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08/21/2019 Unmasking The Hidden Billionaire Behind A Korean Beauty Kingdom

iu Jing, 32, is visiting Seoul from China’s eastern seaboard. Other tourists might spend their day taking in the capital’s sights. Not Liu. She’s lining up behind at least a dozen compatriots in a duty-free shop, waiting her turn to buy JM Solution facial sheet masks. Each box of ten will cost her about $30, but Liu won’t walk away with just one. For the equivalent of $18,000, she and the others buy three refrigerator-size palettes of carts – so big they have to be wheeled away on dollies.

This is the latest article is in a new series: World of Forbes, a collection of stories from our 35 licensed editions and global partners around the planet. This story originally appeared in the July-August issue of Forbes Asia.

Liu isn’t buying them for herself. She’s a daigou – a Chinese term for surrogate buyers who venture abroad to stock up on popular products and resell them back home. To say JM Solution masks are popular is an understatement. Between the Honey Luminous Royal Propolis Mask, the Lacto Saccharomyces Golden Rice Mask, and the Active Pink Snail Brightening Mask, JM Solution’s owner, GP Club, has sold more than a billion skin-care masks, mostly in China, since launching them in mid-2017. “It’s the No. 1 seller in China,” Liu says, adding that she can earn as much as 20% selling JM masks back home in Shandong province. “I’ve been coming here once a month for the past six months.”

Daigous like Liu are partly responsible for catapulting Kim Jung-woong, GP Club’s founder and CEO, onto Forbes’ list of Korea’s 50 Richest at No. 30 with an estimated net worth of $1.15 billion. Kim, now 44, started his own video game store in high school and within a decade had earned enough to venture into China’s gaming accessories market. A decade after that he pivoted to cosmetics in the mainland. But after a diplomatic dust-up that began in 2016 sparked a boycott in China of Korean products, Kim cultivated a following among the mainland’s social media influencers, triggering an invasion of daigous determined to bypass the boycott and ship GP Club’s masks from Korea to sell back in China themselves.

The daigous not only blunted the boycott’s impact, but also helped GP Club grab market share from big-name Korean brands such as Amorepacific and LG Household & Health Care. Driven largely by demand from China’s consumers, sales at GP Club rose nearly tenfold last year to 514 billion won ($460 million), while net profit rose more than 30 times, to 170 billion won. “I rode the wave well,” Kim says in his first major interview since becoming a billionaire. To cope with the growth, he quintupled his staff to 170 last year. “But if you asked me to do it again, I probably couldn’t,” he says.

GP’s staggering expansion prompted Goldman Sachs last October to pay 75 billion won for a 5% stake in the company, making Kim, who with his wife and daughter owns roughly 95% of the company, a billionaire. Confident it can sustain the momentum, GP says it has mandated banks to arrange an IPO in Seoul, which could take place later this year. “While the incredible growth in sales of JM Solution’s innovative products caught our initial attention,” says Jonathan Vanica, a managing director at Goldman Sachs who led its investment in GP, “it was the company’s deep understanding of the Chinese consumer’s ever-evolving, internet-driven tastes and their firsthand knowledge of online and offline nationwide distribution channels that truly excited us.”

Kim’s road to China’s $15 billion a year facial mask market was long and winding. The youngest of three siblings, Kim had a comfortable childhood until his father, a well-to-do bank branch manager, lost his job and the family’s money in a failed foray into politics. Kim’s father traded his white-collar shirts for a construction laborer’s helmet. They were hard times, Kim recalls. Rice was a luxury; the family ate barley instead.

When Kim was 15, his father died of liver cancer, leaving his mother and grandmother to raise him, his brother and sister. Hardship ignited his entrepreneurial flame. “Early on, I felt driven by the need to make money,” he says. An avid gamer like so many teenagers, Kim landed a part-time job at a small video game store run by an elderly couple. Kim’s fascination with games quickly translated into a talent for selling them. With $4,000 he saved from his job and $3,000 borrowed from his family, Kim opened his own small store selling video games and consoles from an apartment and called it Game Paradise, the origin of today’s GP Club.

Kim would open shop after school and sell video games until 11 p.m., fashioning homemade loyalty cards – “Buy 10, get one free” – to encourage repeat business. When he’d made enough money, he used it to open a second store in another apartment nearby. By the time he was 20, Kim had amassed a small fortune of 300 million won (equivalent to about $500,000 today).

After a four-year interlude – two years performing Korea’s compulsory military service and another two earning a degree in interior design from a vocational college – Kim started plowing his savings back into expansion. He opened a new branch of his store in an electronics mall and eventually added five more there.

Video games weren’t the only thing moving out of GP, though. Kim noticed that customers were also keen on nylon and polyester shoulder bags to protect their precious PlayStation and Nintendo gaming consoles. So in 2003, Kim made the first of what would be many trips to China, where the carriers were made, to secure a network of suppliers. GP’s game and accessories business grew to generate, at its peak, as much as 50 billion won in annual sales.

Kim picked up more than bags in China. He learned Chinese and, he says, “a lot about the Chinese culture and the habits of people.” Kim was quick to spot the resurgent popularity of Korean pop culture in China, part of a second K-Pop wave like the one that swept Asia in the 1990s, but now supercharged by the rise of social media.

With the new craze for Korean bands and TV dramas came a yearning to emulate the fair and dewy skin of their stars: the K-Beauty trend. Korea’s biggest beauty brands had been exporting to China for years; now even smaller brands could sell to Chinese consumers online or to the rapidly rising number of Chinese visiting Korea. The second wave gave Kim the chance to make use of his China connections, and in 2013 GP became the distributor for Korean brands still trying to ride the K-Beauty wave into China’s market.

“It did incredibly well – at first,” Kim recalls. But his role as middleman was precarious: As his Korean clients’ sales soared, they began cutting him out and selling directly to China’s retailers. Turning to a small Korean cosmetics factory in April 2016, Kim launched his own brand of body washes and lotions, JM Solution, which stands for “Journey to Miracle.”

JM’s first product line was gaining popularity, but its rise was cut short when, in the summer of 2016, Korea agreed to deploy the U.S. THAAD anti-missile system on its turf, designed to protect it from North Korean missiles. Beijing, worried the system’s radar could penetrate Chinese territory, interpreted the development as a national security threat and retaliated swiftly by banning Chinese group tours to Korea. “Before the crisis, 800,000 Chinese were coming to South Korea every month,” says Park Hyun-jin, an analyst at the DB Financial Investment brokerage in Seoul. “It fell to about a quarter of that.”

State media also urged China’s consumers to boycott Korean products. Sales at Korea’s largest cosmetics firm, Amorepacific, dropped by more than 9% during the two-year boycott. Its net income tumbled by more than half. “The appetite for K-Beauty was big,” says Lee Sun-hwa, an analyst with Eugene Investments and Securities in Seoul. “But with the tourism ban, there were fewer channels for Chinese consumers to purchase these products directly.”

GP wasn’t spared. “I lost a billion won I couldn’t get back from one retail partner. We had orders of three billion won being cancelled,” Kim says. “People were literally telling me, ‘Stop producing.’” He didn’t. Instead, Kim invested all his money at the time – 1.5 billion won – into a new product: facial sheet masks. Unlike traditional facial masks that are brushed on as a paste and then allowed to dry before being peeled or washed off, facial sheet masks are tissue-thin sheets cut to fit the face – with holes for the eyes and mouth – and coated with chemicals designed to moisturize and rejuvenate the skin. China’s consumers buy $15 billion in these masks every year, according to Bain & Co.

In mid-2017, GP launched JM Solution’s Honey Luminous Royal Propolis Mask. Other masks soon followed, including the Active Bird’s Nest Moisture Mask, the Active Jellyfish Vital Mask and, of course, the Active Pink Snail Brightening Mask (containing real snail extract), just to name a few. GP didn’t advertise. Instead, it sent masks to China’s top beauty influencers, who would in turn post reviews – for free – on Sina Weibo (China’s equivalent of Twitter) or on TikTok, the short-video platform operated by Bytedance.

Some influencers began buying masks in bulk and reselling them online. But it was the daigous who arguably made a significant difference. Daigous aren’t limited to GP’s masks or to Korea, but the THAAD boycott and the popularity of GP’s influencers in China spawned a lucrative gray market for the daigous to exploit, buying masks in bulk in Korea and selling them to buyers at home who put complexion ahead of patriotism.

GP’s allure to the daigous was also fed to some extent by its own competitor: Amorepacific limited how much of its products any single customer could buy. A spokesperson for Amorepacific says the company was more concerned with protecting and promoting its long-term brand image than with boosting short-term sales.

GP had virtually no limits. By the end of 2018, GP had sold 800 million masks, a number that has now surpassed a billion. “Tourism was declining,” says Eugene analyst Lee. “But sales of JM products at duty-free stores were rising. It was people who were selling them, not consuming them.” Today, GP, the company that started out selling video games and accessories, counts on cosmetics – largely to China – for 90% of its sales, half of which now come from e-commerce platforms such as Alibaba’s Tmall. Games and related accessories account for just 6%.

GP Club’s China-powered rise was so meteoric that analysts initially projected the company could be valued as high as 10 trillion won in an IPO. They’ve since brought that estimate Earthward – current projections are for a valuation of roughly 4 trillion won. “The 2018 financials, while impressive, were still less than what we thought they’d be,” Lee says.

“JM Solution products have had a meteoric rise for sure, but GP Club, even when dealing solely with video games, was clearly successful,” says Jane Han, GP’s general sales director and its first cosmetics hire, in 2014. “What has not changed is our CEO’s passion and sincerity for what he does and his meticulous focus on fully understanding all the details involved in bringing a product to market and selling it. That is one of his greatest strengths.”

As proof that it is no longer an upstart in China, GP now must grapple with the bane of so many brands there: counterfeiting. “Fake products are already in the Chinese market,” says Florence Bernardin of Information & Inspiration, a research firm specializing in the Asian cosmetics market. Fake cosmetics not only undercut sales; sometimes tainted with dangerous chemicals, they can hurt unwitting consumers and spark a backlash against the genuine brand. China’s social media is rife with complaints about counterfeit Korean cosmetics. GP says it’s working to foil counterfeiters by monitoring online and offline sales channels, updating its packaging and working closely with its online partners such as Alibaba.

Vigilance may curb copycats, but continued growth, analysts say, will depend largely on diversification into new products and markets. GP has expanded offices from Seoul into Guangzhou, Hangzhou, Hong Kong, Tokyo and Weihai in China’s Shandong province. Roughly a quarter of its 170 employees are focused on R&D, it says, and it’s now selling its cosmetics not only in China but also in Japan, Malaysia, Singapore, Thailand and back home in South Korea. “The next big market for cosmetic firms appears to be Southeast Asia,” says Shinyoung Securities analyst Shin Su-yeon in Seoul. “K-Beauty is popular in the region. But it’s a difficult market, fragmented between several countries.”

Kim hopes an IPO will give GP the cash it needs to bridge those divides. When all is said and done, though, success is a relative matter for Kim, who feels his father died prematurely: “My dream is to be able to spend the better part of my life comfortably with my family.” – With additional reporting by Yue Wang

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08/19/2019 Fortunes Of Five Lauder Family Members Rise A Combined $3.1 Billion Following Strong Estee Lauder Earnings Report

Annabelle Woodward is a rising senior at Brown University, where she serves as the Arts and Culture editor for The Brown Daily Herald. She has previously written for The Shelter Island Reporter and The Suffolk Times.

Five members of the family behind global beauty behemoth Estee Lauder Companies are a combined $3.1 billion richer since Friday after the stock jumped more than 12% Monday following strong earnings for the fourth quarter and the company’s fiscal 2019. Leonard, Ron, Aerin, Jane and William Lauder – all billionaires – - are the children or grandchildren of founder Estee Lauder, who launched the company with her husband Joseph in 1946. Leonard Lauder’s net worth rose by $1.8 billion on Monday, making him the second biggest gainer of the day, behind luxury goods baron Bernard Arnault, who was up $2.2 billion.

It’s been a banner year so far for Estee Lauder stock, which has risen by 55%. The five billionaire Lauders are together worth an estimated $32.4 billion, up 24% since early March, when Forbes’ 2019 World Billionaires list was published.

The New York-based cosmetics company behind brands like MAC Cosmetics and Bobbi Brown reported that net earnings rose to $1.79 billion in the year through June 30, 2019, up a whopping 61% from $1.11 billion the previous year. Net sales climbed 9% to nearly $14.9 billion, and diluted net earnings per common share increased to $4.82 compared with the $2.95 reported in fiscal 2018.

Fabrizio Freda, Estee Lauder’s President and CEO, attributed the company’s eye-popping gains to improved data analytics, which helped drive better digital marketing.

All five Lauder family members are either board members or executives at the company and help oversee its more than 25 brands. William, 59, is the chairman of the company; he served as CEO from 2004 to 2009. Aerin, 49, the eldest daughter of Ronald and the style and image director at Estee Lauder, founded her own luxury lifestyle brand, AERIN Cosmetics, in 2012. Now a mainstay under the Estee Lauder umbrella, AERIN offers everything from “rose lip conditioner” to light fixtures and is sold in 40 countries.

Estee Lauder CEO Freda expressed optimism about the company’s capacity to perform in fiscal 2020, stressing that he plans to continue investing in emerging markets beyond China. Estee Lauder is already doing business in over 150 countries and territories.

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08/19/2019 Revlon's Cautionary Tale: The Changing Nature Of Influencer Marketing

Cosmetic giant Revlon is exploring the sale of all or some of its business amid lackluster sales and a crushing debt of $3 billion. The iconic company’s 2016 acquisition of brand Elizabeth Arden apparently isn’t rescuing it from the Sephoras and direct-to-consumer businesses (DTCs) of the world. Revlon’s tale is cautionary for leaders in all industries: Don’t rest on your laurels (or, in this case, your lashes).

A Pioneer In Influencer Marketing

An R&D innovator that saw its first successes with revamped nail polish formulas, Revlon also revolutionized cosmetic marketing when it hired famed Richard Avedon to photograph first brand ambassador Lauren Hutton in 1973. In the ’80s, Revlon then pioneered a new era of influencer by stoking the phenomenon of the “supermodel,” making the mass-adored faces of Iman and Cindy Crawford inseparable from the Revlon brand. These instantly recognizable supermodels had their aura only enhanced by Revlon’s incredibly sized contracts. Revlon mastered riding the culturally relevant for its own marketing purposes.

A New Era Of Influencer Marketing Takes Revlon By Surprise

That MO worked for years, making it ironic that the company was slow to recognize and adapt to the next influencer era – one defined by self-made experts who build followings (and brand relationships) on social foundations. This era made Kylie Jenner a billionaire in three years. Revlon trialed influencer campaigns relatively recently. Late to the game means late to insights and optimizations. And Revlon’s size and complexity certainly don’t help it adapt quickly to what it’s hearing from fans and influencers the way DTC cult brand Glossier does when it pivots product and packaging based on community feedback. The influencer game changed, but Revlon did not change with it fast enough.

Change Continues, Making Adaptability And Agility Keys To Success

Even as you read this, influencer marketing is changing again. Our latest researchshows that leading brands are skipping big-reach influencers for those with smaller followings but more authenticity. Some even have no followers. Some are not even human, like Lil Miquela. Brands use influencer marketing systems to find, vet, contract, use, amplify, and monitor pools of influencers for marketing purposes across the whole customer lifecycle.

Revlon’s situation is complex, and the company’s slower adoption of modern influencer marketing tactics is likely one of many challenges contributing to its current struggles. But its influencer strategy signals a failure to keep pace with consumers, to recognize new trends, to change existing processes.

The lesson learned: While remaining unchanged works for Cindy Crawford, it does not for business – adaptability and agility do.

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08/19/2019 Estee Lauder: blemish free

The US bond market may have started to exhibit age spots. Global economic growth looks tired. But try telling that to Asia’s legion of skincare devotees.

The region’s seemingly insatiable demand for pricey toners, face masks and creams has plumped up Estee Lauder’s latest results. The 9 per cent rise in sales and an adjusted profit gain of 5 per cent in the fourth quarter both topped expectations. Guidance for the current fiscal year was also well above consensus. Full-year operating margins climbed for the fourth year running to a record 17.6 per cent.

Cosmetics can be a recession-proof business. While consumers may put off big-ticket purchases during a downturn, they will still treat themselves to a $25 lipstick, or even $350 face creams. The rise of social media is likely to reinforce this trend. The proliferation of YouTube tutorials has made using make-up more accessible.

But not all beauty companies are created equal. While Estée Lauder and French rival L’Oréal have the financial muscle to develop new products, build digital strategies and fund acquisitions, others have struggled. Revlon, a mass-market staple, is putting itself up for sale. Coty has taken a near $4bn writedown so far this year on its $12.5bn acquisition of Procter & Gamble’s beauty brands from three years ago.

Estee Lauder benefits from having a diversified product portfolio and a balanced geographical exposure. This has not gone unnoticed. The stock jumped more than 9 per cent on Monday to a new record high, extending year-to-date gain to more than 50 per cent.

At 31 times forward earnings, Estee Lauder shares look expensive. The wider S&P consumer staples index is trading at around 20 times. A bet on Estee Lauder now is a bet that the growth momentum can continue. Estee Lauder said its forecast has already factored in risks from Brexit, trade tensions and the Hong Kong protests. This, plus a record of providing conservative outlooks, suggest its shares can retain their sheen.

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08/19/2019 Investing In Beauty And Personal Care

Founder and CEO of BlackCrown Inc., the independent sponsor firm targeting value buyouts in select industries.

Independent beauty brands have taken the market by storm. Armed with greater awareness of what “goes into” their daily beauty products, people now gravitate toward brands with premium product features and have a genuine thirst for brand exploration (getting to know the authenticity) primarily because smartphones have transformed customers into independent-thinking consumers.

How do investors and brands navigate this information age? How do consumer brands stay meaningful in an era where information consumption is highly fragmented and brand equity can be watered down through the smartphone and social media experience?

Back To The Future

Proctor and Gamble (P&G) paid $1.2 billion for Richardson-Vicks Inc. (RVI) in October 1985. In that era, RVI encompassed various brands, including Vicks and NyQuil, but also personal care products such as Oil of Olay, Clearasil, Pantene and Vidal Sassoon. This acquisition gave P&G the necessary assets to enter the beauty market and become a mass-market provider of beauty brands. A critical takeaway here is how everyday consumers benefited from having mass-market access to quality brands and seemingly key beauty products. During this era, consumers were just discovering personal choice, understanding personal beauty and receiving brand messaging from a single voice (their local retailer). There was no way for individuals to discover their own facts and build their own analysis. P&G and other conglomerate brands truly dominated this consumer era.

P&G changed our lives and disrupted the world with their two-in-one shampoo technology; today we likely take this convenience for granted. The first brand to receive this disruptive technology was Pert Plus. At the time, Pert was a weak brand, but P&G revitalized that brand equity (with Pert Plus), which consequently inspired the firm to re-innovate Pantene.

Pantene was inherited from the RVI acquisition; enhancing the brand with 2-in-1 capabilities helped P&G really understand how to sell beauty and wellness. In 1992 P&G introduced Pantene Pro-V, which quickly became one of the fastest-selling hair care products and repositioned the asset as a true personal care product.

P&G understood that innovations at scale compounded with brand equity yielded tremendous returns. Consumers directly benefited from these disruptive innovations in beauty and personal care; P&G understood the customer and crafted new end-user experiences. Still, up to this era, the point of purchase and information awareness largely remained with mass retailers, an exclusive in-store experience. While Motorola was the first company to produce a mobile handheld device in 1973, dial-up internet wasn’t commercialized until 1992. Brands were still entrenched in telling the customer what to do.

Getting To Today: Beauty And Brands

The internet has largely democratized the information of beauty and wellness to create the independent consumer. Beauty hasn’t changed. Rather, the medium of interactions has been liberated from in-store experiences. Historically, established consumer brands were largely limited to specific advertising mediums (think radio and television). Awareness of product benefits and consumer insights was narrow and truly limited; consumers weren’t really given the platform for independent thinking.

Today, mobile devices are the status quo and the points of sale. The “store” is in our pockets, and according to a recent report by the World Advertising Research Center (paywall), it’s estimated that nearly three-quarters of the world will access the internet via smartphones by 2025. Since the internet era, have legacy brands innovated customer experience? Have they wholly adapted their product innovations and premium features toward the modern habits of consumers in the 21 century? No. Brands must move away from retail mindsets established in the late 1800s to compete at various points of sale experiences (digital to physical).

Established brands have had muted success in adapting to the modern era. In order to innovate and stay relevant, established brands pay for independent brands, often at substantial premiums: L’Occitane acquired Elemis for $900 million. Clorox acquired Nutranext for $700 million. L’Oreal acquired IT Cosmetics for $1.2 billion. And Estee Lauder acquired Too Faced for $1.45 billion

These decisions and strategic moves admit defeat for organic growth and organic strategies. Unfortunately, bringing in external brands, in the long run, might hold higher odds of failure because internal management systems never had the ability to “get it right” in the first place. This may be too critical, but it is a candid assessment regarding brand integration risks and “buying to be relevant” plays.

Welcoming The ‘Indie-Mass’ Market

P&G acquired Noxell in 1989 for $1.3 billion and then, in 1991, acquired Max Factor for $1.14 billion. Respectively, both of these acquisitions created much of present-day Coty. I believe P&G’s decision to exit the entire mass market of beauty confirms that the midmarket beauty market is now the “independent beauty brand.” Personally, I think this channel should be called the “indie-mass” market. I define indie-mass as the new midmarket beauty category where seemingly independent brands are perceived as premium, authentic, personalized and available through mass appeal.

For Coty, I believe they’ve recognized this indie-mass market by writing down $3 billion worth of assets they acquired from P&G and their recent announcement to invest in Kylie Cosmetics. Looking at historical trends, the deal likely undervalues the contribution that Kylie Cosmetics would bring to Coty. However, I think that Kylie Cosmetics may be worth closer to $3 billion – Kylie Cosmetics has much more runway and brand equity. For brands like Kylie Cosmetics, there are better ways to build value with Coty that likely go unexplored.

Key Questions For Investors And Private Equity Firms

When it comes down to it, how can investors and private equity owners analyze these midmarket brands? How far can these brands go, and what are the support systems in place to get them there? Here are some questions to determine if a brand stands up to the test:

  1. How is the brand managing digital to physical?

  2. How elastic is the brand? Can it deliver value through various products and demographics?

  3. Has the beauty and wellness brand kept up with the customers’ purchasing and self-discovery behaviors?

Overall, investors and private equity firms ought to consider a total strategy when truly assessing consumer brands.

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08/19/2019 ESTEE LAUDER dévoile des perspectives de toute beauté pour son exercice en cours

(AOF) - Estée Lauder a publié lundi des résultats supérieurs aux attentes au titre de son quatrième trimestre fiscal 2019 (clos fin juin) et dévoilé des perspectives enthousiasmantes pour l’ensemble de son exercice en cours. Ainsi, le spécialiste américain des produits pour la peau et des cosmétiques a publié un bénéfice net de 157 millions de dollars au quatrième trimestre, ou 43 cents par action, contre un bénéfice net de 186 millions de dollars, ou 43 cents par action, un an plus tôt. En données ajustées, le bénéfice par action ressort à 64 cents, dépassant le consensus FactSet (53 cents).

Pour sa part, le chiffre d’affaires d’Estée Lauder s’est établi à 3,59 milliards de dollars au quatrième trimestre, en hausse de 9% sur un an. Cette performance est également au-dessus des prévisions moyennes du marché (3,53 milliards).

Estée Lauder a aussi réjoui les investisseurs du côté de ses perspectives. Pour son premier trimestre fiscal 2020, le groupe vise une croissance de ses ventes de 9 à 10% (consensus : +6,5%). Enfin, pour l’ensemble de son exercice fiscal 2020, la société table sur une croissance de ses ventes de 7 à 8% (consensus : +6,4%).

Les spécialistes du secteur sont très confiants en constatant la très forte demande de la clientèle chinoise. Morgan Stanley estime que le marché chinois, qui a procuré à l’industrie du luxe 60% de sa croissance sur les quinze dernières années, devrait augmenter ses dépenses de 90% d’ici à 2025. Même optimisme du côté du cabinet de conseil Bain & Company. Parmi les facteurs de croissance se trouvent l’expansion rapide de la classe moyenne, qui devrait représenter les deux tiers des ménages chinois d’ici 2027 et la demande toujours soutenue des Millennials, particulièrement sensibles aux tendances innovantes telles que la convergence de la mode et du sport.

Une étude du Boston Consulting Group estime que, d’ici à 2024, les consommateurs chinois représenteront 40% des clients du luxe. Leur contribution à la croissance de ce marché est estimée à 70% pour les cinq prochaines années.

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08/19/2019 Five Tips For Collaborating With Other Brands

Award-winning esthetician and Founder of StackedSkincare, a high-performance skincare line of pro-grade serums, peels, and tools.

They say business is a dog-eat-dog world, but in actuality, there are endless opportunities to collaborate and cooperate with other brands in order to diversify your audience and reach new customers. Here are a few tips for negotiating and executing successful partnerships with other brands in your industry and beyond.

  1. Don’t Compete With Yourself – Unless It’s Worth It

When it comes to selecting brand partners, your instincts will probably tell you to look outside your industry so you aren’t in direct competition with your collaborator. While that instinct is a good one, it can prevent you from thinking creatively about how to structure partnerships. Working with brands inside your industry can mean reaching an audience that’s already primed to engage with your brand.

It might be worth working with a brand in your industry as long as your product assortments complement rather than compete with one another. A good example for my skincare brand would be partnering with a brand that specializes in color cosmetics like foundation, blush, etc. While we both occupy the beauty space, our products don’t overlap, and both of our audiences are interested in the other brand’s products.

Retailers make some of the best brand collaborators because they are already invested in your success. Before you approach your retailer about a collaboration, consider what you’re willing to offer them. Some of the best offers you can pitch are exclusive product launches, exclusive packaging or a special sale price – all things that give them an edge over their competitors. In exchange, you should ask for a dedicated promotional strategy around the launch: placements in emails, social media or in-store features. The sweeter the exclusive, the more you can ask for in return. Be prepared to negotiate terms like the dates of exclusivity, which will help you bargain for more promotion.

  1. Consider This: What Else Is Your Customer Buying?

Unless you’re partnering with a retailer, the end goal of most collaborations is to gain new customers, so pick a partner whose customers are lookalikes of yours. Think big about your customers: What else are they buying other than your products? Do they have lots of disposable income, or are they on a budget? If they’re interested in your products, what other industries do you think they’re interested in? If you’re stuck, look at lifestyle trends related to your category. For example, if you’re selling beauty products, you can probably infer that your customers are also interested in wellness. A huge part of wellness revolves around fitness. Consider partnering with an athleisure apparel company; people buying expensive athleisure apparel are likely to also purchase luxury skincare. There’s a lot of potential in collaborations. It’s only limited to your imagination, your marketing prowess and your ability to execute.

  1. Build Social Currency With Giveaways

Co-branded social media giveaways are one of the most ubiquitous and approachable ways to dip your toe into collaborations. While they don’t always convert to sales, they are a strong tool for raising brand awareness. Giveaways are a great way to gain followers and email sign-ups, but they can also increase your social currency if you choose the right partners. Look for brands that are getting lots of PR buzz, have impressive social media engagement or are otherwise making waves in their industry. By positioning yourself with these brands, you gain from their success, and their brand advocates might even become your brand advocates. Instagram is still the best way to get in touch with other brands, so don’t be afraid to send a DM to get the conversation started.

  1. What To Avoid
  • Gift Bags: Gift bags are a waste of product and money. You’ll probably never see a sale as a result.

  • Email Swapping: Avoid any collaborators that claim they’ll share their email list with you. It’s illegal. The only legal way to get email sign-ups is through customer opt-in.

  • Working Without a Contract: If there’s money involved or you’re giving a retailer exclusivity, you need a contract. If you’re just contributing product for a giveaway or social campaign, you can choose to take the risk and do it on a handshake.

When it comes to collaborating with other brands, allow yourself to think creatively. Many times, collaborations are a great way to build your brand without shelling out a lot of money or product. Think about your goals, and initiate the partnerships that can make them happen.

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08/18/2019 Why Email And Cash Are Dead In China

Over the last decade, China’s tech sector has progressed from copying ideas from Silicon Valley to creating their own apps and sites tuned to the Chinese culture – fast, efficient, convenient, social, more transactional, and with an appeal in rural areas.

The scale and speed of China’s digital universe is unbeatable. Cut-throat competition keeps Chinese tech titans vying for top positions in a constant-churning market. China’s young, digitally savvy population takes to new apps quickly in a super-charged, highly competitive marketplace. China has the world’s largest number of mobile phone, payment and e-commerce users, with many innovative apps that serve consumer lifestyles such as superapp Meituan with its all-in-one multi-functions, and messaging and payments app WeChat,

Email and cash are dead in China, as I write in my new book: Tech Titans of China. It helped that China skipped right over the PC era and went straight to mobile.

The Chinese digital universe is decidedly more social too than in the West. The social commerce marketplace originated in China, and has been popularized there. Chinese shopping site Xiaohongshu, which translates as Little Red Book but no relation to Chairman Mao’s quotations book, blends online shopping with social media and key influencers. The Shanghai-based cosmetics and fashion shopping app lets regular customers and key opinion leaders post reviews and share shopping experiences, hobbies and lifestyles. It’s reached 200 million users and 3 billion views of posts daily, numbers that would be a stretch in the West.

China has already proven that it can innovate and work harder. The next step is to extend its reach into new territories. Already, China’s tech titans are moving into India and Southeast Asia, taking their business models beyond the Great Wall (that Facebook, Google, YouTube and Twitter can’t penetrate) and snapping up the most promising technology startups.

For instance, Alibaba has invested in several major e-commerce and only payment startups in Southeast Asia and India: Tokopedia in Indonesia, Lazada in Singapore and region-wide, Daraz in Pakistan, Paytm in India. In turn, Chinese tech titan Tencent has ride-hailing, digital content, music streaming and online fashion sites in the region.

China’s tech titans are moving more swiftly than comparable US giants that are investing in this Asia-wide region that promises to be the next China opportunity.

These powerful made-in-China trends will present a challenge for the continued global leadership of Silicon Valley.

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08/18/2019 Plus légère et plus résistante que l'acier, la nanocellulose aiguise les appétits de l'industrie

Extraite de plantes ou de papier, la nanocellulose est biodégradable, renouvelable, compostable et très résistante. Elle s’impose comme un matériau d’avenir en application de surface ou dans des mélanges pour fabriquer papiers, carton, panneaux de bois, cosmétiques…

La nanocellulose constitue un matériau prometteur aux applications industrielles variées, même si les recherches se poursuivent pour préciser ses débouchés et améliorer sa rentabilité, selon des spécialistes du secteur. “Un énorme potentiel: c’est le futur de l’emballage et de la cosmétique (…) Vous en aurez partout d’ici moins de dix ans”, affirme Karim Missoum, PDG d’Inofib, une start-up issue du pôle de recherche Grenoble INP étudiant les applications possibles.

En avril, une étude du cabinet de conseil EY pour le ministère de l’Economie, menée avec les fédérations industrielles du papier et de la chimie, plaçait la nanocellulose parmi les solutions les plus encourageantes pour l’avenir de ces filières. Son atout clé: “La nanofibre de cellulose est cinq fois plus légère que l’acier et cinq fois plus résistante”, indiquait ce rapport, publié par le pôle de prospective du ministère, vantant “l’ouverture vers de nouveaux marchés” pour les industriels du secteur. De fait, les recherches s’intensifient depuis plusieurs années sur ce matériau de taille nanométrique (milliardième de mètre).

Pour renforcer l’imperméabilité du carton

Ainsi, à Grenoble, le Centre technique du papier (CTP) et l’institut technologique FCBA travaillent depuis 2006 sur la production, puis sur les applications, en testant différentes matières de base (pâte à papier, poussières de découpe, résidus de l’industrie papetière), explique Michel Petit-Conil, qui dirige une équipe sur le sujet. Le processus consiste à libérer des fibrilles de cellulose de la paroi de la fibre papetière, qui s’agglomèrent sous forme de gel. “La nanocellulose, c’est de la cellulose pure, c’est biodégradable, renouvelable, compostable, durable”, souligne Michel Petit-Conil.

Les débouchés potentiels sont nombreux, en application de surface ou dans des mélanges (papiers et carton, panneaux de bois, vernis, encres, cosmétiques). Le laboratoire du CTP a ainsi développé une application de “lamination humide” pour les emballages, avec “un film 100% nanocellulose qu’on dépose à la surface d’un papier ou d’un carton” pour en renforcer l’imperméabilité, explique Michel Petit-Conil.

Réduire la consommation énergétique lors de la fabrication

Mais l’objectif est maintenant de produire des nanocelluloses à très haute concentration, et de réduire la consommation énergétique liée à la fabrication, qui reste un enjeu majeur même si elle été “réduite de façon drastique”, ajoute-t-il. La nanocellulose existe aussi sous une deuxième forme, les nanocristaux de cellulose, qui ont des propriétés différentes des fibrilles et se dispersent bien dans l’eau sans former de gel.

“Il y a des propriétés optiques qui ne sont possibles qu’avec les nanocristaux, qui forment des cristaux liquides” ou permettent d’obtenir “une couleur sans aucun colorant”, explique Isabelle Capron, qui anime une équipe de recherche sur les nanostructures à l’Inra de Nantes.

Un marché estimé à 661 millions de dollars en 2023

Reste la difficulté liée aux autorisations pour les nanomatériaux, notamment en France. “Mais pour tous les pays asiatiques, qui n’ont jamais eu de réglementation sur les nanocelluloses (…) ça se fait très bien”, observe Isabelle Capron. “Il y a un vrai boom, tant au niveau des brevets que des articles et de la production”, ajoute-t-elle.

Le marché mondial de la nanocellulose est estimé à 285 millions de dollars et devrait plus que doubler pour atteindre 661 millions de dollars en 2023, selon le groupe canadien CelluForce, en pointe dans la production de cristaux de nanocellulose, qui se réfère à une étude indépendante.

“Le produit est vraiment encore récent”, mais “il y a un vrai engouement”, confirme Karim Missoum, le PDG d’Inofib. “En 2012, on était trois à vouloir essayer d’industrialiser ce produit. Fin 2018, ils étaient 63 producteurs à travers le monde, ça a pris un vrai essor”, note-t-il. Pour lui, “il y a vraiment une filière à créer, à industrialiser, et les acteurs français ont encore leur place sur le marché s’ils se motivent. Il y a encore du marché à prendre”.

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08/16/2019 Should You Get a Scary UV Photo of Your Skin Damage?

A technology grows in popularity among dermatologists, sunscreen brands and artists.

Witney Carson McAllister, 25, a ballroom dancer from Salt Lake City who won the 19th season of “Dancing With the Stars,” knows to the naked eye her complexion seems smooth, silky and blemish-free. “If you saw my skin you wouldn’t think I had any damage,” she said.

But as a survivor of skin cancer, she also knows appearances can be deceiving. So at the beginning of June she traveled to New York City to have a UV portrait taken by Pierre-Louis Ferrer, a Parisian photographer who specializes in them.

For such pictures a special camera, or a regular camera with a filter, catches UV light instead of visible light, exposing damage under the top layer of skin. Bruises, sun spots, freckles and other pigmentation all become apparent.

Ms. McAllister’s portrait was not flattering. It showed damage around her nose, most likely from sun beaming into the car when she drives. “I need to get bigger sunglasses,” she said. But she still decided to share it on Instagram with her million-plus followers. “I’m going to post a before and after,” she said. “People need to know what is happening to their bodies.”

UV photography has become popular with young people looking for ways to scrutinize their bodies and monitor their health. Some influencers, like Ms. Carson, use it to advocate for skin protection. Others simply want an interesting photo to post online. Dermatologists also use the tool to coerce their patients into taking better care of their faces; brands do so to sell more sunscreen.

Also in June, Walgreens gave a party at Milk Studios, a fashion hub in Manhattan’s Meatpacking district, that showcased the technology. (Ms. McAllister had her photo taken there.)

“I’m in the beauty industry so I feel I know I have a lot of skin damage,” said Jeanette Zinno, 33, a television personality who writes about cosmetics. “I’m in the sun a lot. I’ve had burns. I have sun spots and freckles. But while I can’t change the damage from my past, I still thought it would be interesting to see.”

In the 1970s and ’80s UV photography was used mostly for scientific experiments, like to study bee pollination (insects, unlike humans, can see UV light, which guides them to nectar on flowers).

“It’s funny, it’s been around a long time,” said Dr. David McDaniel, a dermatologist who worked on the bee research. “I remember using it when we had to develop film to see the photos. It seems like now there is a new awareness or application of it.”

In the last decade photographers like Cara Phillips, who lives in Brooklyn, have used it for art. Wanting to capture strangers, Ms. Phillips set up a camera in Manhattan’s Union Square and at the Scope Art Show with signs that said “Free Portraits.” To date, she has taken over 400 of them, to tremendous response.

“Those portraits went viral three times, in 2010, 2011 and 2013,” she said. “At one point it seemed like every major newspaper in the world ran it.”

Now Ms. Phillips is frequently approached by amateur photographers seeking her advice, as well as brands like Neutrogena asking her to work for their ad campaigns. “There is only so much you can do to make your picture look interesting in today’s world where pictures are everywhere,” she said. “Some people want UV photography because they want to do something different.”

Walgreens is another of those brands. In early June the drugstore chain started displaying signage featuring UV photography along with instructions for proper sunscreen application. The campaign also included influencers posting UV portraits of themselves online and tagging Walgreens.

“It’s different than any other image you can get,” said Crystal Fouchard, a senior director of marketing for the company. “It’s the honesty behind it, everyone knows there is nothing hidden there.”

There was a slight hiccup in the plan when a few Instagram users commented on social media that the UV photographs looked like blackface (their comments have since been removed). “Once people understood that the images these influencers posted online were UV images, and the purpose and intent of the program, the small number of comments subsided,” Ms. Fouchard said.

Ms. Phillips believes one of the reasons UV photography has become popular is because it fits in with a larger movement of transparency. The no-makeup selfie has become a thing. So have celebrities chastising magazines for editing their photos too drastically. Meghan Markle likes to ensure pictures show her freckles, reportedly demanding that the women on the cover of the British Vogue issue she guest-edited display theirs as well.

And there is nothing more unfiltered than a photo of hidden skin damage on your face, which is now offered (though not always covered by insurance) by many dermatologists, especially in places like New York.

Dr. McDaniel’s office estimates 30 percent of clients request a UV portrait when coming in for basic skin care appointments. Ninety percent want to have the analysis done once it is explained to them.

His office has started holding “lunch-and-learn” open houses every few weeks where he offers the service at no extra cost. The big ones can attract several hundred people. “We have three cameras in our office, and we have to borrow a fourth,” he said. “We also have a photo printer so people can take their picture home. But I can tell you, most people do not want to take it.”

Doctors don’t need UV photography for diagnostic purposes. “We are trained to pick up on subtle changes,” said Dr. Rachel Nazarian, a dermatologist with offices in Murray Hill. The pictures, she said, are “meant for dramatic effect. When I tell people they might get skin cancer, they don’t believe me. But when I say they might get wrinkles or spots, they listen.” When they see it, they listen even more.

Dr. Nazarian warns clients that while she can remove some of the damage they see, she can’t decrease their risk of skin cancer. She just tells them how to not put themselves at even more risk in the future.

“UV photography is like that show ‘Beyond Scared Straight,’” said Ms. Zinno, the television personality. “A lot of people see it and they are like, ‘Oh my God, I need to do better.’”

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