Competitor Strategies in Beauty and Personal Care

December 2020

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.

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Key Findings

L’Oréal maintains its leading global position with a 10% value share in 2019

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.

While most key players will suffer in 2020, the severity of the impact will vary by exposure

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.

Beauty players look to strengthen their wellness-orientated proposition

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.

New sustainable goals are unveiled, as sustainability expands to include purpose

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.

Brands aim to digitally replicate lost retail experiences at home

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.

Introduction

Scope
Key findings
Beauty and personal care and COVID-19
The 5-step consumer progression of COVID-19

Competitive Environment Overview

Companies at a glance
L'Oréal ranks as the number one beauty and personal player globally
Emerging markets account for a higher proportion of company sales
Competition heats up against the rise of smaller indie brands
Beiersdorf and Johnson & Johnson rely heavily on hero brands
A diversified portfolio will offer more resilience during COVID-19
Leading beauty players should see steady rankings in the future

Navigating Covid-19

Main priorities and challenges for beauty players in 2020 and beyond
Geographic exposure a key factor of ongoing performance
L'Oréal suffers high exposure to key markets hit by COVID-19 outbreak
Procter & Gamble’s personal care brands offer some resilience
Unilever supported by its solid portfolio of mass-positioned toiletries
Est ée Lauder to restructure distribution outlets following COVID-19
Major challenges for Coty’s discretionary portfolio in 2020 and beyond

Key Themes and Opportunities: Innovation

Innovation directed around health, wellness and value for money
Beauty players look to strengthen wellness-orientated proposition
Skin care and make-up converge towards multifunctionality
Brands use an ingredients-led focus to reach educated beauty consumers
Personal care gets a premium make-over

Key Themes and Opportunities: Sustainability

Sustainability expands to include purpose-driven action
Multinationals unveil new sustainable goals and commitments
Beauty brands get a wake-up call to cater for inclusivity and diversity

Key Themes and Opportunities: Digital

Beauty companies pivot to digitally-driven strategies
Brands aim to replicate lost retail experiences at home
TikTok campaigns and livestreaming take off as key forms of engagement
Brands ramp up on-demand delivery services amid COVID-19
Luxury brands launch into “untraditional” channels

Future Outlook

Digital, wellness, value and sustainability to remain core focus areas

Appendix

Definitions
About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Model
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