Top 10 Global Beauty Companies in 2022

The Chinese beauty market became the “must-have” for global beauty companies.

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Recently, major global beauty groups such as L'Oreal, Estee Lauder, Unilever, P&G, Shiseido and others all unveiled their 2022 financial reports. Yesterday, Brazilian beauty giant Natura & Co also released its 2022 and fourth-quarter performance. As for now, the latest ranking of the world's top 10 beauty companies has been released.

In 2022, the international economic situation is volatile and the impact of the pandemic is constant. Under this circumstance, what kind of patterns and changes are presented by the top 10 global beauty companies? What trends can be interpreted from the financial reports of these ten companies?

The sales of Top 10 beauty companies over $150 billion

According to the financial report released by Natura&Co, its net revenue in 2022 was $7.7 billion, down 9.5% year-on-year. Among its four major brands, only one brand Aesop made growth with net revenue of $167.6 million, while Natura&Co Latam, Avon and The Body Shop all experienced declines of varying degrees.

With that revenue, this Brazilian beauty group ranked No. 9 in the list of the top 10 beauty groups in the world with Coty just second only as No. 10. It is also the only one of the world's top 10 beauty companies to be based in a non-developed country.

CHAILEEDO found that in 2022, the total sales of the top 10 global beauty companies was $151.7 billion. It is estimated that the size of the Chinese cosmetics market last year was about 750 billion yuan ($109 billion), meaning that the sales of the top 10 global beauty companies last year were about 1.4 times larger than the Chinese market.

In terms of rankings, L'Oréal Group remains the world's number one beauty group with sales of 38.26 billion euros ($41.2 billion). It surpassed second-placed Unilever by a wide margin of $13.3 billion. L’Oreal also achieved the strongest sales growth in the last 10 years with 18.5%.

Unilever, No.2, achieved sales of 25.9 billion euro ($27.9 billion). Estee Lauder in third place achieved sales of $17.74 billion. In fourth to sixth place were P&G ($14.74 billion), Colgate ($14.25 billion) and LVMH ($8.3 billion), while the bottom four companies were Shiseido ($8 billion), Beiersdorf ($7.65 billion), Natura & Co ($6.9 billion) and Coty ($5.3 billion).

In the last three years, the global top three are almost the same, with L'Oréal sitting at number one all year round and Unilever and Estée Lauder battling it out for second place. 2020 sees Unilever in second place, and 2021 sees it overtaken by Estée Lauder in third place.

The rest of the companies are catching up with each other in fourth to tenth place. LVMH moves from tenth in 2020 to sixth in 2022. Shiseido, the only Asian beauty company, drops from sixth to eighth in 2021 and seventh in 2022. Natura&Co which ranked eighth in 2020 moves to seventh in 2021. Then, in 2022, it fell to ninth place.

It should be noted that in the 2020 and 2021 rankings, the sales of Johnson & Johnson included its consumer health segment (including OTC pharmaceuticals and beauty and personal care). But in 2022, Johnson & Johnson split its consumer health business and also reported sales of its beauty and personal care business separately. Therefore, based on the beauty and personal care segment alone, Johnson & Johnson ranked 11th in the global beauty group in 2022, not in the top 10 list. The Coty Group, which has made a strong push in recent years in the beauty segment, especially in the high-end skincare segment, takes its place as the tenth-ranked global beauty company.

Big change on reorganisation and business segments

Although the Global Top 10 beauty companies have not undergone major changes for the third consecutive year, new changes are poised. In 2022 year, the giant beauty groups have also started a new round of organisational restructuring and personnel changes so far in 2022.

In January 2022, Unilever announced a new organisational structure and the elimination of 1,500 management positions, reorganising its three former business units into five business divisions - Beauty & Wellness, Personal Care, Home Care, Nutrition and Ice Cream - each of which will have full responsibility for its global strategy, growth and profits. In March 2022, P&G announced the creation of a specific beauty division (Specialty Beauty), a division that includes brands such as Tula Skincare, Ouai, Farmarcy Beauty, First Aid Beauty and SK-II's North American.

Estée Lauder has consolidated the company's brand portfolio into two clusters, led by two people. The one is Executive Group President Jane Hertzmark Hudis, who leads the skin care and hair care brands. The other one is Stéphane de La Faverie, who has played a key role in Estée Lauder's fragrance portfolio and leads the collection of brands that brings together all of the group's Perfume brands. L'Oréal has also opened a new fragrance division in its L’Oreal Luxe including six "single-axis fragrance brands" (brands in the perfume category only) such as Maison Margiela, Atelier Cologne, Viktor&Rolf, Azzaro, Diesel and Cacharel.

Unlike the above-mentioned companies, which made minor adjustments according to business type and brand category, Shiseido has reorganised and restructured its entire organisational structure at three levels: research and development, supply network and global brand units, abolishing six old departments and creating seven new ones.

Meanwhile, several beauty companies experienced new personnel management. For example, Natura & Co, Johnson & Johnson, Shiseido and Unilever have changed their global hands, while key regions and departments such as Shiseido China, LVMH North Asia, Sephora, Estee Lauder Korea, Unilever China and LVMH Beauty have also ushered in new heads.

It is predictable that as the new structures and leaders start to take effect, the head beauty companies and the global beauty landscape will also see new changes.

Fragrance, hair care, skin science is the new growth

In terms of performance, among the Top 10 of global beauty companies, Estee Lauder, P&G and Natura&Co all saw declines in 2022, while L'Oreal, Unilever, LVMH and Beiersdorf all achieved double-digit growth. In their financial report of the Top 10 of global beauty companies, CHAILEEDO found that fragrance, hair care and skin science are the keywords for growth for these companies in 2022.

Firstly, the potential of the perfume and fragrance segment in the post-pandemic era is huge. The competition for "fragrance" was also getting intense among the major groups. In L'Oréal Luxe division, the fastest-growing category was fragrance. Estée Lauder Group saw net sales growth in every region and every fragrance brand in the FY2022. Shiseido Group has also achieved 12% growth in fragrance. LVMH's fragrance business is growing strongly, with Dior, Guerlain and Givenchy growing their fragrance ranges.

Secondly, in 2022, the hair care category also showed growth potential that cannot be underestimated. L’Oreal Professional Products division achieved 18.3% growth in 2022 with results-driven mainly by KÉRASTASE. The sales of KÉRASTASE surpassed one-billion-euro mark for the first time last year. In Q2 FY2023 (October-December 2022), when Estée Lauder's results plummeted, its hair care division was the Group's only segment to grow. In Q1 FY2023 (June-September 2022), Estée Lauder also achieved double-digit organic net sales growth in both fragrance and hair care products. In 2022, Unilever also completed the acquisition of Nutrafol, a leading supplier of hair care products, further increasing its presence in the hair care market.

It is worth noting that the pandemic has influenced consumer habits and behaviour and people had increasing concerns about health and safety. It pushed the growth related to skin science.

L'Oréal's Active Cosmetics division, which emphasizes product safety, efficacy and doctor's recommendations, has led the four divisions for two consecutive years with growth rates of over 30% and achieved double-digit growth in all regions in 2022. The division includes LA ROCHE-POSAY, VICHY, CeraVe, Decleor, SkinCeuticals and the newly acquired premium medical skincare brand SkinbetterScience.

At the same time, Beiersdorf, which posted its best results in decades in 2022, also got a taste of the skin science business. In 2022, its Derma division achieved 23.9% organic sales growth where Eucerin and Aquaphor are in, resulting in a strong acceleration of growth in all categories and regions. Vincent Warnery, CEO of Beiersdorf, said that with Eucerin and Aquaphor, Derma segment business has also achieved an important milestone with nominal sales revenues exceeding €1 billion for the first time, three years ahead of its plan.

It is worth mentioning that recently, Myriam Cohen-Welgryn, Global President of L'Oreal Active Cosmetics, said that the former L'Oreal Active Cosmetics was officially renamed L'Oreal Dermatological Beauty. Myriam Cohen-Welgryn said: "Did you know that over 2 billion people have skin issues today? That this number just keeps growing as the world population is aging. Or just because more and more people are exposed to pollution or to stress! In parallel, with the selfes boom and the shift to video calls, the way we look is more important than ever: people increasingly turn to medical professionals to meet their quest for health and beauty. This is why L'Oreal Active Cosmetics has become L’Oreal Dermatological Beauty." This may mean that L'Oréal focused more on skin health care and medical aesthetics.

When will Chinese companies be on the list?

In 2022, we witnessed a downturn in China, which dragged down the results of the major beauty groups. But it represents how significant the Chinese market is to the world's top beauty companies.

Despite the decline in sales in 2022, China has become the largest market for the Shiseido Group. The market share of L’Oreal North Asia, where China is located, was already comparable to that of Europe. As a result, the beauty giants are still bullish on China and are accelerating their localisation in the country.

In 2022, L'Oréal China and Shiseido China set up investment companies such as Shanghai Meicifang Investment Company and Ziyue Fund in China. Their first investments are Chinese fragrance brand DOCUMENTS and recombinant collagen company Trautec respectively, targeting local emerging brands and upstream technology-based companies in China.

In addition to investment, beauty giants are also promoting localisation of their supply chains in China. 2022 saw P&G invest in a live e-commerce innovation centre and a P&G International Trade Supply Chain Control Centre. Unilever's first full-category production and marketing base project in Guangzhou. L'Oreal's first global self-built intelligent operations centre laying the foundation in Suzhou and the 100,000-grade cleanroom at its Suzhou Shangmei factory going into operation. Estée Lauder's China Innovation and Research Centre is officially opened in Shanghai. This series of actions reflect that the beauty giants not only see the consumer potential of the Chinese market, but are also deeply involved in the transformation of the Chinese beauty industry in terms of talent, supply chain and R&D innovation. They are becoming increasingly involved with the Chinese market.

Yesterday (March 14), Shanghai Jahwa, China's leading cosmetics company, released its 2022 results, reporting revenue of 7.1 billion yuan ($1 billion) for the period, down 7.06% year-on-year. Coty, the world's 10th largest beauty company, reported sales of $5.3 billion last year, more than five times that of Shanghai Jahwa.

China's local cosmetic companies still can not reach the top 10 beauty companies. However, China is really important for global beauty companies. The Chinese beauty market, which became the source of innovation for the global beauty industry, are influencing the competition in cosmetic worldwide.

Note 1: The Global Beauty Top 10 sales figures are subject to exchange rate fluctuations and will be in USD as the primary currency for comparison purposes.

Note 2: The data in this article is derived from the financial reports of the companies. L'Oréal, Estée Lauder, Shiseido and Natura & Co are the overall businesses. Unilever and P&G are beauty and personal care businesses. Colgate is the oral, personal and home care products division. Beiersdorf is the consumer business. LVMH is the fragrance and cosmetics business.

Note 3: Estee Lauder, P&G and Coty statistics are based on fiscal years, not natural years. The rest of the companies are based on the natural year.