Posted on : 2022-07-29 02:58:14
Article : Good Evening Friday Management TASK 201- Beauty brand manufacturers are focusing at future multibillion opportunities driven by increasing prevalence……
Despite an increasingly saturated market, beauty has proven to be a strong investment category-thanks to its high margins, recurring purchase patterns, and general resistance to macroeconomic events such as recessions. The category is also appealing to a broadening audience, including minorities, males, and age groups beyond millennial and Gen-Z. Now, new demographics, products, technologies, and consumer behavioral insights are impacting the sector on both the startup and corporate sides. In 2019, leading brands have embarked on high-tech overhauls across product experience and there’s much more to come.
Beauty brand manufacturers have focused on multibillion future market opportunities. This is driven by the increasing prevalence and treatment of skin disorders, greater awareness of the effects of hormonal imbalance on skin, and the explosion of skincare within the broader beauty sector. It’s not just standalone apps and devices but brands are building connected beauty systems to personalize skincare treatments, gather behavioral data on shoppers, and encourage loyalty within brand-powered skincare ecosystems. Due to wide multi gender broad age group consumer market, privately owned beauty brands are experiencing growth faster than the total US beauty industry with new indie brands popping up left and right. But big beauty companies aren’t letting their market share slip so easily.
In recent years, there’s been a notable increase in both incubation and M&A activity from beauty corporates. In October 2018 Shiseido purchased cult clean clinical skincare brand “Drunk Elephant” in a much-anticipated sale worth $845M. Earlier that year Unilever acquired J-beauty brand Tatcha for $ 500 M while L’Occitane bought skincare brand Elemis for $900M. And Colgate-Palmolive, which has upped its M&A activity in recent years, purchased anti-aging skincare brand Filorga in a whopping $1.69B acquisition in July. It is interesting to note that beyond brand acquisitions, big beauty is also going after tech.
Beauty tech platforms can create a vicious cycle in which shoppers are constantly finding something to fix about their appearance. Smart mirrors, for instance, have been known to score consumers against each other or compare them to the average, idealized 20-year old. With this scenario beyond corporate initiatives, more independent players have entered the beauty device category.
Big beauty corporates have been keen to showcase their tech savvy in the consumer devices category. 2019 has been a banner year for beauty tech. From big beauty corporate making their first tech acquisitions to an industry-wide push towards customized beauty products and experiences, technology-backed cosmetics brands will continue to transform the sector in present and beyond.
Now that the brand manufacturers feel the technology base is the main platform and solution for beauty segment market, many leading global brands have launched their novel devices. To offer more insights and inputs we will discuss on these in our Good Morning Monday management Solution for Task 201 on 1st August 2022.
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