Scaling up your business, means expanding your brand internationally. There are a number of ways in which to approach entering a new market – through working with a distributor; through selling directly into retailers; through opening up stores with franchisee partners or setting up your website in the new market, supported by marketing and a 3PL.
The beauty industry is a buoyant industry, valued at $430 billion in 2022, and it is constantly evolving. Unlike some sectors, it draws in a wide array of people from different backgrounds, from investors, to celebrities, dermatologists, doctors, dentists to everyday people who have come up with their version of the next Big Idea.
Whilst it did experience a dip during COVID-19 it recovered quickly, and is estimated to be worth $580 billion by 2027, growing at a projected rate of 6% a year. One of the fastest growing channels within the beauty industry is ecommerce, unsurprisingly this quadrupled between 2015 and 2022, and now has a share of 20%. Travel retail has also bounced back following COVID-19, with several global beauty brands like Rituals and Augustinus Bader, experiencing phenomenal growth across travel retail.
In terms of markets, the US and China remain the two biggest markets, although this is driven by large multi-national companies, followed by Japan, India interestingly, Brazil, Germany and France. Both the Middle East and India are predicted to be the two new hot spots, and we have already seen several very innovative brands from India, launching into the UK market.
Trends driving growth include the blurring of lines between beauty and wellness, which now encompasses health and fitness, mental health, sexual health, nutrition, and apps. We have also seen a shift in consumers habits, with the rise of the digitally savvy Gen Z generation shopping across platforms like TikTok and YouTube, claiming to try new brands every two to three months. We have also noted a rise in the ‘ultra luxury’ category with consumers buying into prestige hair care, fragrances and skincare products.
Over the past year, we have been consulting with more and more of our clients, on how to grow their brands across marketplaces including the UK, Europe, Middle East and Travel Retail. If international growth is on your agenda for the foreseeable future, there are a few elements to consider when exporting:
- Value and USP –What is your USP and how does this differentiate your brand from others – defining this from the outset is important.
- Understanding your customer – The greatest beauty businesses focus on delivering a particular product to a specific group of customers. Addressing the needs of a well-defined audience provides clarity to what you’re offering your customers. Remember customer experience is an equally important priority.
- Regulatory & Compliance – In the UK, the manufacture and supply of all cosmetic products is governed by the UK Cosmetics Regulation. Do your products comply with regulations in the UK? Do you need to change your artwork? How are you going to manage the Responsible Person?
- Considering margin and volume – Retailer margins are an important consideration. Better margins don’t necessarily equate to greater sales if you are selling low volumes, so of equal importance is identifying the right retail partners.
- Legal Aspects – Consider the legal implications of entering a new market – are you setting up an office in the UK, how are you managing your banking, VAT, Tax, trademarks?
- Timing –once you have determined what your market entry strategy is, you need to commit to this for a minimum of 6 months; most companies commit to up to 18 months to reap the true benefits.
Scaling up your brand is an exciting consideration, and there are a number of independent brands who are achieving this very successfully.
Working with Bespoke Advantage
Bespoke Advantage is a London based international beauty brand consultancy. We are a team of experts, associates and business partners specialising in supporting our clients – award-winning entrepreneurs, well established beauty and wellness businesses, retailers, investors, trade bodies and embassies – in developing and growing their brands across the beauty and wellness marketplace. If you are looking to launch a beauty or wellness brand or you are looking for support in expanding your brand across markets, GET IN TOUCH.
