The Strategist

L'Oréal: We expect boom in post-pandemic beauty industry

02/15/2021 - 02:43

The post-pandemic beauty industry will experience the same boom that it did after the Spanish flu in the 1920s, says L'Oréal, a major cosmetics manufacturer. The French company bases its faith in the industry's recovery on its year-end sales, which showed better-than-expected growth.

The world's largest cosmetics manufacturer L'Oréal expects the beauty market to boom after the pandemic, as it did in the 1920s just after the Spanish flu epidemic, the Financial Times reported. "It will be a fiesta of make-up and fragrances. Putting on lipstick will once again be a symbol of coming back to life," chief executive Jean-Paul Agon told at an investor conference on the year's financial results.

The French company, which owns the Maybelline, Garnier and Kiehl's brands, reported better-than-expected sales in the fourth quarter of 2020. Compared to the previous quarter, they rose 4.8% to €7.88bn, with analysts expecting revenue growth of 3%. L'Oréal shares rose 3% on this news and were the blue-chip leader on the French CAC 40 stock index. 

Growth in China and a boom in online sales helped the company mitigate the damage from shop and salon closures in 2020 due to the pandemic. In China, which has become L'Oréal's second-largest market after the US, sales of its cosmetics rose by 27% compared with the same period last year thanks to demand for premium products, especially skincare. E-commerce, including on L'Oréal's own websites and through partner retailers, grew by 62% over the year, and its share of group revenue rose to 25%, up from 15.6% a year earlier. 

The FT notes that the $500bn global beauty industry has emphasised wellbeing and self-care when promoting products in a pandemic year, when people spent more time at home and dressed up less often. As a result, skin masks and lotions also sold well during the period of restrictions, while demand for lipsticks fell due to the need to wear protective masks.