L'Oréal Paris maintains top position as the world's most valuable personal care brand, worth $23.5bn
Mobile-focused millennials create new challenges to the dominance of established personal care brands
The company has retained its leadership position on the back of new products such as Infallible Matte foundation by L’Oréal Paris as well as a new platform, Makeup Designer/Paris (http://www.loreal-paris.co.uk/make-up), and an app Makeup Genius (http://www.loreal-paris.co.uk/make-up/makeup-genius). It has also successfully made the move to digital, with a quarter of marketing spend now on online.
Colgate climbed one position to no.2 with a 2% rise to an $18.3bn valuation, helped by rising market share in both toothpaste and manual toothbrush sales in North America and Latin America.
Despite these successes, however, the established personal care brands face a tough battle to retain their scale with the total value of the Top 15 remaining static in 2016 compared with the previous year.
Three key challenges have emerged to disrupt the status quo: the ability of smaller niche brands to use e-commerce to drive distribution scale, the power of mobile access to give millennials rapid access to new brands, and the shift of traditional female focused brands into the male space.
Although the smaller challenger brands have yet to appear in the Top 15 personal care listing, e-commerce platforms are giving them massive reach, wider distribution and greater appeal than ever before.
Half of the personal care sales on Amazon are from smaller brands and subscription services such as Birchbox and Beauty Box are also using e-commerce as a means to pioneer new forms of personal care.
All brands, whatever their size, have also had to adapt to a more concerned consumer, one who worries about what they put on their skin. A major trend for 2016 has been the move to become much more transparent about the ingredients they use.
“Big legacy brands have a unique opportunity to hit back at younger rivals and retain their relevance for the new consumers coming into the personal care market,” said Doreen Wang, Global Head of BrandZ. “They have the scale and resources to develop easier mobile based purchasing solutions but they need to combine this with greater differentiation, catering to the specific needs of the widest possible range of consumers.”
The BrandZ Top 15 Most Valuable Personal Care Brands 2016
Two success stories from this year’s listing are new entrants Pantene Pro-V at no.11, with a valuation of $3.9bn, and Shiseido, with a valuation of $2.4bn.
Pantene’s recent "Strong is Beautiful" campaign, designed to help girls and women to build their confidence, has been a particularly powerful, while the Japanese company has focused on a premium strategy with products such as Maquillage and Elixir Superieur offering a highly differentiated range that appeals to all consumers.