CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

Comment Sustainable competition Inside 2 Retail insights 3 Tech bytes Netwatch 4 Trending Companies to watch

5 Data Around the world 6 Interview Pola Orbis Holdings director and vice president Naoki Kume

7 Zoom in on Subscription models for beauty

9 Seen in show Cosmoprof Asia

13 In case you missed it

For almost 20 years, beauty ceos’ favorite word has been innovation. But as one industry executive recently told BW Confidential, sustainability, just in the past

year, has almost replaced innovation as the new buzzword in senior management circles. Indeed, the race is on among beauty brands to show that their manufacturing processes, products or packaging have more sustainable credentials than those of their competitors. This would seem to be only positive for consumers and the planet. But at the same

time, beauty hasn’t exactly had a head start when it comes to environmental issues, and some continue to question how the industry approaches sustainability. For example, brands will come out with a product that has a real sustainable benefit, such as using lighter materials, only to spoil the impact by adding what could be perceived as superfluous outer packaging, boxes or wrapping. Or competing brands will invest and work individually on proprietary projects where an industry-wide solution would be more sustainable, and in many cases, easier to implement. Take fragrance refills, for example. Several brands have recently come up with their own devices or machines to refill their fragrances in-store, when it probably would have been simpler for a retailer to have a generic machine that could refill any fragrance it sells. Sustainability may be the new buzzword, but fierce competition still rules the market.

#199

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 1

The leading publication on the international beauty industry

Subscribe

Follow us on:

Oonagh PhillipsEditor in Chiefophillips@bwconfidential.com

BEAUTYINSIGHT

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

Retail insights• Online media company PopSugar is building relationships with its millennial audience offline through a holiday pop-up shop. Opened on November 23 in New York City, the store offers brands such as Elf Cosmetics, activewear brand Athleta and Nature’s Way supplements. It also features a meditation den, yoga classes and an interactive holiday shopping market.

• Athletic-apparel company Nike’s departure from Amazon has sparked speculation that other brands may stop selling through the e-commerce giant. Nike reportedly listed its products with the platform in 2017 to battle counterfeiting, but found the partnership unfruitful and has stated it will focus on more direct, personal relationships with consumers. • UK retailer John Lewis has opened a new store concept in Southampton, UK which it says ‘reinvents’ the department store, by focusing on a new experience. In-store specialists advise on topics including beauty, fashion and wine, ‘stay and play’ areas let customers experiment with make-up or gadgets from different brands and a personal styling package with a makeover, manicure and brow treatments is also available.

• Pinterest rolled out online marketplace Pinterest Shop to coincide with Small Business Saturday on November 30. The marketplace showcases smaller merchants that sell products on the platform and displays Product Pins, or shoppable posts, from 17 hand-picked merchants with a focus on creativity and craftsmanship.

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

NEW

Beauty & Travel Retail

Special Edition TFWA Cannes Review 2019

• Talking points

• Brand & retailer views

• Regional & category analysis

• Innovation Lab

Included in your subscription

San Francisco-based Tribe Dynamics shares exclusive data about beauty trends and brands making waves on social media

Urban Decay enjoys buzz around new Naked Honey Eyeshadow PaletteWhile it narrowly missed the Top 10 in France in September with $1.8m in earned media value (EMV), Urban Decay boasted a notable 93% month-over-month growth. Influencers rallied around the new Naked Honey Eyeshadow Palette, which powered $342.3k EMV from 21 content creators as the brand’s number-one product. Retailer Sephora

France (@sephorafrance on Instagram) contributed a significant $135.9k of this total promoting the release across four posts. The Naked Honey palette also featured widely in influencer giveaways, with mentions of #concours (giveaway) accounting for $40.9k EMV of the palette’s total.

Tribe Dynamics is a San Francisco-based software company that helps beauty, fashion and lifestyle brands drive and measure digital earned media at scale. For more stories and rankings of top brands and products in international beauty, check out Tribe Dynamics’ September Tribe Top 10 report for France here.

Tech bytes

• Japanese apparel brand Uniqlo has launched StyleHint, an app that lets users recreate looks they’ve seen online. Created in partnership with design firm I&Co, it uses Google’s Cloud Vision image analysis. Users upload photos of clothes—for example screenshots from social media—and the app will match them to similar styles on the site.

• Instagram has released shoppable holiday collections based on the year’s top trends. The collections are themed around popular hashtags such as #PartyLewk and #MakeupQueens, and users can pay via the Checkout on Instagram feature. The inclusion of high-end brands like Balenciaga may hint at Instagram looking to increase or test in-app spend during the holidays.

• Companies such as Colorado-based start-up AMP Robotics are creating robots to help tackle the US recycling crisis. AMP’s robots use AI to identify and automatically sort materials, and can sort materials twice as quickly as humans, at 80 items per minute.

• New players are giving cashierless retail store Amazon Go a run for its money, sparked by innovations in machine learning and computer vision. Tech start-ups Grabango and AiFi are working on autonomous store technology for big retailers such as grocery stores, while US retailer Walmart has been testing technology such as its ‘fast lane’ checkout app.

Netwatch

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 3

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

Trending

Companies to watch

Yours. This Singapore-based beauty tech start-up creates personalized skincare products based on users’ skin type, lifestyle factors such as stress and travel and their environment. Customers answer an online questionnaire to determine their skin type and receive an assessment and list of recommended products, such as a personalized face serum and day cream. Founded in November 2018, the company raised $3.5m in its seed round, which was led by Sequoia Capital’s early-stage start-up accelerator, Surge.

ManiMe. This start-up’s proprietary 3D-technology creates custom stick-on nail art that it says is toxin and cruelty free. On ManiMe’s website, customers are asked to upload five photos of their hands before selecting a nail art design from a gallery. After placing the order, they receive a set of custom-fit stick on gels in the mail that the company says can be applied in less than five minutes and are easily removed. Sets are priced at $15 to $25. ManiMe raised $2.6m in a seed round of funding, led by US venture capital firm Canaan Partners.

Squish. Founded by model and body positivity activist Charli Howard, Squish uses a diverse range of models in its campaign photos and offers vegan skincare it says is free from parabens, sulphates, petroleum and perfume. Its line includes the Cheeky Cherry Eye and Cheek Mask ($20), shaped like a cherry and designed to de-puff, hydrate and cool, and the Flower Power Acne Patches ($14), which feature colorful flower designs with diamanté studs. The DTC brand is currently only available in the US, but plans to expand its online store to worldwide customers soon.

Brands in China are increasingly focusing on

KOCs, that is, Key Opinion Customers, a type of micro-influencer that is deemed

more trustworthy than KOLs and who can create private traffic on channels such as

WeChat.

Purple is the hot color this fall, in particular

for lipstick or hair, with ‘chocolate lilac hair’ doing

the rounds on social media.

The ‘around the clock beauty regimen’ is big

among Chinese consumers, who are embracing multi-step routines to prepare for bed and products that work

while sleeping.

Soap Brows is the eyebrow grooming trend of the season. The technique involves soap instead of eyebrow gel, which users

say offers a stronger hold for a fraction of the price.

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 4

Comment Retail insights & Travel retail

Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

DataThe luxury market

• The luxury market (both luxury goods and experiences) grew by 4% at constant exchange rates in 2019 to an estimated €1.3 trillion globally, according to consultancy Bain & Company. The core personal luxury goods segment also grew by 4%, to €281bn. Within this, shoes and jewelry both saw 9% growth, while beauty grew 3%.

• The luxury market in mainland China grew by 26% to €30bn, fueled by government policies and lower price differentials. Hong Kong, meanwhile, was impacted by the ongoing protests, with the market down 20% to €6bn. Europe grew 1% to €88bn, with Spain and the UK among the top performers, driven by tourism and weak currency. Globally, online continues to gain share, noted Bain & Company, accounting for 12% of the market.

• Millennial customers accounted for 35% of luxury consumption in 2019, a figure that could rise to 45% by 2025. It is forecast that Generation Z could account for 40% of the market in 2035.

• Some 80% of customers said they prefer brands that are socially responsible, the report highlighted, while 60% think luxury brands should be more engaged in these areas than other industries.

Around the world

• In the US, online sales on Black Friday reached a record $7.4bn, according to Adobe Analytics, the second-biggest shopping day ever after last year’s Cyber Monday. Some 40% of these sales were done via smartphones. Online sales this Cyber Monday were forecast to reach an all-time high, with Adobe Analytics predicting that they would come in at $9.4bn. In 2018, online sales on Cyber Monday totaled $7.9bn. Beauty retailers including Sephora and Ulta had been promoting their Black Friday beauty deals.

• In Europe, Black Friday has increased in popularity in recent years—the UK is still the leader in spending, although France and Germany are catching up. However, there are also signs of a backlash over the American shopping holiday, and a growing anti-consumerist movement could impact sales. In France, for example, more than 450 brands came together under the ‘Make Friday Green Again’ movement, saying they would not participate in Black Friday, instead encouraging consumers to reuse, resell and recycle what they already own. In addition, French members of parliament proposed banning some Black Friday promotions, as part of an anti-waste bill, and in an attempt to stop misleading advertising of discounts.

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 5

What are your priorities for driving growth? Japan is a highly mature market, therefore we look elsewhere for growth. Our priority is to increase share in Asia Pacific, especially in China. It has been said that Chinese society is aging; however there are also a great number of young people and their income level is going up, so we still see big potential. We are focusing on Jurlique, but in addition, J-Beauty is increasingly popular in China [so we will also push] POLA, THREE and ORBIS.

How are these brands currently distributed in China?THREE is not in the Chinese domestic market because China requires animal testing, which THREE does not do; however it is in the travel-retail market. The brand is already in the new airport in Beijing and we are looking to expand there. POLA and ORBIS are both in the domestic market. For POLA, the main distribution is department-store counters plus e-commerce. ORBIS for the time being is e-commerce only, but this includes cross-border e-commerce with Tmall.

What is the biggest challenge in establishing the brands in China?There is severe competition there. Having said that, Japanese brands are very popular among Chinese consumers. Skincare’s weight [as a category] is so much more than in other markets and because our four brands are all very strong in skincare, this is where we believe we can win. K-Beauty is growing very fast in China, but we have seen its growth slow down recently. That is being made up for by Japanese beauty growing even stronger. This trend is seen not only in Asia, but also in the US and especially in travel retail—70% of our Korean travel-retail revenue comes from Chinese travelers.

What is your strategy for travel retail?We are focused on Korea and Japan, where we are strong right now, and in the future China. The key point about China is that the government is very keen on boosting domestic consumption by channeling what is already [being] consumed outside the country, mainly in Japan and Korea. So, it is conducive to their strategy [to grow the] travel-retail business within China. The recent move by CDFG [China Duty Free Group] to acquire Sunrise backs this up. This is a very good opportunity for us. In addition to mainland China, Hong Kong and Macau also represent good opportunities. All over China opportunities are growing. In Beijing there is a new airport, and in Shanghai, Pudong Airport recently added two satellites.

How do you see the situation in Hong Kong and the US-China trade war? The number of Chinese travelers to Hong Kong may decline; however they will probably head to Japan or Korea. Political instability will not stop people going abroad and consuming. Wherever the Chinese travelers go, we will make sure that we’ve got the strategy to capture that consumption. The US-China trade friction does present a more realistic issue, in the sense that this will not reduce the number of Chinese travelers, but it could impact the Chinese economy—its robustness could be curtailed and consumption could start slowing down. n

”Pola Orbis Holdings director and vice president Naoki Kume

The key point about China is that the government is very keen on boosting domestic consumption by channeling what is already [being] consumed outside the country, mainly in Japan and Korea

“

Interview Pola Orbis Holdings director and vice president Naoki Kume

Pola Orbis Holdings director and vice president Naoki Kume on expanding in China and the brand’s strategy for travel retail

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 6

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

Zoom in on: Subscription models for beauty

Blackhawk Networks global vice president sales & marketing retail Alex Barseghian“The subscription model has been around for some time, but with subscriptions everywhere, from Disney to Apple, what will happen is that people will do subscription hopping. The idea of [subscriptions] for a replenishment model could

work. It is geared to a certain market: ‘I know what I want, I’m too busy’—it’s kind of like the Amazon commoditzed model and here you are subscribing to a service and for convenience.

The replenishment model will be applied to cosmetics, but people are more interested in subscriptions to try new things. The second model is the trial side of trying something new, but a little more personalized and tailored to you, so each month it is a little bit different; that’s where subscriptions are going to go [in the future]. The power of [big legacy beauty groups] is that they have so many brands under their

umbrella that they can create a platform that can apply to any of their brands and use AI to give the best match. You focus on the customers that are driving sales, then engage them with more customization and get them to try products [or brands] that they haven’t bought—that’s the next frontier. The huge advantage is that once you have something custom made and tailored to you and you get used to it, it’s hard to replicate that anywhere else and it’s hard to switch. That’s the level of engagement that the product has to get and that it will get to in the future.”

Chameleon Collective partner and co-founder CommerceNext Veronika Sonsev“Subscription services are sustainable in beauty, as beauty is all about discovering the right product and then replenishment of that product. Samples and trial sizes have always been part of the discovery phase, but they were just distributed through stores and magazines previously. Subscription services have enabled the automation and improved curation of the sampling process. Once you find the right product in beauty there is an inherent need for replenishment.

Legacy brands can explore this model. For discovery, they would need to segment their customers, curate products for each segment and create a story around the products in the box. Traditional beauty companies have these resources in house—they would just need to collaborate in a different way.For replenishment, there are many technology providers, like Ordergroove, which

can enable replenishment for brands. Customers could be incentivized to sign up for a replenishment program with a discount or a special gift with purchase.The advantages of the subscription model is that you don’t have to keep re-acquiring

the customer, which can be expensive, and you have a more predictable revenue stream. Subscription services will be a key distribution model, but not the only one. Certain products, like moisturizer, are ripe for replenishment. As AI and predictive analytics get better, more of this experience will become automated. […] Customers will find these types of predictive recommendations valuable and they will lead to more loyalty.”

Two experts give their views on how they see subscription models for selling beauty evolving

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 7

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

Zoom in on: Subscription models for beauty

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

• Consumer-goods group Unilever is testing the subscription model on several brands. It acquired Dollar Shave Club’s subscription razor replenishment service aimed at disrupting the traditional sales model through a system hinging on convenience and good value. Replenishment-based subscriptions have a higher conversion rate than other subscription services, according to consulting firm McKinsey.At the beginning of the year, Unilever also launched Skinsei, a subscription-

based brand that creates personalized skincare kits. It boasts a flexible system, whereby consumers can try the product before signing up, or choose the subscription frequency and swap products.

• Shiseido’s first subscription-based personalized skincare system Optune, which creates Optune Shots for the individual, is said to offer a comfortable and easy solution to the ‘ever-changing’ skin conditions and environment. Separately, the company also offers a subscription replenishment service.

• MIT-born subscription-based skincare brand Atolla taps into the power of personalization, and is built as an adaptive system that uses algorithms to adjust the individual’s formula from month to month. n

Succumbing to subscriptions

www.bwconfidential.com Collector’s Guide - 2019-2020

The leading publication on the international beauty industry

BEAUTY WORLD GUIDE

NEW

The Beauty World Guide

Covering almost 30 markets around the world, the Beauty World Guide includes:

• The latest country data • Retailer listings by market • Consumption habits • Strategy analysis • Distribution insights • Tech trends • Product trends

Order your copy

Seen in show: Cosmoprof Asia

With violence escalating in Hong Kong, it was a strange edition for Cosmoprof Asia. Many visitors—especially from China and the US—canceled their trips, according to exhibitors, while certain booths, including some from major exhibitors, were manned by a skeleton staff of local representatives. Official visitor statistics were not available at press time.“Despite the internal and external challenges that Hong Kong has been facing,

Cosmoprof Asia remains the ultimate meeting place for global beauty professionals. We received compliments from exhibitors and high-quality visitors who engaged in serious trading at the show,” stated David Bondi, svp Asia of Informa Markets and director of Cosmoprof Asia Ltd.In spite of the difficult context, those attending remained upbeat about the market in

the region, especially in China and Southeast Asia, which continue to grow strongly. “Asia Pacific is the largest skincare market in the world, [representing] 52% of global skincare retail sales,” said Euromonitor research and consulting analyst Emily Leung, who anticipates a CAGR of 4% for the market through 2023. “Consumer spending is relatively low, 25% to 30% lower than in the US and Western Europe.”While skincare remained a key area of focus at the show, make-up is also growing, as

market players aim to tap into increased consumption, notably in China where beauty routines have become more sophisticated over the past few years—a trend that is expected to continue. When it came to suppliers, the main story at the show was the growth of Chinese indie brands and the challenges and opportunities of working with them. Suppliers said they expect to see demand continue to grow from brands looking for higher quality products in order to future-proof their business. However, time-to-market and a lack of visibility on future successes continue to be a significant challenge.In terms of highlights at the show, South Korea was the country of honor, with 595

companies exhibiting. The country continues to be a driver of innovation for the region.Another high point was the Cosmoprof Asia Awards. BW Confidential teamed up with

organizers to create a special edition for the Awards spotlighting innovations from the finalists and trends in the region. Read it here.

BW Confidential reports on what was seen and heard at Cosmoprof Asia, which took place in Hong Kong from November 12-15

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 9

Cosmoprof AsiaTook place: November 12-15 (Cosmopack November 12-14, Cosmoprof November 13-15)Exhibition area: 118,900m2

(1.2 million ft2),+5% vs 2018Exhibitors: 2,955, +5% vs 2018 Visitors: N/A

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

Seen in show: Cosmoprof Asia

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 10

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

Talking heads: Industry executives on beauty in Asia“Younger consumers [in Asia] today want to stand out and express themselves. Eyeshadow is very strong, and we are introducing new 3D-shaped lipsticks. Most sales are [done] online, you buy based on a picture today, [so our role is to offer products] that excite consumers through a picture. [...] The biggest change I see now is in China. Brands are building their own personality. Tomorrow, they need more quality. The next wave is going to be the new quality prestige brands made in China.” Intercos make-up strategic marketing & account development vp Asia Anna Dato

“Chinese consumers are re-appropriating historic brands. There are a lot of one-shot brands, or brands that create a lot of volume in a single channel, surfing on the trend for livestreaming, for example. Chinese consumers want brands that represent them. […] Local brands are improving their quality, and customer expectations are growing. Being an international brand is no longer an advantage.” Creative Capital founder and ceo Louis Houdart

“With the development of e-commerce, online retailers know their customers best. [Some] 500 million people use Alipay, so we know what they buy. It’s physical retailers that know less about their customers today, and they need to catch up. Retail is not dead, but consumers shopping in stores in the future will have real expectations, both in terms of experience and human attention.” centdegrés co-founder and artistic director Elie Papiernik

“It’s a very fast-moving market and brands are becoming more demanding, [especially when it comes to] speed to market. There are a lot of start-up brands coming through. […] They may not have the expertise; they want to move forward but don’t know what it takes and they want us to be like a new product development department. There’s probably more risk for us and we need to manage that risk.” Quadpack regional director Asia Pacific Jason Smith

“We are looking at doing more sampling in Asia. With more high-value brands entering the market, there is more of a market for samples, and trial before purchase will become much bigger. The key is to target new channels, notably digital.” Arcade Beauty ceo Peter Lennox

“We are seeing a tremendous interest in color. Now the Chinese consumer is very experimental. We are working to have a local partner to serve the Asian market to shorten lead times. We believe that made-in-Italy make-up will further represent a symbol of quality and can be an opportunity for local brands to [upscale] their positioning. We believe it will be a game-changer because of the quality. We are seeing more local brands that want to target the masstige segment and more digitally native brands.” Chromavis vice president of marketing Cecilia Schena

“The fragrance market is beginning to take off in China. They are creating French- inspired brands. Chinese consumers like European products, and they can’t all afford major brands.” Parfex sales director Alexandre Levet

Seen in show: Cosmoprof Asia

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 11

“We’ve traditionally focused more on the multinationals in China, but some local brands are now almost rivaling international brands. They’re able to afford the sort of packaging we provide. They’re creating new brands overnight. They are asking for more complex decoration, but the biggest change is in the way we do business, as they can’t predict demand. You need to build capacity up front and build automation.” Toly executive director Samuel Xuereb

“Our main markets are still Europe and the US, but we are seeing more Chinese boutique brands. It’s very demanding, as they ask for quick [time] to market. For traditional brands, the development time is six to 12 months, whereas boutique brands in China expect products within two to three months. We now have a specific team for the domestic brands, and we need to allocate more resources to follow demand.”Axilone Shunhua internal sales manager Faye Chen

Innovations on showFirst-time exhibitor Amorepacific showcased its start-up brands—some created in-house, others through collaboration with entrepreneurs, with a view to expanding their distribution internationally. Soon+ is a clean beauty brand with a masstige positioning based on probiotic formulas and launched in July with three products. Steady:D (pictured) offers six sheet masks, all made from a different eco-friendly fabric suited for its specific function, as well as a clay mask in a tube format. It hit the market in September. Holitual, launching early next year, is a high-end skincare line with a professional positioning.

South Korean brand Dear Dahlia offers a range of high-end vegan make-up products with octagonal marbled packaging inspired by the dahlia flower. Launched three years ago, the brand is sold in Neiman Marcus in the US and at Galeries Lafayette in France. A launch on Sephora’s Hong Kong e-commerce site is set for January. The brand’s bestseller is its Paradise Dream Velvet Lip Mousse, which took home the Cosmoprof Asia Award for best make-up product at the show.

AO+ Skincare is the sister brand to US-based Mother Dirt, which focuses on balancing the microbiome to improve skin health. Created especially to target the Chinese market and launched through cross-border e-commerce earlier this year, the brand’s star product is its multi-purpose Restorative Mist, which it claims restores the skin’s pH balance and essential bacteria depleted by pollution, air conditioning and product use. Other products in the lineup include a cleansing mask, shampoo and body foam.

Founded 18 months ago, Texas-based Avya Skincare is built around a combination of ancestral remedies and science. Founder Deepika Vyas, a pharmacist by profession, wanted to create a brand to bridge the gap between doctor brands and luxury products. The five skus in the line contain Qusome, a patented complex of turmeric, neem and peony extracts for their anti-inflammatory properties. The brand is sold at Macy’s and on Amazon in the US and the UK. Prices range from $40 to $110.

Hailing from Taiwan, Inna Organic claims to be the only sheet mask brand with European Cosmos organic and US EWG certifications. The lineup also includes skincare and a recently launched body and haircare range. Inna is sold on Amazon in the US and will enter Europe, starting with Germany, next year. Its sheet masks (nine skus) sell for $5 to $8.

Seen in show: Cosmoprof Asia

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show

www.bwconfidential.com - Beauty Insight - December 3-16, 2019 #199 - Page 12

Based in Germany, high-end haircare brand Shazay is formulated with diamond-filtered water, which according to the company, allows the products to carry more cleansing and caring ingredients, and contain minerals and trace elements. The brand, founded by veteran German haircare specialists, is set to debut on the market early next year, initially with six products, with an average price of €30.

South Korea’s Dewytree, which already offers its products in Europe through Douglas stores in Germany and Spain and launches at Monoprix in France next year, presented a range of sheet masks based on a single active ingredient. Four different versions of the 100 mask are available—Cica for soothing, Birch for moisturizing, Quince for purifying and Hibiscus for revitalizing. The line taps into consumer demand for paired back formulas with as few ingredients as possible.

Hong Kong-based packaging supplier Kondai International Ltd presented a range of visually impactful refillable packaging, with cushion compacts in two different sizes as well as a lipstick tube. It also presented a broad range of colorful inner lipstick tubes designed for the refill market. The company is working on boosting its business in Asia, notably China, thanks to the growth of new brands entering the market. Asia currently represents 5% of its business. The firm hopes this will increase to 20% within the next five years.

FS Korea and HCT both debuted their first ranges of glue-free brushes, using developments in pressing technology to firmly secure bristles to remove the need for glue, making for more sustainable solutions.

Australian brand Black Chicken Remedies offers all-natural skin and bodycare products. Its 50 products contain no water—they are mainly powders, pastes and oils. Black Chicken Remedies sells on Neimanmarcus.com, Amazon and QVC in the US, and is looking to enter Asia.

Trends from the show

• Paired back formula—sometimes built around a single ingredient—and clean beauty, which is gaining traction in Asia, as well as multi-functional products that save resources and make beauty routines simpler were key features in products at the show.

• Visually impactful packaging and formulas were present as brands and suppliers seek solutions to drive impulse purchasing online.

• The sustainability discourse continues to gain ground and is becoming more of a focus in Asia, with many suppliers showcasing refillable solutions, as well as an expanded offer based on recycled, alternative and bio-sourced materials. Solutions included simple PET packaging that is suitable for existing recycling streams and packs that generate less wastage—for example, for loose powder products.

• Products that resonate with the senses, either by offering sensory effects like heating and cooling or by tapping into holistic storytelling, as well as brands that capitalize on a local or regional positioning to generate an authentic discourse, were in evidence at the show. n

CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

In case you missed it

L’Oréal invests in Functionalab Group

Givaudan to acquire Indena’s cosmetics business

Symrise appoints Pierre-Constantin Guéros senior perfumer

Kao to launch new clean, eco-friendly skincare brand

Designer Parfums unveils fragrances for Formula 1 brand

L’Oréal launches SkinCeuticals in travel retail

Aveda launches in Latin America

Kanebo to undergo rebrand

L’Occitane sales up 22% in fiscal first half

Aptar hopes to disrupt fragrance with new Dolce pump

Starboard Cruise Services creates new Luxury Division

Kenzo to launch major new Flower scent

Make-up museum to launch next May

Go to bwconfidential.com for full stories and daily news updatesSubscribe

The leading publication on the international beauty industry

www.bwconfidential.com N°40 October-December 2019

InterviewAS Watson Group group md Dominic Lai

Market watch: EuropeThe state of retail in Europe’s big five markets

Travel retail specialThe impact of digital on the channel’s business models

The leading publication on the international beauty industry

BW @ 10INVENTING THE FUTURE

Insight: FragranceData, digital & how to better sell scents

CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

BEAUTY

Comment Positioned for growth Inside 2 Retail insights Travel retail 3 Tech bytes Netwatch 4 Trending Companies to watch

6 Interview The Body Shop head of global travel retail Alexandru Mihaila

7 Zoom in on Estée Lauder Companies

10 In case you missed it

INSIGHT

There has been a string of negative geo-political and economic news in recent months. Analysts warn that a recession is looming, worries over the impact of the US-China

trade dispute continue to deepen, South Korea and Japan are busy with their own trade war, economic news from Germany is bleak, the prospect of a no-deal Brexit looks to be nearing a reality, US retail data is far from rosy, the political and economic crisis has taken a turn for the worse in Argentina, protests in Hong Kong are set to deal a blow to the economy in the region…and the list goes on. However, despite this cocktail of turmoil and tension, the beauty industry is showing

itself to be resistant. Estée Lauder Companies reported a 9% increase in sales in its fiscal fourth quarter ending June 30. It added that even factoring in the litany of geo-political and economic uncertainty, it still expects to report sales growth of between 7% and 8% for fiscal 2020—at the high end of its targets—and forecasts that the global prestige beauty industry will grow at a rate of 6% to 7% in the next fiscal year. L’Oréal may have seen its second-quarter sales come in slightly below analysts’ expectations, primarily due to a tough market in the US and the slowdown in make-up, but like-for-like sales still rose by 6.8%. And the group underlined that it reported its strongest first half like-for-like growth in more than a decade, with sales up 7.3% to €14.81bn. LVMH too, said sales at its perfumes and cosmetics division rose 10% on an organic basis for the second quarter of the year. The industry’s major players add that the China slowdown and trade battle with the

US has so far had no impact on their business and that the market there continues to see strong double-digit growth. Indeed, most say that China and Chinese travelers will continue to fuel the market, and that this growth is sustainable given an expanding middle class with higher disposable incomes. By extension this means that beauty’s other two key drivers—skincare and travel retail—are also likely to see continued growth. The market’s prospects could be a lot worse.

#194The leading publication on the international beauty industry

Subscribe

Follow us on:

Comment Retail insights & Travel retail

Tech bytes & Netwatch

Trending & Companies to watch

Interview Zoom in on In case you missed it

www.bwconfidential.com Collector’s Guide - 2019-2020

The leading publication on the international beauty industry

BEAUTY WORLD GUIDE

BW Confidential 17 rue Louis Rouquier, 92300 Levallois-Perret, France contact@bwconfidential.com Tel: +33 (0) 1 74 63 49 61 www.bwconfidential.com ISSN: 2104-3302 Publisher: Nicolas Grob ngrob@bwconfidential.com Editorial Director: Oonagh Phillips ophillips@bwconfidential.com Journalist & Copy Editor: Katie Nichol knichol@bwconfidential.com Contributors: Monica Defrances, Sophie Douez, Alex Wynne, Renata Ashcar, Mayu Saini, Corinne Blanché, Naomi Marcoulet, Tina Milton, Courtney Traub Subscriptions 1 year: Beauty Insight (20 issues) + Print Magazine (4 issues) + This Week in Beauty + Daily News + Beauty World Guide + Beauty & Travel Retail Special Edition: €549/US$769 subscribe@bwconfidential.com Advertising advertise@bwconfidential.com BW Confidential is published by Noon Media 513 746 297 RCS Nanterre Copyright © 2019. All rights reserved. Reproduction in whole or in part without permission is strictly prohibited.

The next issue of BW Confidential’s Beauty Insight out on December 17, 2019 • The latest retail and tech news • Interview • Travel retail data • Beauty trends • Social media insights

Plus an analysis of key market issues

Follow us on:

Comment Retail insights Tech bytes & Netwatch

Trending & Companies to watch

Data & Around the world

Interview Zoom in on In case you missed it

Seen in show