social media, coupled with a cautious post-epidemic consumption view, people will not be easily confused by advertising and product appearance, and directly study the essence. In this way, with the continuous research and updating of skin care technology, perhaps the foothold of skin care products in the market will change from brand image to specific scientific ingredients in the future.
The fragrance category has long been the most important product line of the Coty Group, and in its Q2 financial report for fiscal years 2022 (July 1, 2021 - June 30, 2022) and its annual report for fiscal year 2021 (July 1, 2020 - June 30, 2021), Ctoy Group has mentioned several times the significant contribution of perfume sales to the Group's profit growth.
Q2 sales in the luxury division rose 12% to US$1.008 billion, with sales of perfume products surging 40% and Gucci Flora Gorgeous Gardenia and Burberry Hero, two newly launched star perfume products, ranked well, especially in the two major consumer markets of North America and China, which Coty Group called "key innovations".
Burberry Hero perfume
In addition, Coty Group said it is continuing to advance its sustainability strategy, announcing in March 2021 a partnership with biotechnology company LanzaTech to jointly develop high-purity sustainable ethanol made from recycled carbon, with the goal of using the technology by 2023, when most of its ethanol feedstocks for perfumes and beauty products are used, including products licensed and distributed by luxury brands such as Gucci.
The Coty Group thus became the first company in the perfume industry to adopt carbon-recovered sustainable ethanol. In January, Coty's facility received more than 20 tons of ethanol from LanzaTech, and perfume products from these sustainable ethanol products will be available during the year. The entire production process will greatly reduce the amount of water used, reduce the demand for agricultural land, and greatly reduce carbon emissions.
The combination of fashion and sustainability is already a trend in the industry, not only to improve the reputation of brands, but also to consider consumers when purchasing goods. According to Common Thread data, the market size of the "natural" type of cosmetics is increasing year by year, and its global market value is expected to reach $54.5 billion by 2027.
The trend of environmentally sustainable consumption and design was already very obvious before the outbreak of the epidemic, and now people's values have been further transformed under the reflection of the epidemic, paying more attention to ecological balance and pursuing a low-carbon lifestyle. As an important part of life, the sustainability of perfumes, skin care, makeup and other products has gradually become a must for brands.
Flagship sustainable skincare brand Floragy
In fact, the application of sustainability in cosmetics and personal care is very extensive, and a large number of niche beauty brands with environmental protection as the core have been born in the market. In 2018, Unilever launched its first sustainable brand, Love Beauty and Planet, which uses 100% recyclable materials for product packaging; lipstick brand Axiology rejects any animal testing and animal-derived ingredients; and 2019,019 skincare brand Floragy supports 100% veganism and cruelty-free.
Perfume products are slightly inferior in this regard, but there are still a large number of brands exploring forward. British perfume brand Floral Street says that from packaging, ingredient production, to suppliers, it will choose those sustainable partners, such as pulp packaging can be 100% composted or recycled, completely vegan and does not use animal musk, etc.; Boy Smells Tantrum perfume obtains essential oil raw materials from industrial waste; SanaJardin is one of the first luxury eco-friendly perfume brands, committed to women's rights and eco-friendliness.
Boy Smells Tantrum perfume
The addition of new players in environmental protection and the rapid changes in the market have brought challenges to mature groups, and consumers will always expect giants to pay more efforts on environmental protection issues.
It has to be admitted that the environmental protection initiatives implemented by start-up brands focusing on sustainability are more professional and comprehensive, and sustainable innovation can be carried out in all processes of commodity production. For the beauty giants that lead the whole body, especially those classic perfume products that have long been stereotyped, sustainable reform is undoubtedly full of obstacles, raw materials, production, testing, packaging and other links will face the torture of consumers and the market.
These three important trends, without exception, are an unusually strong manifestation of consumer behavior and demand. The personality-driven Gen Z mindset, the mix of social media platforms, and deeply rooted sustainable values are all helping consumers continue to "plunder" the voice of beauty giants and brands. People are anti-customer-oriented and focus on the goods themselves, the way brands provide consumer experiences has been reversed by the environment, or no longer unique, and the fate of the beauty industry and other industries is connected and in the hands of every consumer. WWD
Written by Jesse
Editing Norn, yalta
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