The global beauty and cosmetics market is estimated to generate €360bn in annual sales, and has been at the centre of a number of high profile deals in recent years including Estée Lauders’ purchase of Too Faced, Unilever’s acquisition of Hourglass, and L’Oréal’s purchase of IT Cosmetics. Whilst the market may be dominated by US players it’s the Asia Pacific region that is predicted to see the largest growth (in both premium and mass market products) through to 2021*.
In recent years the market has been all about K-Beauty – the beauty brands and trends coming out of South Korea. K-Beauty was first thrust into the spotlight back in 2011, when BB-cream became every women’s must-have product, and since then the market for Korean products has seen phenomenal growth across the globe, driven largely by the “glass skin” trend**. As such, South Korea became the fourth largest skincare market in the world last year.
With this growing trend, came acquisitions. In November 2017 Unilever entered the space with the €2.27bn purchase of Carver Korea, one of the fastest growing skincare businesses in South Korea and the country’s third-largest cosmetics company. The deal marked the consumer goods business’s largest acquisition to date, and was the final in a string of beauty transactions Unilever completed in 2017.
However K-Beauty could have some competition from its neighbour; enter J-Beauty (Japanese beauty). Japanese cosmetics isn’t a new craze; brands such as Shiseido has long standing success with Western consumers.
The recovering Japanese economy, an increase of investments from leading Japanese cosmetics brands into new beauty businesses, and consumers now favouring a more natural, stripped-back routine means that K-Beauty is likely to take a back seat to J-Beauty as we head further into 2018.
The beauty market has always seen considerable M&A activity, driven by global trends. It will be interesting to see what acquisitions will be on the horizon this year.
**Source: Vogue – skin is so healthy, even-toned, and plumped with hydration that it’s almost translucent