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When talking about how the end of the year will pan out, many industry players continue to be nervous about the slowdown in China and have reservations about the holiday season in Europe, especially in light of the terrorist attacks in France, which is set to put a dent in pre-Christmas sales and hit tourist spend. However, in the US, the outlook is a lot more positive. Market-research group NPD says that the US prestige beauty market has entered a phase of “renewed growth”, putting the industry in a healthy position going into the holiday season. US prestige beauty sales from January to September

were up 8% and the group says more consumers plan to purchase beauty products this holiday compared with 2014. In terms of category, make-up is set to drive holiday sales in the US and elsewhere, with

the category cited by industry watchers as the fastest growing globally. In the US, sales of color cosmetics rose 13% from January to September and consumers are expected to prioritize this category for the holidays, according to NPD. In Europe too, make-up is doing well and is credited with driving growth in beauty overall,

a trend that is likely to continue. In France for example, prestige lipstick sales rose 11% between January and August this year, while facial make-up saw growth of 2%. Fragrance is also set to put in reasonable results in key markets—in the first half of this

year, the category performed better than last year—with juices as opposed to gift sets likely to drive growth for the holidays in countries such as the US. Skincare, however, is expected to continue to see soft sales in mature markets, although niche categories, such as masks and oils, could help lift the segment. All in all a very mixed market.

A mixed market The buzz 2News roundupNetwatch 7 Social media monitor

Interview 8P&G Prestige vp of global marketing development and operations Jose Maria Marquiegui

Insight 10South Korean brands

Show review 13 Cosmoprof Asia

Store visit 16Chanel’s beauty standalone, Paris

Oonagh PhillipsEditor in [email protected]

www.bwconfidential.com The inside view on the international beauty industry December 3-16, 2015 #121

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The Fragrance Guide on p.7News headlines daily on www.bwconfidential.com @BWCbeautynews


www.bwconfidential.com - December 3-16, 2015 #121 - Page 2CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

News roundup

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At a glance...

Retail

LVMH-owned beauty retailer Sephora has unveiled a new store concept in San Francisco that is built around its teach, inspire and play (TIP) approach. Called Sephora Beauty TIP Workshop, the 8,500ft2 (780m2) store is at the retailer’s revamped Powell Street location. It stocks over 13,000 products, including 12 new brands, and offers a range of classes and services. Features include The Beauty Workshop, which Sephora says acts as a

central workstation where consumers can participate in group beauty classes, watch tutorials, share content using iPad stations and take inspiration from The Beauty Board, a shoppable gallery that displays user-generated content on a digital screen. Elsewhere in the store is The Skincare Studio for skincare consultations and

the Sephora Beauty Studio for one-on-one makeovers. Meanwhile, Fragrance IQ allows customers to explore 18 scent families thanks to the new, InstaScent scent immersion technology. The store also features new, multi-branded interactive areas including Trend Tables and the Hair Play Station. Sephora plans to progressively roll out the concept to both new and existing locations.

Estée Lauder Companies (ELC)-owned brand La Mer opened its first Brazilian store at Iguatemi Shopping, a luxury mall in São Paulo. The 42m2 (452ft2) store will carry 32 skus from the La Mer brand and also features a treatment room for facials and body treatments. For the moment, the store is the only outlet (apart from spas) offering La Mer treatments, an area that the brand wants to develop.

Middle Eastern retail and distribution company The Chalhoub Group has debuted a new retail concept offering beauty, bags and children’s products in Abu Dhabi’s Yas Mall. Tryano is a 20,000m2 (21,500ft2) specialty store selling more than 250 international and local brands, and according to the company, has one of the largest offers in the UAE in its categories. The ground floor beauty space is inspired by winter, and is entered via

the fragrance department. Make-up and skincare also have dedicated areas, and the store offers beauty boutiques, corners and multi-brand areas. Several brands are exclusive to the store, including Editions de Parfums Frédéric Malle and SK-II. The three-floor store also offers bespoke services and houses a branch of La Patisserie des Rêves pastry shop. n n n

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n Sephora unveils new TIP concept in San Francisco

n Natura to open brick-and-mortar stores in Brazil

n John Demsey promoted at ELC

n Beyond Beauty reveals new show format

CONFIDENTIAL CONFIDENTIAL CONFIDENTIALCONFIDENTIAL CONFIDENTIALCONFIDENTIAL

www.bwconfidential.com - December 3-16, 2015 #121 - Page 3

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n n n UK-based online beauty retailer Feelunique has acquired French perfumery chain Parfumeries Rive Droite in a bid to develop its footprint in France. Founded in 1986, Parfumeries Rive Droite has four boutiques in Paris and its immediate suburbs. These stores will be rebranded under the Feelunique nameplate in the coming months. Fabrice Rimbault, director of Parfumeries Rive Droite, will become chief operating officer

for Feelunique France. Feelunique also appointed Claire Blandin as managing director for France at the beginning of November. Blandin was previously head of purchasing at Beauteprivee.fr and a beauty buyer at Monoprix. Feelunique recently announced the opening of a pop-up store in Paris’ Marais district, showcasing 16 UK beauty brands, from November 27 to December 13.

Strategy

Brazilian direct seller Natura is to open brick-and-mortar stores in large shopping malls across Brazil from 2016. The company is currently planning the new concept and no further details on the format were available.The move to open stores is part of Natura’s strategy to diversify its distribution. The

company has been hit by falling sales, a declining number of sales representatives, increased competition from local rival Grupo Boticário, which has rolled out a number of new retail formats in the past few years, and the slowdown in the Brazilian economy. The company’s new president Roberto Lima has outlined the group’s need to create new brands, explore new distribution channels and carry out acquisitions. In 2012, Natura took a 65% stake in Australian company Aesop, a brand with its own store network.Analysts say that moving into retail could potentially harm the company’s relationship

with its sales representatives. However, in a statement regarding the new stores, Natura underlined that providing new buying opportunities for Natura products would strengthen the firm’s direct-sales business and be an asset to sales representatives.

Spanish fragrance house Eurofragance has opened a new creative center in Dubai, UAE. The company invested €2m in the new 1,000m2 (10,763ft2) facility, which will focus on the design and evaluation of fragrances and applications, as well as sample manufacturing. The center also has sales, logistics and corporate development functions. One of the objectives of the new center is to boost sales in air care and personal care. Eurofragance has creative centers in Barcelona and Mexico and plans to open another in

Singapore in the near future.

Results

Hong Kong-based beauty retailer Sa Sa saw its sales fall 10.6% to HK$3.78bn ($487.7m) in the six months ended September 30, compared with the prior-year period. The company’s profit fell 55% to HK$153m ($19.7m). The retailer attributed the sales decline to a number of factors, including the decline in mainland tourists traveling to Hong Kong and Macau, where Sa Sa does the majority of its business, as well as a reduction in spending from Chinese tourists. Sa Sa’s sales in mainland China also fell by 8.7% in local currency terms, while those in Singapore were flat, and sales in Taiwan dropped 2.2%. Online sales dropped 1.4%, the company said. n n n

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Mascara sales in Europe delivered a mixed performance in October 2015, according to data from market-research company NPD. Mascara sales in Spain grew 14% during the period, while those in Italy were up 3%. Both the UK and France witnessed declines, however, with sales of mascara in France down 1% and sales in the UK decreasing 2%.

People

Estée Lauder Companies has named John Demsey executive group president. Demsey will add Clinique and the Men’s Skincare Group to his portfolio while continuing to oversee Aramis and Designer Fragrances, Prescriptives, MAC Cosmetics, Bobbi Brown, Jo Malone London, Bumble and bumble, Tom Ford, Smashbox, Rodin olio lusso, Le Labo, Editions de Parfums Frédéric Malle and Glamglow. Demsey will also lead a newly created Center of Excellence for Creative. The group has also appointed Jane Hertzmark Hudis group president. Hudis will continue

to lead the Estée Lauder and AERIN brands while adding La Mer, Darphin, Origins and Aveda to her portfolio. Hudis is currently global brand president, Estée Lauder. Under her leadership, the Estée Lauder brand’s net sales have grown more than 40%, the company said. These appointments, effective January 1,

2016, follow the announced retirement of group president Lynne Greene.

L’Oréal Luxe is reshuffling its top management in the US. Effective January 1, current division president Carol Hamilton will become group president for the activity. Xavier Vey, current head of Lancôme

USA, will become president and chief operating officer of L’Oréal Luxe USA. Suriya Parksuwan, who joined L’Oréal from spirits firm Remy-Cointreau in June, will replace Vey as president of Lancôme USA. Hamilton will continue to manage

relationships with L’Oréal USA’s corporate teams as well as manage the Luxe division’s shared teams and represent the activity externally, a spokesperson for L’Oréal Luxe USA said. n n n

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Mascara sales in Europe % change October 2015 vs October 2014Country % changeFrance -1Italy +3Spain +14UK -2

Source: NPD BeautyTrends

The

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z News roundupn n n Elizabeth Arden veteran Joel B Ronkin joined US firms Fekkai Brands and Luxe Brands as ceo on December 1. Prestige beauty firm Luxe Brands, which owns the Ariana Grande, Josie Natori and Hawaiian Tropic labels, jointly acquired the Frédéric Fekkai brand with UK-based Designer Parfums from Procter & Gamble earlier this year. The partners created Fekkai Brands LLC as a joint venture. Ronkin was most recently president of global fragrances at Elizabeth Arden.

Beauty subscription service—and increasingly retailer—Birchbox has named industry veteran Philippe Pinatel as its president and chief operations officer. He will lead product development, retail, operations and international for the company, focusing on its growth and reinforcing its retail presence. Pinatel was most recently senior vice president and general manager of Sephora in Canada.

Germany-based subscription beauty box firm Glossybox announced that Charles von Abercron, its founder and managing director, is stepping down on December 31. He will continue to consult for the company. On January 1, Caren Genther-Kappesz will become Glossybox’s new ceo. She has previously held top management roles at digital players including eBay’s Shopping.com subsidiary, Brands4friends and Kalahari.com.

Cosmo International Fragrances has appointed Lucas Sieuzac as senior perfumer, based in the US. Sieuzac previously spent 20 years working for Symrise in Paris.

Launches

As part of its collaboration with fashion brand Balmain, H&M launched a limited-edition Balmain x H&M fragrance on December 3. The unisex scent contains notes of tonka bean and jasmine, a heart of cedar and white wood and a base of musk and sandalwood. It will be sold in a selection of the retailer’s H&M Beauty stores, priced at €34.99. The Balmain x H&M fragrance was created in partnership with Interparfums, the license-

holder for Balmain scents.

Trade shows

Trade show organizer Informa is transforming its Beyond Beauty Paris event for 2016. The show will now be split into two separate events, one in June and one in September. The first, called Alternative Fragrance & Beauty, taking place from June 16-18, 2016 in the Carreau du Temple in Paris’ Marais district, will be dedicated to cosmetics and alternative perfume brands. Around 100 exhibitors are expected to take part. For the first time, day one of the event will be open to the public. Features from Beyond

Beauty including the Beauty Challenger Awards, the Rare Perfumes Meetings and the Zoom space, to be conducted in the perfume zone, will form part of the new event. There will also be a conference program focused on skincare, fragrance and trends. The second event, called Beauty Factory, will be dedicated to the entire supply chain for

perfumes and cosmetics. It will take place from September 13-14, 2016 at Paris’ Palais des Congrès. n



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Announcements of the first NYX store openings in California, US and Toronto, Canada, have generated excitement in the blogosphere. Bloggers have also responded positively to a pop-up boutique for the brand in London’s Selfridges, and expect more pop-up locations or a store to follow.

Western retailers like Sephora and Urban Outfitters have been praised for their Korean brand offerings. Recently, Sephora further fuelled the buzz following its feature on Korean beauty. Popular brands including Too Cool for School, TonyMoly and Skin Food are appreciated for their unique packaging, ingredients, textures and affordability.

Bloggers are applauding the arrival of Feelunique’s e-commerce site offering a host of British brands in France. The site is also praised for its attractive deals and free delivery for purchases over €15.

News of Michelle Phan parting ways with L’Oréal is expected to disappoint fans, say bloggers. There is also speculation about the success and future plans for Phan’s Em Michelle Phan line, which has been sold to Ipsy.

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P&G Prestige vice president of global marketing development and operations Jose Maria Marquiegui talks about the challenges facing the travel-retail channel

Challenges ahead

What are your expectations for the rest of the year and 2016?This has been a difficult year for the industry. [MERS, changing Chinese travel, Brazil and Russia] are all impacting business. What has happened to Hong Kong and Macau has had a great impact on anyone who’s a local player. One positive of [operator] consolidation is that if you are a travel retailer in Macau airport, you’re probably struggling a lot, but if you’re a global player, you’re maybe winning in Istanbul if you’re losing in Macau. Dubai was in crisis last year, but it is growing in the double-digits this year. Kuala Lumpur keeps growing—it’s becoming a key hub. Ten years ago, Istanbul was a nice tourist destination, but it certainly was not the fantastic luxury destination it is today; these things come and go. I don’t want to play down the impact of this crisis, but these are [external] and not structural issues. In the travel-retail channel, with Gucci Bamboo, we have had very good results.

We launched as an avant-première in travel retail and it has ended up being stronger than Boss Ma Vie [launched in summer 2014]. We have been in the top five, so we have been very happy with the way it has been developing in the last part of the year. Hugo Boss’ Boss The Scent launched with a world première with Heinemann, and we are pleased with it and very hopeful for the next year.

How is the integration of P&G Prestige into Coty progressing?Today, we are P&G and we are very focused on being P&G; the merger has not happened [yet]. We have enough on our plate, and we are very focused on doing as much as we can with our iconic brands and with new initiatives. [The merger] will create the number-one company for fragrances, the number two for cosmetics, and number three for salon professional, so this is a very exciting future. What is important is that we are creating a new industry leader. We have to get authorization for the merger and the day we can merge, it’s going to be great, but today we can only announce Coty’s intention to buy these brands from P&G and create this new company.

What are the biggest challenges facing the travel-retail industry?We have to make this category grow again. We have to make more people buy fragrances, make them fashionable again and we have to increase the penetration of fragrances. In travel retail, we have to convert walkers into shoppers. Passengers are a great thing for the airports, but it’s shoppers that keep this industry moving, and the rate of conversion is the biggest challenge we face. n n n

”P&G Prestige vp of global marketing development and operations Jose Maria Marquiegui

“

P&G Prestige vice president Jose Maria Marquiegui

Passengers are a great thing for the airports, but it’s shoppers that keep this industry moving, and the rate of conversion is the biggest challenge we face



Inte

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w P&G Prestige vice president Jose Maria Marquiegui

”P&G Prestige vp of global marketing development and operations Jose Maria Marquiegui

This has been a difficult year for the industry. [MERS, changing Chinese travel, Brazil and Russia] are all impacting business. I don’t want to play down the impact of this crisis, but these are [external] and not structural issues

“

s P&G has opened pop-ups for Dolce & Gabbana Velvet at Qatar airport

n n n How can you improve conversion?First, you have to have the right initiatives, the right furniture and the right beauty consultants—something that captures your attention. Very often, the shelf is selling for you and you don’t have beauty consultants. So unless consumers are inspired by the way the goods are presented, why should they buy a perfume, and why should they buy today? They may try today, and they may like it, and consider buying one day. We need to sell the whole proposal in a way that means today’s a good day to buy.We had a Dolce & Gabbana Velvet pop-up store in the old Qatar airport and

had fantastic results, so now we are doing it in the new Qatar airport, which just opened, and we want to expand it even further. The pop-up store creates the right environment for Dolce & Gabbana Velvet, our top premium line. You need to speak to an expert who tells you the brand story, the brand philosophy and gets you into the mood [to buy]. You can do this in a pop-up store, but it is more difficult to do directly from the shelf. [Initiatives like these are how] we are betting on helping the travel-retail segment become a buyer destination rather than just a walker destination. We believe we can do it with all of our brands.

How do you view the recent consolidation of travel retail?It’s an opportunity to work better together and to use [operators’] scale and our scale to penetrate better and to have better people working together on analyzing data. I’m an expert on brands, shoppers and consumers and they are experts on their airports; if we can get all that information together and analyze it in a combined way, the future is going to be great. I see more of an opportunity coming out of the combined scale than any threat. Consolidation in the industry is a fact of life, it has been happening for 30 years, so if we have not got used to it, it’s about time. n

s Gucci Bamboo and Boss The Scent have both seen strong results when they pre-launched in travel retail



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An analysis of the continued popularity of Korean brands

Seoul style

South Korean brands

K-Beauty is currently the international calling card of the cosmetics world, as manufacturers and retailers look to South Korea as a source of growth. But the internationalization of South Korea’s beauty industry is a recent phenomenon, while the local market itself remains extremely insular, an atypical introvert on the global beauty market.It is estimated that only 15% of South Korea’s beauty market is taken up by

international brands. Korea’s two market leaders alone, AmorePacific and LG Household & Healthcare, account for between 55% and 70% of sales, according to estimates, and continue to see impressive growth rates. AmorePacific Corporation announced a 15.7% increase in domestic sales for the first nine months of 2015 to 2.68 trillion won ($2.3bn). While LG did not indicate separate results for its domestic business, the company said it saw 17.6% sales growth for its Beautiful division in the third quarter, to 565bn won ($487.7m). LG said in its most recent report that its domestic market share in the prestige segment had grown from 17.5% at the end of the third quarter of 2014 to 20% in the second quarter of 2015. n n n

s Domestic brands dominate the beauty market in South Korea

Korea’s cosmetics exports and imports Nine

months 2014 $bn

Nine months

2015 $bn

% growth nine months 2015/2014

FY 2014 $bn

% growth

2014/2013Cosmetics exports 1.06 1.73 +63.4 1.59 +53.5Cosmetics imports 0.687 0.709 -3.1 0.950 +8.2

Source: Korea International Trade Association (KITA)

”Inspiration & Information general manager Florence Bernardin

The Korean government wants to make cosmetics one of the key pillars of the economy

“



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n n n “The market for Korean brands in Korea is strong and will remain so for a long time,” comments Singapore-based strategic advisory firm Martin Roll Company ceo Martin Roll, author of Asian Brand Strategy. “If you look at almost any category—cars, retail, technology, mobile phones, home appliances, even food,—[Koreans] prefer their own brands,” he continues. “There is this sense of isolation in Korean culture. If you speak to most of the international brands, they’ve always found Korea very hard to crack.” Leading Korean brands like Sulwhasoo, Innisfree (AmorePacific) and Belif (LG)

are good at focusing on a story built around traditional remedies (a category that performs well, along with brands centered on product safety and surgical concepts). International brands like Biotherm and Kiehl’s (both owned by L’Oréal) have been more successful in South Korea than other foreign labels, partly because of their storytelling, according to France-based consultancy Inspiration & Information general manager Florence Bernardin. In make-up, Estée Lauder Companies-owned brands MAC and Bobbi Brown do well, the only two international brands to make the top 10 color cosmetics ranking according to Euromonitor International. (Although skincare dominates the market, representing around 50% of beauty sales, make-up is the second biggest segment, and is growing fast in department stores, according to observers.)With so much of the market taken up by just two

players (Able C&C, the owner of Missha, is number three), there should logically be little room for smaller players. But this is not so. AmorePacific’s growth from a small, local company 20 years ago to an international beauty player today is a source of national pride to Koreans, Roll says, and is inspiring a new generation of entrepreneurs. “That’s going to fuel other industries, and will attract talent to the industry. Whether you’re a laboratory, or a designer, or an economist, it’s a major win for Korea.”The Korean government has also been paying

attention, realizing that both at home and abroad, cosmetics represent a growth opportunity for Korean industry, which until recently was mainly focused on electronics. “The Korean government wants to make cosmetics one of the key pillars of the economy,” says Inspiration & Information’s Bernardin.

Exports accelerateKorean cosmetics exports grew 63.4% in the nine months to September, according to data from the Korea International Trade Association. That rate has accelerated from growth of 53.5% in full-year 2014, 26% in 2013 and 19% in 2012. n n n

Top 10 make-up brands in South Korea 2014Ranking Brand

1 The Face Shop (LG Household & Healthcare)

2 Etude (AmorePacific Corp)3 Hera (AmorePacific Corp)4 Iope (AmorePacific Corp)

5 Missha (Able C&C)6 Sulwhasoo (AmorePacific Corp)7 Laneige (AmorePacific Corp)8 MAC (Estée Lauder Companies)9 Bobbi Brown (Estée Lauder Companies)

10 O Hui (LG Household & Healthcare)Source: Euromonitor International

Top 10 skincare brands in South Korea 2014Ranking Brand

1 Sulwhasoo (AmorePacific Corp)

2 The Face Shop (LG Household & Healthcare)

3 Hera (AmorePacific Corp)4 Missha (Able C&C)5 O Hui (LG Household & Healthcare)6 Iope (AmorePacific Corp)7 The History of Whoo

(LG Household & Healthcare)8 SU:M37 (LG Household & Healthcare)9 SK-II (P&G)

10 Isa Knox (LG Household & Healthcare)Source: Euromonitor International

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ght South Korean brands

n n n AmorePacific, in particular, is rapidly expanding internationally, not just in Asia, but also in North America, where Laneige recently launched in Canada via Sephora stores, following its successful introduction in the US in 2014. Other brands are also making inroads stateside. Dr Jart+ (in which Estée Lauder Companies (ELC) announced in October that it had made an investment), and TonyMoly, for example, are sold by Sephora in the US. The influx is also being driven by the arrival of a handful of websites like Momomango, Soko Glam and Peach and Lily, which offer K-Beauty brands to US consumers.

K-beauty acquisitions lie aheadThe popularity of Korean brands both at home and abroad is expected to lead to more acquisitions of these players. Indeed, ELC’s investment in Dr Jart+ is expected to be the first in a wave of such transactions. “South Korean brands can bring a new impetus to the market, a new routine, and can recruit new customers,” says Bernardin. “Korean brands and products have less of an ‘Asian’ image [than brands from other countries in Asia], because Korean culture remains quite a vague concept in people’s minds. There will be further acquisitions, there are brands that everyone is looking at,” she adds.And since international brands have traditionally struggled to carve out a place in

the market, acquiring a brand is one way in, Roll adds. “The big players are dying to know what’s going on inside South Korea, and one way to really get inside the Korean growth engine is to acquire a brand; you’re going to see that accelerating more over the years to come,” he comments.Targets, however, may be hard to come by. A few months ago, rumors abounded

regarding make-up brand Too Cool For School, while other independents include make-up artist brand Son & Park, eyeliner specialist Clio, lip color brand Peripera, as well as TonyMoly and Holika Holika. But the pace of growth, and the creation of more entrepreneurial startups in such a fast-paced environment, is likely to mean that within a few years, more potential targets could make the list longer. “You are going to see a surge of new brands,” says Roll. “Not in the hundreds, but in the dozens, and some of them will be winners, and scale to a level where they make sense and become attractive [as acquisition targets].”As to the fast-paced rate of innovation,

one of the attractions of the Korean market right now, it looks set to continue for some time to come. “Koreans are great at innovation, they take that very seriously. In terms of R&D [investment] related to GDP of the country, it’s one of the highest ratios in the world,” says Roll. All this comes together to suggest that for the foreseeable future, South Korea is likely to remain an epicenter of the cosmetics universe, bringing growth to the industry—both at home and abroad. n



The big players are dying to know what’s going on inside South Korea, and one way to really get inside the Korean growth engine is to acquire a brand; you’re going to see that accelerating more over the years to come

“

”Martin Roll Company ceo Martin RollKorea: a tough market for international players Part of the problem in Korea for international premium brands has been their reliance on the department-store channel, which continues to struggle, according to observers. “The market is saturated in terms of the brand offer. There is a plethora of brands, and I don’t know how the consumer finds her way among the offer on the market,” says France-based consultancy Inspiration & Information general manager Florence Bernardin. “Department stores are saturated, and sales are sluggish, because there is a race for price. Korean women are very careful spenders,” she comments.Meanwhile standalone stores, the internet, home shopping

and beauty boxes are all strong channels competing for part of the beauty pie, she says. Local players are generally present in a combination of these channels.



Despite a slowdown in many Asian markets, organizers of beauty trade show Cosmoprof Asia said that this year’s event was a record edition. Some 63,241 visitors attended, growth of 5.5% on last year. There was a significant increase in visitors from the US and Europe, as well as from emerging markets, such as Chile, Thailand, Ukraine and Vietnam. The show hosted 2,504 exhibiting companies, up 6% from 2014. Cosmoprof Asia director and UBM Asia executive vice president Michael Duck

commented that the expansion of the show reflects the development of business in the region and said that growth will continue despite a tougher economy in key countries, such as China. “There is no doubt that China will continue to grow. The recent economic problem is a big blip, but overall the trend is upwards, because cosmetics have become a necessity for the Chinese. There are also new big players like Korea and Japan, marketing into China and ASEAN, which has changed a lot. People come to the show for trends just like they did 20 years ago, but the difference now is that there is a lot more to see.”There were two new areas at the show to highlight key trends in the region. Spot on

Beauty covering 3,700m2 (39,826ft2) was dedicated to companies focused on finished products for the spa and wellness, hair, nail, cosmetics and personal care sectors, while Discover Trends showcased products from three fast-growing segments: natural and organic, baby care and men’s grooming. Masks and small-format packaging were also key trends. Given the growth of Cosmoprof Asia, next year’s edition will have a different format

spread across two venues and will last for four days instead of three. From November 15-17, the Asia World Expo will host exhibitors of ingredients, machinery and equipment, packaging, contract manufacturing and private label. From November 16-18, the Hong Kong Convention & Exhibition Centre will host exhibitors of finished products.

BW Confidential reports on what was seen and heard at Cosmoprof Asia, which took place in Hong Kong from November 11-13

Trends from the East

Cosmoprof Asia

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Cosmoprof AsiaTook place: from November 11-13 in Hong KongNo of visitors: 63,241, +5.5% vs 2014No of exhibitors: 2,504, +6% vs 2014

Heard in show: industry players on Asia

“There is still great potential in countries like Japan, Malaysia and Singapore. China is doing well, but the target is the low, rather than high end, as consumers there are looking for high-quality products, but are very price conscious.”Caseti project management executive Bryan Wong

“In China we need to take into account a new channel: Wechat as a distribution channel is definitely a reality. Tier-three, tier-four and tier-five cities are growing the fastest and local brands are more familiar with these cities than international players and they are looking to merge to become stronger there.”Intercos strategic marketing manager Asia Anna Dato n n n

There is no doubt that China will continue to grow. The recent economic problem is a big blip, but overall the trend is upwards, because cosmetics have become a necessity for the Chinese

“

”Cosmoprof Asia director and UBM Asia executive vp Michael Duck


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n n n “The market has changed considerably over the past five years: brands are attracted by more premium packaging, and there are more Chinese brands in this premium market; this is very new. Our biggest challenge is to offer sophisticated and complex packaging within a short period—time to market is becoming the most important asset.”HCP Packaging France president Eric Firmin

“Dual, multifunctional and easy-to-use products are more important in Asia, with waterproof and smudge-proof products also popular. Demand from Asia is becoming more sophisticated; there are more Asian trendsetters, led by Korea.”Schwan Stabilo Cosmetics area sales manager Jeena Park

“[Traditionally] China is not a fragrance market, but things are changing with an increase in domestic consumption of perfumes. We win more and more projects with big Chinese manufacturers because they don’t trust local producers. Although this means that they need to import, which increases the price and lead time.” Parfex area sales manager Alexandre Levet

“The attitude to fragrance among Asians seems to be changing. Before there was no offer designed for them—it was either cheap fragrances or high-end products like Chanel. They have not been exposed to fragrance that much, but this is evolving.”Centdegres design director, managing partner Elie Papiernik

“Asia, especially China, is becoming more mature and appreciative of high technology and safe products. As the Chinese market is going upscale, Asian consumers realize the good price-quality ratio of French products. This demand for higher quality is a trend that will keep growing.” Cosmetic Valley export & communication director Franckie Venet

“In China, although consumers have more disposable income, they make informed purchases and a lot is done online. Brand awareness, social media and key opinion leaders are important to develop the Chinese market. Managing a new Western brand in China is definitely not an easy job.”Zwilling Beauty Group APAC business development manager Oliver Hart

“Asian consumers’ shopping habits have changed noticeably. As incomes have risen, they are becoming more Westernized and sensitive to quality. They have increased spending on cosmetics and healthcare products and are willing to pay premiums for high-quality goods.” Genie-S vice president Ralph Bou Nader

Seen in showThere were a wealth of natural products at the show. These included Wedge Australia, which presented an anti-aging daily moisturizer specifically designed for men and made from seaweed and organic olive oil; Lafe’s Natural Bodycare, which showed a n n n

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n n n range of sustainable personal-care products (deodorant, babycare, haircare) that claim to be free of glycols, parabens, synthetic fragrances and chemical preservatives, and New Zealand-based Supreme Biotechnologies, which exhibited Astas True Radiance, a product that features natural antioxidant Astaxanthin to target skin aging.

Chinese company Zhongshan Honghai Plastic Technology presented its patented Fruit Mask Machine to capitalize on the growing trend for masks. The patented appliance can be used by consumers at home to make masks from fruit and vegetables.

UK-based brand Below The Belt claims to have come up with a new segment in the men’s market. The company says that its products are specifically designed to “recognize the issues men face below the belt”. The range comprises three products for the groin area: Fresh and Dry Balls, a gel texture anti-perspirant; Waterless Shower, an on–the-go cleanser, and Sports Lubricant, a moisturizer.

Korean company Greencos presented its 5-in-1 Deoproce UV Waterful Cushion SPF 50+ PA +++, to take advantage of the trend for multi-functional products and cushion cosmetics. The make-up product, which comes in powder form, also claims to moisturize and offer UV protection, anti-wrinkle benefits and whitening properties.

Korean brand Ahvogo showed convenient packaging for its anti-acne products. The products come in capsule formats and target teenagers. They are currently sold only in Korea.

Korea-based Salty Family Group presented the Real Egg Pack, a set of eight egg-like mini capsules that whiten and moisturize the skin. The product launched in 2015 and is distributed in Korea, Hong Kong and China.

Brushonblock presented its eponymous refillable sunscreen product in the form of a brush. It costs $30 ($16 for a refill) and is sold online, in spas and at dermatologists in the US, UK, Belgium, The Netherlands, Malaysia, Philippines, New Zealand and Australia.

US-based company Careplus Skin Care presented the Sonulase LED red light cleansing brush. The beauty device combines light therapy to stimulate collagen production. Also on show was UV Cleanlight, a multifunctional product combining light therapy, UV Cleanlight Technology and exfoliating bristles, and which claims to remove impurities, kill bacteria and act as an exfoliator.

Taiwanese company Hair O’right presented the Tree in a Bottle line. The formula uses recycled coffee beans and the brown color of the recyclable plastic packaging is created using natural coffee. Each bottle includes three coffee beans that can be planted together with the packaging after use to grow a tree. The range consists of more than 100 products in the shampoo, conditioner, body wash, hair tonic and hair styling categories. The newest addition is “O’right hair tonic for her”, a product made of 96% natural ingredients addressing female hair loss. n


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Chanell Opened: October 2015l Location: Paris, France

l Size: 72m2 (775ft2)l Special features:

make-up stations, men’s area, seasonal installations,

staffed by make-up artists and fragrance experts

Chanel has chosen to move outside its familiar quarters in Paris’ Golden Triangle and set up shop in the trendy Marais district for its first permanent beauty standalone in the French capital. The brand describes the decision as a desire to tell its story differently, and as a nudge towards the irreverent spirit of brand founder Gabrielle Chanel.The 72m2 (775ft2) space at 40, Rue des Francs-Bourgeois is housed in part of a former

private mansion, and combines elements of historic architecture with contemporary design features. Its walls are a stark white, but are transpierced in places with bare stone sections. The floor is made of traditional ‘tomette’ clay tiles, worn with age, and an old well and black metal supports are also integrated into the design. Product displays are also formed from black metal, and appear suspended from the ceiling. Mirrors, meanwhile, play an integral role in the design, with a reflective ceiling as well as round, porthole-like mirrors of various sizes that are peppered around the walls.The store is designed to encourage customers to stay and discover more about the

brand, and features make-up stations permanently staffed by make-up artists and fragrance experts on hand to offer advice. Specially created leather sofas inspired by those in Chanel’s private apartments on Rue Cambon encourage customers to relax, as do a selection of books, some of which are for sale, others just to be read in situ. A boudoir-like men’s space offers the brand’s masculine fragrances and doubles up as a private area for workshops. The whole space is designed to be adapted with new seasonal installations, and one

wall is reserved for new artistic interpretations of brand imagery and iconic products from Chanel’s creative team. Chanel’s existing beauty standalone in Paris, a pop-up on Rue Saint-Honoré, is set to close before the end of the year. n

Chanel has just opened its first permanent beauty standalone in the French capital

Moving house





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s Store fittings are suspended from the ceiling in Chanel’s new beauty space

s Mirrors play a key role, both in the ceiling and as round, porthole-like features on the walls

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CommentThe buzz: News roundupNetwatchInterview: P&G Prestige vice president of global marketing development and operations Jose Maria MarquieguiInsight: South Korean brandsShow review: Cosmoprof AsiaStore visit: Chanel's beauty standalone, ParisSubscribe to BW Confidential

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