Medical Background Skincare Brands Sought after by Consumers
- Chaileedo Press
- Sep 28, 2022
- 4 min read
L'Oréal has acquired Skinbetter Science, a brand that L'Oréal says is a perfect addition to the brand portfolio of L'Oréal's Active Cosmetics division. It believes the high-growth U.S. brand has great potential for international growth.
On September 23, L'Oréal announced on its website that it had signed an agreement to acquire Skinbetter Science, a U.S. skincare brand, on undisclosed terms, and that the transaction is expected to close in early Q4 2022.
Acquisition of one of the fastest growing medical skincare brands in the US
Publicly available information shows that Skinbetter Science was co-founded by pharmaceutical industry professionals Jonah Shacknai, Justin Smith and Seth Rodner in 2016. According to L'Oréal, it is now one of the fastest growing medical skincare brands in the U.S. Skinbetter Science is known for developing innovative products with active ingredients for anti-aging, moisturizing, cleansing, exfoliating and sun protection.
Upon completion of the acquisition, the current brand leadership team will continue to run the business and will be integrated under the leadership of Christina Fair, President of L'Oréal USA's Active Cosmetics Division.
CHAILEEDO found that Skinbetter Science has entered the Chinese market with an overseas flagship store in Tmall Global, positioned as a "high-end American institutional skincare brand". The brand storefront hosts 29 products, covering such categories as essence night cream, face wash, eye cream, sunscreen, etc., mainly focusing on anti-wrinkle, wrinkle reduction, whitening, moisturizing and other effects. The lowest priced single product is the "Interfuse Treatment Cream" at $29.7/5ml. The highest priced single product is the "Alto Defense Serum" at $219.4/30ml. The "Alto Defense Serum Free Pack (5ml)", priced at $25, sells 500+ per month and becomes the highest-selling product in the store.
In response to the acquisition, Myriam Cohen-Welgryn, Global President of L'Oréal Active Cosmetics, said Skinbetter Science is a perfect addition to L'Oréal Active Cosmetics' brand portfolio and will further contribute to the long-term mission of L'Oréal Active Cosmetics, a high-growth U.S. brand. L'Oréal believes has great potential for international growth.
Skinbetter Science's products are currently available primarily through a network of leading dermatology, plastic surgery and medical aesthetics practices in the United States. In the past 12 months ending August 31, 2022, Skinbetter Science generated sales of nearly $95 million.
Why are skincare brands with medical backgrounds favored by consumers?
The "Rational Skincare in the Post-Epidemic Era White Paper" released by CBNData shows that consumers' skincare concerns have shifted toward safety, efficacy, and ingredients in the wake of the pandemic. As a result, compared to mass market daily skincare products, skincare products with medical background are favored by more and more consumers due to their more segmented, targeted and safer ingredients for skin types.
CHAILEEDO notes that medical background skincare brands are favored by consumers partly because of their stronger efficacy, such as the B5 cream of LaRoche-Posay, a brand of L'Oreal's active cosmetics division, which is very popular among Chinese consumers. For example, L'Oreal's LaRoche-Posay Baume B5 is very popular among Chinese consumers. On the Chinese sharing platform Xiaohongshu, there are 40,000+ notes related to the LaRoche-Posay Baume B5. Consumers share the most about the product's acne-fighting and repair functions. On the other hand, because of its medical background, consumers are more confident about the safety of its products.
It is worth noting that the active cosmetics division that Skinbetter Science entered is one of L'Oreal's most rapidly growing divisions, including brands such as LaRoche-Posay, CeraVe, SkinCeuticals and Decléor. Among them, LaRoche-Posay has previously been deeply bounded to medical care. For example, LaRoche-Posay held the LaRoche-Posay Blue Ribbon Caring for Cancer Patients’ Skin Health Summit in collaboration with authoritative experts from the Dermatologists Branch of the Chinese Dermatologist Association (CDA) and the Chinese Society of Clinical Oncology (CSCO). In the reviews of the forum, many viewers of the live streaming said that this public welfare activity was very meaningful.
For the fiscal year 2021 ended December 31, L'Oréal Group Active Cosmetics Division sales rose 30.3% year-on-year to $3.8 billion, contributing 12.2% of the Group's sales. For the first half of fiscal year 2022, L'Oréal Active Cosmetics Division sales rose 20.9% year-on-year.
Among the Chinese brands, the success of Winona is inseparable from its tie to its medical background. The medical profession has further strengthened the roots of Winona's core technology. In the process, Winona has established deep links with dermatologists, precipitating and accumulating a lot of academic results. Currently, Winona's products have been clinically verified and their effects observed in 63 Chinese and international hospital dermatology departments. In "the Red Book Essence of Clinical Application of Winona's Efficacious Skin Care Products" released by Winona, a total of 128 papers on basic research and clinical validation of Winona's products published in core journals in China and abroad are included, which are highly concerned by the dermatology industry. According to the financial report of Winona's parent company, BTN, Winona revenue accounted for 98%. It is reported that BTN 2022 first half of the company achieved revenue of 2.050 billion yuan(about $283 million), up about 45.19% year-on-year.
It is worth noting that this is not L'Oreal's first foray into medical background skincare brands. In July this year, L'Oreal's French luxury skincare brand Carita into the Chinese market, would open its first boutique in Asia on August 1 in Nanjing Deji Plaza. It would be stationed in Beijing SKP counter on the same day. The brand positioning is high-end medical beauty hospital products. L'Oréal Group has noted that the active cosmetics division is growing much faster than the dermocosmetics market by strengthening its cooperation with healthcare professionals. It can be seen that L'Oreal may continue to be tied to its medical background in the future to provide a safe and effective approach to skincare.
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