Beautiful way to make fortune
Beauty is big business, worth $382bn globally.
Historically it has been dominated by mega corporations, such as Procter & Gamble, Estée Lauder and Unilever.
Seven of the largest cosmetics companies own more than 170 separate brands between them, and their power to get products from the lab to the shelf has seemed unsurpassable.
But things are starting to change.
Consumers are no longer discovering new beauty products in the pages of glossy magazines or at the counters of department stores, but nestled within their Instagram feed.
A new generation of direct to consumer brands have launched, typically occupying a very specific niche. Often they are fronted by a popular online personality – or “influencer.”
They are promoted almost exclusively on social media and are sold directly to consumers via a dedicated online store.
One example of an upstart runaway success is Kylie Cosmetics, which is owned and operated by reality TV celebrity Kylie Jenner.
This independently owned brand has sold more than $420m in products in recent months, and is set to become a billion dollar business by 2022 – something the legacy cosmetic companies took decades to accomplish. Being part of the Kardashian clan is certainly a major advantage for Kylie Jenner, but there are plenty of other brands without such connections which are still challenging the big players in the market.
Brands you will likely only ever see advertised on social media that are doing millions in sales include Anastasia Beverly Hills, Becca, ColourPop, Tarte, Karity and Too Faced.
The reasons for this change are not difficult to fathom.
Consumers – particularly young people – are spending vast amounts of time on their phones, and many look for style tips from people they feel they can relate to – the more specific, the better.
The brands that followed this shift in attention and interest are reaping the rewards.
By Guy Cookson, Partner at Hotfoot Design