Beauty markets may not be created equal, but for the Estée Lauder Cos., seizing opportunities means treating them all the same way.
“We treat every market like an emerging market, including the U.S.,” said Stéphane de La Faverie, group president, the Estée Lauder Cos. and global brand president of Estée Lauder and Aerin. “Across the world, the center of gravity has been shifting in politics, in culture and in beauty. We only think of a shift from West to East, but instead of a one-way conversation, there is going to be a two-way dialogue between international global markets.”
Aggressively keeping pace with consumer habits is the key to unlocking growth. De La Faverie noted that consumer spend on beauty in the U.S. is $228 per consumer on average, with South Korea, China, Brazil and India reaching $228, $46, $11 and $1, respectively.
“Imagine what will happen when spending in China becomes half of South Korea, and imagine what happens when India reaches the spending power in China,” he said.
Anticipating consumer needs is paramount, and each market holds learnings that can be applied more broadly in new geographies.
“Knowledge is power, and if we take care of our consumers and get to know them better, we can sell to them better in a new world. That means we need to do a much better job of connecting our consumer knowledge and data,” he said. “In China, we connect brilliantly with our consumer online and offline. This has helped us to deliver unbelievable growth over the last 10 years. We need to fully embrace that strategy in other markets around the world to ensure the balance between the East and the West.”
In Asia particularly, de La Faverie is keen on “getting closer” to the consumer, citing Lauder’s new innovation center in Shanghai, as well as a manufacturing facility being built outside of Tokyo in Japan. “Our strategy has been to connect better with our consumers and be quicker to markets. We are committed to long term investment in Asia and in India, and that means centralizing business development,” he said.
Part of supercharging that growth, though, will take an industrywide effort. “At Estée Lauder, we think about a bigger pie for everyone, not just taking a bigger piece of the pie,” de La Faverie said. “So let’s work together, suppliers, retailers and brands, to connect with our consumers seamlessly, with data and insights.”
He acknowledged the company’s sustainability milestones, such as achieving net zero carbon emissions and sourcing 100 percent renewable electricity. “There is beauty of belonging,” he said. “But we know we have much more to do as an industry altogether.”
While consumer interest in social causes is relatively new, Lauder’s involvement is not. It has funded more than $8 million in breast cancer research, and MAC’s Viva Glam has raised more than $500 million for HIV and AIDS research.
“Beauty is a uniquely personal space, and there’s nothing more personal than what we stand for as an industry.…Our consumers, especially younger ones, expect us to add value, just as they do as individuals. It is a tremendous opportunity for the industry. We like to say that we are beauty-inspired, values-driven,” he said.
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