Hermès to Unveil Eye Makeup Shows A Market Share War
- Chaileedo Press
- Mar 20, 2023
- 5 min read
In recent years, the luxury group beauty business is in full swing and It is undoubtedly a strong opponent that other high-end beauty brands cannot ignore.
Recently, according to JOURNAL DU LUXE, the French luxury brand Hermès will launch its first eye makeup series this autumn. This will be a further expansion of Hermès' business in the cosmetic sector since March 2020 when it first launched beauty products.
In fact, it has been common for luxury brands to enter into beauty. A number of luxury brands, including Hermès, Gucci and Burberry have deployed beauty lines in the past few years. So, what does it mean for brands which only focused on cosmetics? Did the beauty lines that luxury brands have bet on in the last 3-5 years go well?
Hermès eyes on $10-billion eye makeup sector
As a top luxury brand, Hermès' ambition to enter the beauty industry has been well-documented for a long time.
In March 2020, Hermès launched its first lipstick collection, Rouge Hermès. It is understood that its formulas were developed by Jérôme Touron, who has designed beauty products for Chanel and Dior. Its product quality is personally controlled by Hermès CEO Axel Duama. This shows the importance of Hermès attached to the beauty sector.
In an interview with the press, Pierre-Alexis Dumas, Artistic Director of Hermès, also said that Hermès had been inspecting its beauty business for at least 15 years.
The launch of its first lipstick has reached the brand's expectations. Hermès' financial results showed that the sales of its Perfumes and Beauty increased by 21% year-on-year in the first quarter of 2021. Hermès pointed out that the lipstick range made a significant contribution. For the full year 2021, sales in the same sector rose by 46.4% year-on-year.
Following the positive feedback from the first make-up collection, Hermès continued to refine its product line with the launch of Rose Hermès collection and Plein Air, a facial foundation collection.
Recently, some media reported that Hermès would soon unveil its eye make-up in the autumn. According to JOURNAL DU LUXE, the collection will include eye shadows, eyeliners, eyebrow pencils, brow pencils and more. This will be the final piece of the puzzle for its full line of color cosmetics.
Then why does Hermès launch its eye makeup products? Firstly, from a mass perspective, global market research firm MRFR estimates that the global eye makeup market will reach $19.6 billion by 2025. MRFR also revealed that the market is expected to grow by a significant 6.6% from 2019 to 2025.
Meanwhile, according to the 2022 Chinese Consumers' Commonly Used Makeup Category Survey released by iiMedia Consulting, a whopping 56.5% of consumers commonly use eye products. These figures indicate the huge potential of the eye beauty market.
Then, Gucci, Dior, YSL and other luxury brands, which are Hermès' peers, have deployed their eye makeup products. They have established a complete makeup line containing lips, face and eyes and have achieved excellent market results. So Hermès won’t miss it.
Giant cosmetic group helps luxury fashion brand expand beauty sector
As the market such as leather goods, bags and fashion become increasingly saturated, several luxury brands have entered the beauty industry to seek new opportunities for performance growth in recent years.
According to incomplete statistics from CHAILEEDO, so far in 2019, there have been brands that ventured into beauty and increased their presence in the beauty sector including Prada, Hermès, Valentino, Gucci, Burberry, Belgian high fashion brand Dries Van Noten, French luxury brand Balmain and others.
Looking at the business models of these new luxury brands in the beauty business, CHAILEEDO found that there are two models: self-management and authorization to head beauty groups to operate on their behalf. But Hermès holds the autonomy of the beauty business in its own hands, i.e. raw materials, product design, etc. all come from the Hermès company. Same as Chanel.
Unlike Hermès and Chanel, more luxury brands entrust their beauty business to cosmetics groups in order to take full advantage of their strengths in research and development, production and sales to extend the beauty market. For example, L'Oréal Group has the beauty business licenses of several luxury brands such as YSL, Armani and Valentino. Estée Lauder has been cooperating with Tom Ford for more than ten years and Estée Lauder Group obtained the beauty product development license of Balmain last year. Coty is responsible for the beauty business of luxury brands such as Gucci and Burberry.
The luxury brands mentioned above now also have a relatively increasing share in the beauty market thanks to its beauty sector. They are important "cash cows" for giant cosmetic groups. For example, Armani and YSL beauty, managed by L'Oréal, reached the 1-billion-yuan mark in L'Oréal China as early as 2018. Tom Ford Beauty, owned by Estée Lauder, is set to break $1 billion in sales in the next few years, which is why Estée Lauder eventually acquired Tom Ford.
Due to the huge potential of the global beauty market and the huge success of luxury brands in the beauty sector, there has been a lot of momentum in recent years for luxury groups to take back their agency rights and run the beauty business themselves.
Typically, Kering Group, Gucci’s parent company, officially announced the creation of its beauty division on February 3 this year. It appointed Raffaella Cornaggia, who has worked for several companies including L'Oréal and HR, as CEO of Kering Beauty. With the creation of the beauty division of the Kering Group, many industry insiders believe that it is only a matter of time before it gradually withdraws its authorization for the beauty business from various cosmetic groups.
Luxury brands launching cosmetics shows “a market share war”
As mentioned before, Chanel, YSL, Tom Ford, Hermès, Gucci and other brands launched the beauty line and their performance is very good.
Relying on the deep cultural heritage and brand reputation carried by the brand, luxury brands have quickly completed their accumulation in the beauty market in a few years.
In particular, the current consumer demand for high-end products has led to the rapid development of luxury brands' beauty lines. 2020 saw the launch of Hermès' first make-up. Despite a significant year-on-year decline in sales in the fragrance division due to the pandemic, Hermès achieved a 37.8% increase compared to 2019. (The Hermès fragrance division is renamed Perfumes and Beauty in 2021)
According to Hermès' 2022 financial report, Perfumes and Beauty reported sales of €448 million, up 16.4% year-on-year. In addition to being driven by new fragrance products, the new facial primer collection Plein Air also contributed to the division's growth.
It is understood that Gucci also has great growth. Its first-ever 58-shade lipstick collection sold over a million units in its first month of launch in 2019.
Luxury Institute CEO Milton Pedraza said in an interview that Gucci’s re-entry into the makeup space may have a larger impact on prestige makeup. “So it is a market share war.”
In Coty’s FY2021 report, it especially praised Gucci, noting that it was already among the top 25 cosmetic brands in China. It is also shown that Gucci fragrances are in the top three in most key markets and Gucci makeup retail sales in the US market were up by 40%.
In 3-5 years, the beauty line from luxury brands has become known to consumers around the world, which showed the conspicuous value of the luxury brand's aura. They are undoubtedly strong rivals to other high-end beauty brands. And as Hermès continues to invest in the beauty sector, the war for high-end beauty will become intense.
Comments