Competitor Strategies in Beauty and Personal Care

October 2023

Beauty and personal care players face a challenging environment of tighter consumer spending. Volume declines and softness were a recurring theme as companies grapple with rising costs and potential negative impact on volume. L’Oréal Groupe maintains its rank as the leading beauty and personal care player, while others witness share stagnation or declines. Large shifts in 2023 included Natura&Co’s sale of Aesop to L'Oréal Groupe and e.l.f. Beauty’s acquisition of Naturium.

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Key Findings

L’Oréal Groupe maintains lead, while other players grapple with market share stagnation or declines

Predictions in 2022 that premium players would be negatively affected by consumers’ increasing price sensitivity have come to fruition. With the exception of L’Oréal Groupe, the leading players experienced stagnation or reduced market share. Estée Lauder Cos Inc grappled with market share loss in key markets where premium took a hit, while Shiseido must act quickly following recent announcements of the company’s weakness in its home market Japan.

Natura&Co sells Aesop to L'Oréal Groupe, solidifying L'Oréal’s premiumisation strategy and refocusing Natura&Co on core brands

Aesop was L'Oréal Groupe’s largest acquisition to date. Aesop’s clean and conscious positioning has clear alignment, and lessons from Aesop’s plant-based and laboratory-made ingredients are likely to support other L’Oréal brands, as they move to a more transparent ingredient model. Natura&Co’s concerns continue with the potential sale of The Body Shop, which weakened in 2022 in its largest markets of the UK, Australia, Japan and the US.

Beauty and personal care players face a challenging environment of tighter consumer spending

Global inflation is still high in 2023. Volume declines and softness were a recurring theme among major players. Beauty and personal care players’ main challenge will be remaining price accessible to consumers amid increasing commodity price pressure and rising inflation, against a backdrop of new entrants in the mass and masstige segments offering value and efficacy at affordable prices.

Premiumisation, affordability, ingredient-led beauty and blurring wellness spaces are key trends

A wave of new hybrid products is a result of consumers looking to purchase fewer, but more functional items suitable for daily use. Players are communicating efficacy through consumer education regarding ingredients. L’Oréal is expanding its capabilities in skin science through research and rebranding efforts, while Procter & Gamble’s Olay is capitalising on premiumisation through a proprietary serum.

Scope
Key findings
Companies at a glance
Strength of post-pandemic recovery differs between companies
Daily-use personal care products help generate market momentum
Emerging and developing markets continue to lead growth, but it has slowed
While L’Oréal maintains lead, other players grapple with stagnation or declines
Beiersdorf and Natura&Co heavily dependent on top three brands, while Unilever diversifies
Top five companies are expected to maintain their ranks, due to Natura&Co’s sale of Aesop
L'Oréal Groupe’s lead in largest colour cosmetics e-commerce narrows as of mid-year 2023
Estée Lauder Cos Inc’s key brands underperformed in Asia Pacific, driven by declines in China
Colgate-Palmolive and Procter & Gamble make gains in e-commerce personal care
Direct seller Natura&Co optimises online and mobile presence through fintech expansion…
…but potential sale of The Body Shop highlights Natura&Co’s weakness in its largest markets
Products with sustainable features account for half of Procter & Gamble’s sales in 2022
L'Oréal Groupe acquires Aesop, elf Beauty acquires Naturium, while other companies divest
Celebrity-backed beauty positive in men’s grooming but seeing fatigue in women’s segment
Beauty and personal care players face a challenging environment of tighter consumer spending
L’Oréal focuses on hyper-premiumisation and specialisation in high-spend markets
Case Study: L’Oréal focuses on premiumisation and specialisation, especially in Asia
Case Study: L’Oréal focuses on premiumisation and specialisation, especially in Asia
SPF moisturisers promise prevention at higher price tags
More solid shampoo launches expected as waterless trends and spending tightens
Procter & Gamble expands value proposition of women’s shaving through dermaplaning
Colgate advancing in teeth whitening through science-led innovation
Ingredient-led beauty will continue to influence beauty and personal care industry
“Natural” and “hydrating” claims dominate, but “vegan” claims growth outpaced others
Ingredient innovations span all categories and price tiers
Procter & Gamble’s Olay capitalises on premiumisation through proprietary serum
L’Oréal expands its capabilities in skin science through research and rebranding efforts
Varied perceptions of health lead to a broad definition of wellness
Blurring wellness concepts range from edible skin care, routines, and to aromatherapy
Natura&Co expanding wellness through skin care and fragrances
Dermocosmetics company Kao expands to laundry care in Japan
Pola Orbis launches functional drink for “beauty from within” positioning
Unilever places greater focus on scalp care and hair loss prevention in 2023
Key findings
Overview of Beauty Survey: Product and brand coverage
Overview of Beauty Survey

Beauty and Personal Care

This is the aggregation of baby and child-specific products, bath & shower, deodorants, hair care, colour cosmetics, men's grooming, oral hygiene, fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.

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