Supplier of marketing research, Global Data, in one of his reports stated that there are three major factors influencing the development of the world cosmetics market: premium cosmetics, digital technology, Millennials.
Premium cosmetic brands are rapidly growing market share, boosting sales. In addition, they attract the Millennials, the dominant group of consumers through innovation and a strong digital platform.
According to analysts Global Data, Estée Lauder and L’oréal are two key examples of these trends and consumer behavior.
“The recently announced fourth quarter results Estée Lauder showed a continued sales growth with a sales increase of 14%, driven by the launch of new products and the growing attractiveness of the company among young consumers through the acquisition of cosmetic brands, says research firm. – L’oreal also announced the strong performance of its premium brands such as Lancôme and Giorgio Armani, with revenue growth of 13% in the second quarter and 13.5% in the first half”.
According to forecasts of the company, targeted acquisitions that complement the portfolio of brands Estée Lauder and L’oreal, will be crucial for the markets of Western Europe and North America. Sales of both companies is particularly high in China. Economic growth in Asia contributed to the online retail trade, with e-Commerce L’oreal showed an increase of 36.4% over the first half of 2018.
Alexandrina Yotov, an analyst with Global Data, explains that the data shows that consumer demands are changing, and premium or prestige solutions are becoming more popular. “This highlights the change in consumers in relation to cosmetic products in General, as expected by the representatives of the Estée Lauder, companies that focused exclusively on premium brands,” she says.
“American brand NYX Professional Makeup, purchased in 2014, L’oreal, showed himself especially well. The acquisition of niche brands of makeup such as Too Faced and Becca, has allowed Estée Lauder to diversify its product portfolio to reach more consumers.”