Cosmetics Billionaires: COVID test of the beauty industry

Updated: Nov 19

Cosmetics industry witnessed a moderate growth in the generation of the billionaires amongst the pool of billionaires from 2000 to 2010. The sector was too slow in producing billionaires in the light of emerging industries with new billionaires, though second decade of the century was better due to the clear signs of demand in new world markets.

The share in the number of Cosmetics billionaires plummeted from 2.5% to 1.0% in the list of billionaires over a 20 –year period.

In fact, total wealth share of the billionaires in the cosmetics industry among all billionaires was more than 2.6% effectively indicating a heavy concentration of the whole industry in few hands.

Our analysis covers current situation of the ownership in cosmetics industry with from the perspective of recent events and gives a glimpse into the future development, given the rise of social media.

The richest people in the cosmetics industry mainly representing France, L’Oreal shareholder - Francoise Bettencourt Meyers, Chanel’s Wertheimer family and LVMH founder, Bernard Arnault given cosmetics has a substantial 15% share in the whole LVMH Group revenues with established American Lauder family have set quite high entry barriers making it a huge challenge for other billionaires to claim the top spots.



The average net worth of these four families was 13 times more than Brazilian-Bolivian entrepreneur, founder of Boticario, Miguel Krigsner whose family would be listed fifth in the ranking according to Forbes Billionaires 2020.


Interestingly, those top cosmetics players are family businesses either in the form of transferred shareholdings or with the involvement of the next generation family members.



Our chart explains every past five year separates the line of Top 5 billionaires from the rest, specially given COVID-19 driven sustainability burden on smaller players.


We observed extreme capital concentration at company level too while looking at the list of the largest publicly listed cosmetics companies in September, 2020.


Asia is represented by 73 companies in the list of the biggest publicly listed cosmetics firms led by Japan (23), Korea (22), China (13) and Taiwan (7)


This number opens three broad questions that requires further analysis and is not in the scope of our current research:

  • Have the European and American anti-monopoly regulators downplayed the rise of giants?

  • Do the Asian cosmetics firms underperform given deep competition in the region and stay smaller?

  • May it be the case that cosmetics businesses stay away from public markets in North America & EU?



In this list, our analysis of the biggest 30 publicly listed cosmetics companies shows founder-owned firms performed much better than family-owned businesses and diverse shareholder groups since the start of this turbulent year. 8 out of 11 founder-owned companies have become bigger in market capitalization as of 20 Sep. 2020 compared to 1 Jan. 2020. So, founder-led cosmetics businesses have performed better than others during the COVID-19 and showed resilience in navigating the pandemic with quick decision-making and fast move to the online channels.


FACTS: PERSONALITY

11 Women have appeared on the billion-dollar club list in total of 32 cosmetics billionaires since 2000
One in five of the all current cosmetics billionaires have divorced at least once during their lifetime slightly higher than global average. This figure is two times lower among the women billionaires of this industry.
Overall, 25% of the women billionaires are self-made.
Cosmetics is the only industry where this number reaches to 50% due to the rise of female founders in skincare segment during the past five years.

Approximately $145 bln. cosmetics originated wealth of the billionaires will be transferred to the next generation in this decade. We expect the number of cosmetics billionaires will double by 2035 sourced from family businesses.


Our research concludes with the potential billionaires in cosmetics industry while having a historical development in front of our eyes.


Rise of the local demand in Brazil and neighboring emerging markets has created three new cosmetics billionaires out of four newcomers globally between 2005-2010.

Aftermath of global financial crisis and early 2010s, massive wealth transfer to the next generation of the cosmetics family businesses took place and we saw new names in billionaire lists due to the dilution of cosmetics wealth.


Differently enough, the last five years before the pandemic could be remembered as golden age of women founders mainly in the US pushed by the impact of the social media, though the richest person of the cosmetics industry today was named during that period as the passive shareholder of the biggest pure-play cosmetics firm in the world.


We have listed some of the key takeaways for the next five years, where our team expects emergence of new billionaires given their business and personal profiles:

  • Led by China, Asia emerges as the biggest cosmetics market

  • Women entrepreneurs & influencers are expected to dominate in the industry

  • Founders of natural skincare brands will rise due to consumer preferences

Our full report might be downloaded below:

Cosmetics billionaires
.pdf
Download PDF • 1.10MB

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