Under the impact of “Korean Wave”, the past European and American big-name cosmetics companies have also begun to lay down their bodies to meet market demand. Recently, Estée Lauder, the world's large...
Under the impact of “Korean Wave”, the past European and American big-name cosmetics companies have also begun to lay down their bodies to meet market demand. Recently, Estée Lauder, the world's largest skin care, cosmetics and perfume company, signed a share purchase agreement with Korean cosmetics company Have & Be. This is the first time that Estée Lauder acquired the mid-to-low-end daily-modification brand after opening the M&A model last year. The industry believes that Estee Lauder's "bend" is to use Korean brands as a weapon to advance into daily necessities and KA stores, thus strengthening the weakening Asia-Pacific market.
Hand in hand with Korean niche brand
Recently, Estée Lauder and South Korea beauty company Have & Be reached a strategic cooperation, Estee Lauder will invest in Have & Be, and Have & Be will be the important partner of the Estée Lauder Group in the world, especially in the Asian market, especially in China, the investment details will be It was completed in December this year. This is the first time that Estee Lauder has extended an olive branch to the low-end cosmetics brand.
According to public information, Have & Be has two major brands: Dr.Jart+ and DTRT. The former started with BB cream, and the product emphasizes the healing and repair of the skin. It entered the Chinese market in 2013. At present, in addition to 150 Sephora stores, Dr.Jart+ also entered the Nuggets flagship store Nuggets online in March this year. The latter focused on men's skin care and entered China in cooperation with Sephora in March this year.
The reporter saw in the Tmall flagship store of Dr.Jart+ that there are currently 50 products on the line, the average price is around 196 yuan, and DTRT has 15 products on the Sephora official website, the average price is about 284 yuan. Sephora sales staff told reporters that these two brands are relatively small compared to international big names. The buying population is younger and basically stable under the age of 40, among which there are many young consumers represented by “post-90s”. The reporter learned that the two brands were founded in 2005 and 2012 respectively. In fact, the Have&Be company was established only in 2004. It is quite young in terms of qualifications. This is in line with the consistently sound and mature mid-to-high end image of Estee Lauder products. sharp contrast.
Series acquisition complete product line
As we all know, Estée Lauder is known in the industry as a representative of mature muscles, and is known for its high-end anti-wrinkle skin care products. Therefore, cooperation with such a young niche brand is particularly intriguing. In fact, Estee Lauder has recently acquired a lot of money, the industry believes that this is directly related to the low performance of Estee Lauder.
Influenced by the recent weak sales of skin care products and the rise of the US dollar exchange rate, Estee Lauder's performance has not been so smooth in recent years. According to the data, Estee Lauder's sales in fiscal year 2013 increased by only 5% year-on-year, much lower than the previous year's 10%. Last year, due to increased investment in new products and distribution expansion in China, operating profit declined. This year, Estee Lauder is in Asia Pacific. Sales in Hong Kong, China, and Singapore in the region are still relatively weak. Among them, brands such as Hailan Mystery, which has performed strongly in the Group's performance, have declined in Hong Kong. It is worth noting that almost all of the Group's two mainline brands, Estee Lauder and Clinique, have declined.
In order to boost its performance, Estée Lauder has launched the largest restructuring in recent years, reorganizing its perfume business, and has also set up a men's skin care department and made a series of acquisitions for the perfume sector. In November last year alone, it acquired three high-end niche perfume brands: the French niche perfume brand Editions de Parfums Frédéric Malle, the American high-end independent perfume brand Le Labo and the Italian high-end brand Rodin Olio Lusso. In addition, Estee Lauder will also be in the bag of Glam Glow, a skincare brand designed for Hollywood stars. What these brands have in common is high-end, unique, and niche. In the eyes of the industry, young consumers no longer blindly pursue high-end brands like Estee Lauder, but prefer to focus on niche cosmetics brands that match their own personality, which makes the market share of big brands sharply narrow, few The big name will sit still. In order to regain market share and win more consumers, the big names such as Estee Lauder must also reposition the target audience, and it is especially important to cooperate with niche brands such as Have&Be, which are popular with specific groups.
Intended to enter the mass channel
From the high-end to the niche innovation, walking down the altar to embrace the intimate brand, Estee Lauder's downsizing, in the industry's view, in addition to making the product line more colorful, but also the intention of diversification in the channel.
Feng Jianjun, a daily chemical industry expert, told reporters that the main market of Estee Lauder is concentrated in North America and Europe, which also makes Estée Lauder not have the same product layout in the high-end, mid-end and low-end markets as other brands, but has been in the middle and high-end. Product expansion. But blindly high-end routes, it is not enough to get recognition from Chinese consumers. As the Asian region differs from North America and Europe in terms of ethnicity and consumption level, Estée Lauder wants to develop a more “grounded” product if it wants to win the Asian market.
In addition, in Feng Jianjun's view, not only Estee Lauder, many European and American cosmetics giants are facing the problem of channel diversion in China. It is understood that Estée Lauder is dominated by high-end department stores and professional chain stores, and currently more than 50% of sales come from high-end department stores. “With the fission of the commercialized ecological environment, Estee Lauder needs to expand in multiple channels, not only in high-end shopping malls. But Estee Lauder can't let its main line brand sink to Shangchao, KA stores, cosmetics stores, because in the eyes of the public, Estee Lauder is High-end representatives. Therefore, it is also possible to choose to expand the channels of cooperative brands, so that these more intimate brands can enter the next level of the market." Feng Jianjun said.
For a long time, the West has been the vane of the beauty industry, but now the East is rapidly emerging and occupying the global beauty market. According to a report by Euromonitor International, by 2019, 80% of global skin care products will come from Asia, of which China will account for 75%. In the face of this huge potential market, Korean companies first responded. Last year, South Korea’s cosmetics produced the largest amount of exports to the Chinese mainland, at $533.6 million. In order to catch up with the "Korean Wave" express train, not only Estee Lauder, the world-renowned perfume cosmetics company Christian Dior also recently signed a strategic cooperation agreement with the Korean cosmetics company Amore Pacific. Feng Jianjun pointed out that with the momentum of “Korean Wave”, Chinese consumers have become more and more aware of Korean cosmetics in terms of ecological environment, brand promotion, R&D technology and multi-channel penetration. Estee Lauder and other European and American cosmetics. The cooperation with Korean brands will also become increasingly close, which will also become the new engine for the daily development of the Asia Pacific region.