Brand Story: Top news on the biggest names in beauty

1 – Shiseido’s supply chain struggle: CEO estimates product shortages led to $450m sales loss​

Shiseido president and CEO Masahiko Uotani has revealed the firm lost around ¥40bn ($363m) to ¥50bn ($450m) in sales due to product shortages.​

This was blamed on a combination of strong and natural disasters.

“I assume that there was around ¥20bn ($181m) impact in profits, so we would like to make a recovery as quickly as possible,”​ said Uotani.

Solving the company’s supply chain issues is a priority for Shiseido, he added.

“I want to avoid a situation where future management say that products cannot be offered to consumers because of insufficient production capacity. That is why we want to make enough progress now.”​

2 – Beauty games: M.A.C. lipstick collaboration with Tencent mobile game sells out in 24 hours​

M.A.C. Cosmetics launched a collection inspired by Chinese firm Tencent’s popular mobile game “Honor of Kings”, which secured 14,000 pre-orders and sold out across all channels within 24 hours of the launch.​

The collection comprised of five lipsticks based on five heroines from the game and was available on Tmall, M.A.C.’s online store, and a WeChat mini program.

In an interview with Chinese website LadyMax, M.A.C China noted that the game’s 200 million monthly players inspired the idea for the collaboration.

M.A.C. China marketing director Weng Yanling mentioned that players would associate the characters with some of M.A.C.’s iconic lipstick shades.

3 – AmorePacific performance suffers from weak domestic demand​

AmorePacific Group’s said its performance in 2018 suffered because of weak domestic demand, fierce competition and increased labour costs.​

The South Korean beauty conglomerate saw revenue increase by 3% while operating profit fell by 19.2%, failing to meet its 2018 goals of 10% revenue growth and 24% operating profit growth.

AmorePacific’s brands failed to impress the local market. The company’s operating profit fell 32% to ₩283.7bn due to increased expenses such as personnel costs, while domestic sales remained stagnant at ₩3347.2bn.

The company’s portfolio suffered locally mostly due to its premium beauty range, which consists of Laniege, Iope and Mamonde. The overall sales declined 11.3% due to the withdrawal of IOPE's home shopping channels, said the firm.

4 – AmorePacific signs deal with A.S. Watson to distribute premium beauty brands​

AmorePacific Group is entering into a global strategic partnership with retailer A.S. Watson Group to accelerate new market expansion​ for its premium brands.

The Korean cosmetics manufacture said the partnership would allow it to strengthen its business portfolio and introduce its premium beauty brands, such as Laneige and Mamonde, into new markets.

“[AmorePacific and A.S. Watson] are both passionate and committed to combining our knowledge and capabilities to bring the best products and shopping experience to our customers,”​ said Malina Ngai, Group Chief Operating Officer of A.S. Watson Group.

As sales at Korean brick-and-mortar stores continue to slump, AmorePacific has been actively strengthening its position in the market by expanding into multi-brand shops like Watsons, Sephora and Eveandboy.

5 – Estée Lauder sales soar past $1bn in Asia as China spends big on beauty​

The Estée Lauder Companies announced that beauty sales in Asia-Pacific grew by 20%,​ offsetting a North American sales tumble.

Along with growth in online, travel retail and skin care sales, the Asia-Pacific jump propelled the cosmetics company to a quarterly net sales high of $4.01bn, executives announced on the company’s earnings call.

The company achieved this milestone despite global trade tensions and “softness” in the US and UK, its largest markets.

“We delivered an excellent performance in our fiscal second quarter. Importantly, this was our eighth consecutive quarter of impressive net sales growth that met or exceeded our long-term goal, all while navigating many global macro issues,”​ said Fabrizio Freda, President and CEO of Estée Lauder Co.

Freda added: “Our sustained progress is the result of our multiple engines of growth strategy, and demonstrates our agility in moving resources to the best global opportunities.”​