Can Lipstick Save The Performance Of Luxury Brands?

According to the world clothing shoes and hats net,

The "lipstick index" is becoming more and more important as garment sales continue to slump.

With the turmoil in the global luxury industry, even if it has been proven to be able to withstand the Great Depression of the luxury market, such as

It also began to experience a sharp drop in profits.

Although many luxury brands are lowering their earnings forecasts, the sale of silk and its similar retail outlets has produced surprising results.

In order to meet the needs of products,

The group also raised sales expectations this spring.

In the fourth quarter ended June 30th, Estee Lauder Group sales rose 9% to $2 billion 890 million compared to the same period last year, while net profit soared by 143.6% to 229 million dollars.

For the 2018 fiscal year, Estee Lauder Group expects sales growth to be between 8% and 9%. Profits will grow by two digits, while L'OREAL's high-end cosmetics sector performs well, with revenue rising 10.5% to 4 billion 148 million euros in the first half.

Among them, driven by popular products such as lipstick and perfume, YSL cosmetics sales for the first time exceeded 1 billion euros.

Jean-Paul Agon emphasized that YSL was especially popular with Chinese consumers. It gained 40% growth in the third quarter of last year.

Last year Bloomberg declared that the word lipstick index was back.

This term was created by Leonard Lauder, then Estee Lauder chairman, during the 2001 recession.

It shows that in the face of uncertain market conditions, women no longer buy higher priced goods such as LV handbags or Chanel fashion, instead of buying beauty products with better price performance.

However, high-end fashion brands are not hopeless.

For wealthy consumers, though they do not buy clothes and accessories as they like in the past, their demand for high-end cosmetic products is increasing.

In Chanel, LV, L'OREAL and Lancome, this is undoubtedly good news.

It is noteworthy that L'OREAL group's stock price surged earlier this month, benefiting from the increased demand for high-end color cosmetics brand in North American market, and the brand's revenue in the past seven months exceeded analysts' expectations.

The Wall Street Journal reported that high-end or luxurious makeup is quite different from the mass market makeup products, including cosmetics, perfume and skin care products, which are often more refined than those purchased in ordinary stores.

They have another difference, that is, the gap of growth.

According to New York market research company NDP Group data, in 2015, the scale of the luxury beauty market in the United States increased by 7% to 16 billion dollars, and the public beauty market grew by only 2% to 21 billion 700 million dollars.

Luxury makeup is clearly a more promising market and is expected to exceed US $126 billion in 2019.

As the world's largest beauty market, the US market in 2016 is expected to exceed US $62 billion.

NDP said that the sales volume of the whole beauty market has increased by 13%, and the turnover of perfume category has increased by 4%, the first time it has exceeded skin care products, and the latter has increased by 3%.

While high-end perfume also keeps the industry growing, however, popular perfume and Cologne, including products with star endorsement, are constantly hitting the wall.

According to Euromonitor International, the $6 billion 600 million market size of the American hand perfumed products and other high-end perfume markets will grow by 18% in 2020, while the mass perfume market is expected to fall by 15%.

Therefore, the make-up giant is looking for a way out.

Coty Bart Becht, chairman of Cody, said the company plans to refocus on top brand designers, such as Marc Jacobs and Gucci. At present, Coty holds the authorization of many high-end fashion make-up brands.

Now, luxury brands are paying more and more attention to the cosmetics industry. Gucci and D&G have launched a series of beauty makeup. Burberry has also opened independent beauty shops to win market share in this field.

It is no surprise that LVMH, the world's largest luxury goods giant, has also made efforts in this field.

70 years after the absence of the perfume market, Louis Weedon, the luxury brand of the group, launched a new series of products. Guerlain Guerlain expanded its make-up product line this spring, launched the Guerlain La Petite Robe Noire series and sister brand Kenzo, and released a new perfume in August.

But the expansion of LVMH is not just about product lines.

According to people familiar with the matter, in July of this year, L Capital Asia, a private equity investment company with the right arm of the LVMH group, invested $50 million to acquire the Clio Cosmetics Co. 7% of South Korean cosmetics manufacturer, which has a market capitalization of about 700 million dollars.

Euromonitor International cosmetics and personal care senior analyst Ildiko Szalai pointed out in a report that the global cosmetic market is becoming increasingly interested in the concept and innovation of Korean cosmetics.

And these efforts are working.

Especially for the high-end cosmetic brands now occupying high-end positions, they have inherent advantages.

According to the data, LVMH sales increased by 14% to 2 billion 670 million euros in the first half of this year. The cosmetics and perfume products of Dior were still the engine of the Department's growth. All of them recorded a significant increase. Fresh's latest black tea series increased significantly in Asia, and Givenchy's Lipstick and Benefit eyebrow products also performed well. During the period, a series of cosmetics Beauty Beauty by Rihanna was launched.

Various phenomena show that women's consumption preferences have shifted from clothing accessories to make-up.

According to analysis, with the rise of Internet and social media, consumers' access to information is getting higher and higher, especially their attention to health.

Euromonitor researcher Eleanor Dwyer said: "people are gradually realizing that the products they use on the skin will penetrate into the skin layer.

This will undoubtedly exacerbate the demand for natural products. "

As Vogue pointed out earlier this year, "more and more people have increased disposable income. Health has become an important part of the high-end lifestyle.

If the trend of five years ago is Celine handbags, the current benchmark may be SoulCycle Hoodie and green juice, and even more advanced is organic make-up products.

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There is also a view that the revival of feminism is also a combustion improver for makeup.

TV plays, advertisements and so on, which are dominated by women, reflect this trend.

Brand is to win the market by innovation.

For example, SKII launched a blind date advertisement in 2014. It describes the elderly single women who suffer from family pressure in dealing with marriage problems. They hit the pain points of many single aged women in cities, becoming the phenomenal video ads of the year, and also driving the sales of brands.

However, consumers' desire for luxury goods is continuing.

Eleanor Dwyer said: "I think people are tired of thrift, but they do not have a lot of spare cash.

So the high-end beauty brand provides an excellent entry point.

She added that this allows people to have a YSL or Chanel beauty product without spending four digits.

In this way, the company's goal is to attract consumers of the millennial generation and the Z era.

To do this, at least in perfumes, they use smaller sizes, such as 10 milliliters of ball products.

This package has the fastest growth in performance, according to Euromonitor, which has increased by more than 50% last year.

Most other size products declined or increased by less than 1%.

NPD Group beauty analyst Karen Grant said: "young consumers are more likely to be able to find, use and carry them.

Even high-end perfume products will be tested with different packaging products and will be released after the market matures.

This may be the trend in the future, especially as a licensed product, when perfume and cosmetics have become the most important source of income for most luxury fashion brands, they will be more popular with consumers than clothing and IT bags.

In the Chinese market, the high-end skin care products market continues to grow.

According to XinDa Securities report, sales of cosmetics in China increased by 8.3% in 2016.

And high-end is the key driving factor for the continuous growth of the beauty market, and the share of high-end products continues to rise.

According to the kaydo consumer index, those who began to place high-end brands on the purchase list contributed 46% sales growth to such brands.

In particular, middle class consumers with strong economic capabilities are expanding rapidly to stimulate the market for beauty and skin care, especially in the high-end market.

According to the "2017 imported beauty trend report" released by NetEase koala, the sales volume of China's cross border beauty market is growing rapidly. Consumers are also more concerned about the quality of cosmetic products, and there is a strong desire to import high-end cosmetics.

A close-up of women's consumption in Jingan District, Shanghai, released by DT, also shows that Shanghai Jingan District women, who are located in the highest areas of female consumption in China, take the most attention to cosmetics and accessories.

Whether it is 18-27, 28-37, 38-47 or over 47 years old, Jingan District women occupy the largest proportion of women's consumption structure in all age groups.

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