2020 has seen beauty’s competitive environment significantly shaken-up. While major companies continue to face fierce competition from fast-growing indie brands, Covid-19 has bought new challenges that will see most key players suffer regardless, with the severity of the impact resting on portfolio and geographic exposure. With 2020 becoming a testing ground for how brands can maintain consumer loyalty, beauty players are ramping up investments in wellness, sustainability and digitalisation.
P&G ranks second with 8% value share, with Unilever close behind at 7%. Meanwhile, Estée Lauder, Colgate-Palmolive and Coty are close in value share, meaning opportunity is rife to swap ranks in the coming years. Estée Lauder and LVMH have gained value share over the historic period, as both expand their premium portfolios.
As the economic impact of COVID-19 ensues, companies with a portfolio spread across personal care categories, such as P&G and Unilever, will tend to be less vulnerable, while those also with a balanced mix of price points or mass-orientated ones are likely to fare better. Geographically, players with a strong presence in China, the epicentre of the rebounding beauty market, may see a faster rebound to growth.
As home becomes the wellness hub and consumers’ quest for health and wellbeing is heightened, self-care is being re-imagined. Companies are looking at how they can renovate products to incorporate associations around health and wellness. COVID-19 has also accelerated a “back to basics” approach, with rising competition from brands that play on simplicity, transparency and value for money.
2020 has seen many efforts from beauty players dedicated to improving the beauty industry’s environmental footprint, which has included unveiling new sustainable targets for 2025-2030. Beauty brands are also recognising their responsibility to cater further to diversity and inclusion, including both race and gender.
As COVID-19 brings a whole new realm to digitalisation in beauty, companies are accelerating online strategies to maintain customer relationships. This includes investments in livestreaming, digital forums and advisors, mobile messaging apps, as well as shoppable social media and partnerships with on-demand delivery services.
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