L’Oreal Keeps Top 1 as World’s Most Valuable Brands and Estee Lauder Follows

L’Oréal remained Top 1 in the report on Cosmetics 50 2022, which represents the world’s most valuable cosmetics brand. Estee Lauder followed L’Oreal as the Top 2. It is worth noting that L’Oréal achieved double-digit growth in China. As for Estee Lauder, despite double-digit growth in e-commerce it was still unable to offset the decline in physical retail, with sales of skincare and cosmetics in particular showing declines.

According to the report on Cosmetics 50 2022 released by Brand Finance(the world’s leading independent branded business valuation and strategy consultancy), the world’s most valuable 50 brands have been shown up. L’Oreal has kept its performance as the Top 1.

L’Oréal (brand value up 10% to $11.2 billion) remains the world’s most valuable cosmetics brand. After a tough two years due to the COVID-19 pandemic which substantially reduced cosmetics sales across the world, the brand value of L’Oréal has almost returned to its pre-pandemic value.

L’Oréal continues to lead the global cosmetics industry on the back of its valuable brand portfolio, led by the L’Oréal Paris brand. The French brand has built significant value over 100 years of operation by continuing to innovate and acquire complementary brands that build upon its significant history, value and tradition. This year has seen a transition of leadership from outgoing CEO Jean-Paul Agon, who led L’Oréal for 15 years, to incoming CEO Nicolas Hieronimus. Industry analysts believe that the promotion of key lieutenant Hieronimus from within represents an effort to build on the existing strategy to lead the brand out of the pandemic.

Annie Brown, an associate, from Brand Finance said that L’Oréal is-again-the world’s most valuable cosmetics brand, but with consumers forecast to increase spending as they reemerge from the pandemic, the brand has significant growth opportunities. The key challenge for new CEO Hieronimus will be to serve as an effective brand guardian for L’Oréal as it seeks to return to growth, especially throughout Asia.

Furthermore L’Oréal reported on April 19 that it gained $9.82 billion with a rise of 19% year on year. With double-digit growth in mainland China, L’Oréal continued to outperform the beauty market thanks to successful campaigns for Chinese New Year, Valentine’s Day and Women’s Day. The Group further strengthened its lead in the country, gaining market share online and offline. In Hainan, L’Oréal outperformed the Travel Retail market, which remained very dynamic.

L’Oreal was followed by Estee Lauder, Gillette, Nivea and Guerlain in the top five respectively with Estee Lauder’s brand value soaring 39% this year to be the fastest growing brand.

To the detail, Estée Lauder (brand value up 39% to $7.9 billion) jumped three places from 5th in the cosmetics ranking this year to become the 2nd most valuable cosmetics brand in the world, and the fastest growing. In doing so, it passed Gillette (brand value down 8% to $6.9 billion), Nivea (brand value up 10% to US$6.8 billion), and Guerlain (brand value up 8% to $6.1 billion) in brand valuation.

It is understood that On May 3, Estee Lauder Company released its results for the third quarter of the fiscal year 2022. In the three months ended March 31, Estee Lauder Company sales increased 10% year-over-year to $4.25 billion, missing market expectations of $4.31 billion. Its net income recorded $560 million, up nearly 22% from $460 million in the previous year. However, the Estée Lauder Company, headquartered in Shanghai, China, is not immune to the impact of the pandemic. In its earnings report, Estée Lauder Company noted that cases resurfaced in many Chinese provinces beginning in mid-March 2022 and restrictions were implemented to prevent further spread of the virus. Despite double-digit growth in e-commerce it was still unable to offset the decline in physical retail, with sales of skincare and cosmetics in particular showing declines.

It is reported that Estee Lauder began to raise the prices of its brands at the beginning of the year with a price increase of about 2%. According to industry sources, Estee Lauder’s previous price increases in recent years have not been frequent, which is about 1-2 times a year. Each time rise is 1-2 percentage points or so with slowly upward, such as some of MAC’s products last year recommended retail price at $25.7 with two price increases reaching $27.2. Each price increase is floating around 2%.

Estee Lauder’s FY2021 report showed that it achieved revenue of $16.22 billion during the reporting period, up 13% from $14.29 billion in the previous fiscal year. In particular, China was a key engine of growth for Estée Lauder with double-digit growth across all channels in the region. In addition, Estée Lauder’s online sales in the Asia Pacific reached 36%. In 2021, Estée Lauder surpassed L’Oréal and Lancôme at top of the “2 billion club” on the Chinese e-commerce platform Tmall’s Double 11(Chinese Shopping Carnival). “For international well-known brands, after the epidemic, rapid growth in e-commerce is good, but how to maintain this performance of stable, sustainable growth, to investors, the head office is not an easy task. The price increase may also be due to this consideration.” A brand source said.




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