Estée Lauder to Acquire Parent Company of The Ordinary at $2.2B Valuation

Skincare and cosmetic industries grow their market values despite of the coronavirus pandemic. And now we are witnessing a merger that will change the game.

Estée Lauder agreed to pay $1 billion to boost its stake in Deciem Inc. which operates more than 10 brands, including The Ordinary, in the beauty world. With this recent deal, Estée Lauder will raise its stake in Deciem to 76% from 29% by June 30. In three years, Lauder plans to buy the rest of the company.

According to #Bloomberg, @deciem had sales of $460 million in the year ended Jan. 31, @esteelauder said, describing the company as “an industry disruptor with a consumer-focused approach.”

Photo credit: Deciem

Cosmetics Market Set to Witness Huge Growth

According to Allied Market Research, the global cosmetics market size was valued at $380.2 billion in 2019, and is projected to reach $463.5 billion by 2027.

 

 

  • The skin and sun care products segment constituted a major cosmetics market share in 2019 and now with the coronavirus pandemic and the rise of the awarness about our health, skin care products market is growing.

  • Also from Kylie Jenner to Rihanna, some of the biggest pop culture icons launched their own cosmetic products. Between these brands, Rihanna’s beauty brand #Fenty is ahead. Fenty Beauty buyers spend five times more than the average online cosmetics buyers.

Photo & content credits: Nyane, Allied Market Research, Slice Intelligence, Statista, Brand Finance

Sustainable Cosmetics Are Possible

Personal care and cosmetics industry is one of the top contributor to environmental pollution. Specially, brands using animal testing, chemicals and lots of packaging are polluting our world everyday.

 

 

  • The personal care industry produces about 120 billion packages every year. New generation customers are aware of the seriousness of this matter. According to 2019 Nielsen data, ”73 percent of consumers say they want to reduce their impact on the environment, and 38 percent prefer buying beauty products that are sustainable.”
  • Leading players in the industry are trying to change their strategies in this way. For example by 2025, Unileverplans to make all of its plastic packaging fully reusable, recyclable, or compostable. However this isn’t enough.

 

Smaller brands and entrepreneurs in cosmetic sector focusing on sustainability have much more advantages since they can build up all their systems from scratch in order to be sustainable.

For example, sustainable cosmetic brand Axiology’s founder Ericka Rodriguez, a 33-year-old entrepreneur, animal rights activist and vegan, says,

“We’re a planet-first beauty company, so our main inspiration was to create a zero-waste multiuse crayon that answers the urgent need for sustainability in our industry. Second to that, we want to make clean beauty more accessible to more people.”

As Brandcared, with our consultancy programs, we are helping beauty and cosmetic brands to build up sustainable businesses and to be the change that we want to see in the world.

Photo credits: Medium, @axiology_beauty @unilever @dove