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French Beauty Sales Boom Abroad, Idle at Home

Exports from France grew 12 percent in 2017 versus 2016.

PARIS — France’s beauty market is showing a split personality at home and abroad.

Domestically last year, spending on beauty and personal-care goods and services was estimated to grow by just 0.3 percent to 29.8 billion euros, according to Mintel. Simultaneously, the prestige business’ revenues declined 1 percent, The NPD Group data shows.

Still, the country remained the world’s largest exporter of beauty products, generating sales of 13.6 billion euros in 2017, representing a 12 percent on-year increase, said the Fédération des Entreprises de la Beauté. Those gains were bolstered by revenues from fragrance and skin care, primarily.

On the storefront, specialist beauty and personal-care retailers are growing their share of the sluggish French market, according to Natalie Macmillan, senior European retail analyst at Mintel, in a recent report titled “Beauty and Personal Care Retailing — France.”

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“Sephora leads by some margin, but Nocibé, now under the Douglas umbrella, is doing well, and Kiko Milano is expanding rapidly,” she said. “With 30 percent of female BPC buyers having shopped online, and 47 percent often researching products online before buying, this channel is an increasingly important part of the buying journey particularly for beauty.”

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More than one-third of BPC sales countrywide are made in supermarkets and hypermarkets, and 28 percent are rung up in beauty specialists, followed closely by pharmacies and parapharmacies, according to Mintel estimates.

“Amazon is not as important as in some other countries but was still shopped by more people than the department stores and fashion retailers,” the market research firm wrote.

Its study showed that the most popular retail brands in France were Yves Rocher, then Sephora in 2017.

Tribe Dynamics, which quantifies the estimated value of publicity gained through digital earned media and their respective engagement levels, in France ranked NYX Professional Makeup first in January, with 111 percent on-year growth to $3.6 million; Too Faced second with 15 percent gains to $3.2 million, and MAC Cosmetics third with a 30 percent rise to $2.4 million.

“We have seen some initiatives of brands and retailers to bring excitement and also appeal to the Millennial generation,” said Leïla Rochet Podvin, founder and chief executive officer of Cosmetics Inspiration & Creation, speaking of the French beauty market overall. “Pop-ups have never been so present.”

Indeed ephemeral beauty boutiques, which have become increasingly experiental, proliferated in the French capital last year. Yves Saint Laurent Beauté hosted a four-day “hotel,” where people were meant to live the brand and no products were sold, for instance.

Christian Louboutin staged a pop-up nail bar in the Mandarin Oriental hotel, and Nuxe planted its first ephemeral shop on Rue Montorgueil.

Rochet Podvin also noted an uptick of new collaborations, such as the L’Occitane-Pierre Hermé concept store, 86 Champs, on the Avenue des Champs-Élysées, and the Healthy Truck being run this month by Groupe Clarins in association with chef Christophe Michalak.

86 Champs
86 Champs Courtesy Photo

“Retailers are opening Millennial sections, such as #Beautysta by Printemps, and [brands like] Dior with Capture Youth or Shiseido with Waso,” she continued.

“What we also have seen is the traditional geographic frontiers are disappearing,” Rochet Povdin said. “With the rise of e-retail, consumers are buying more online, and younger consumers are buying indie brands directly from abroad — the U.S., Australia and K-beauty. The competitive environment is getting global, and consumers love beauty-hunting more than ever. To stay attractive, brands need to bring excitement to be desired.”

“As far as product trends, Korean beauty and the U.S. are the real innovators,” said Nancy Flavin, an industry consultant. “Masks are one of the dominant and ongoing trends these last few years. The tool trend — Clarisonic, Dyson blow dryers, etcetera — seems to have pretty much died, but whatever steam is left in tools has been copied and rolled out by the mass brands.”

So what are some of the main hurdles facing the French beauty industry on its home turf these days?

“The biggest challenge is to adapt themselves to the changes of our society, of the new consumers’ shopping journey and the adaption to the Millennial generation,” Rochet Podvin said. “Millennials are the ‘beauty native’ generation. They are looking for excitement — from retail and products — real performance and value.

“Consumers are also increasingly interested in more traceability, ethics and are searching for clean alternatives, in food and beauty,” she continued. It’s all interconnected with the wellness trend.

The prestige category, meanwhile, needs to polish up its luster after 2017, when sales of skin care and fragrance declined 1 percent each and makeup by 2 percent, according to NPD.

There is the “ongoing, never-ending” price war among the beauty chains, Flavin said. “Today, consumers are trained to buy only when a product is discounted,” she explained. “That’s a big problem, just like when in the U.S. consumers would only buy when there was a gift with purchase — and then it became a product with purchase.”

She also finds a serious lack of innovation, dynamism and energy in the French beauty industry, whose je ne sais quoi retains strong cachet abroad. Its sales to countries in the European Union last year gained 6.2 percent, driven by Germany, the U.K., Italy and Spain, according to the FEBEA.

Exports to Asia — which made up 20 percent of all French beauty revenues abroad, or more than 2.6 billion euros’ worth — advanced 25 percent, while there was a 30 percent-plus uptick to China and to Singapore. (That annual turnout compared to a 9 percent rise in sales to Asia in 2016 and no growth registered there in 2015, the federation said.)

“Looking forward we expect the competition from other channels, such as the fashion specialists and online-only retailers like Amazon and Zalando to increase,” the Mintel report outlined. “The department stores look to be fighting back, and the grocers may look to cosmetics and makeup to help bolster their declining non-food sales. With online, the key challenge is to find the right mix of digital integration, merging shopping online with the more experiential side of shopping in-store.”