The Q4 update as of October 2017 reveals the second consecutive quarter of improving outlook in the global beauty market, albeit marginal. The most significant upgrades continue to stem from Brazil and Japan, joined by key Western European markets, indicating a positive state of affairs in the long-stagnating region. Skin care experienced the most significant upgrade compared to baseline forecasts, due to positive impact from two main drivers: GDP, and product pricing in the above geographies.
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The most significant upgrades continue to stem from Brazil and Japan, joined by a range of key Western European markets, most notably Spain and Germany, indicating more positive state of affairs in the long-stagnating region.
Skin care contributed most to the Q4 upgrade compared to baseline forecasts at USD539 million, due to a strong positive impact from two main drivers, GDP and product pricing, in the above geographies.
Signalling the importance of the largest Western European markets, some 40% of the global upgrade stems from the combination of Spain, Germany, Italy and France, reflecting the region’s steady economic stabilisation.
The new centre is making L’Oréal’s best global innovations relevant to Brazilian and Latin American consumers through local developments and customisation of worldwide technologies, and also setting the pace for breakthrough innovations in key categories, such as sun care and hair care.
There is strong demand for value-added products offering benefits such as boosting radiance, evening skin tone and softening wrinkles. Many ageing consumers sought to maintain a youthful complexion by buying the best products they could afford.
While the economic headwinds are halting premium opportunities, the same forces are benefitting mass, most significantly due the lack of category maturity in mass. Unmet market potential in mass BPC is twice the size of premium in Saudi Arabia.
Competition between L’Oréal and Estée Lauder has intensified for the global top position in premium beauty. Coty has beefed up its premium portfolio and has jumped to the top global position in premium fragrances.