PPage 74age 74 DCF and valuation pIndustry oaramevervieterws I Points of view from EY global sector The beauty market: where to invest? and other industry professionals Digital native beauty brands with a big idea But there are many segments that escape even the Many of these smaller companies are located in Digital native brands have all the trends in their favor: lices of 9maron and Kephora, leaning the field open Forthern Atalq, ohere a specific sanoir faire exists. the consumer shift toward the internet, the to innovative e-commerce retailers, particularly in Others are located in Latin America, where local expansion of social networks, the development of the the luxury, pharmacy and professional segments. specificities, economic instabilitq and import dmties vloggers’ community, the explosion of e-commerce, Some e-commerce retailers are specializing in certain make such innovation and subcontracting strategies and the resistance of traditional brands to changing product categories, such as cosmetics (e.g., indispensable. Other such small companies are in their business models. For example, NYX Cosmetics, Beautylish) and perfume (e.g., The Perfume Shop), Asia, where the cost of production is generally lower. ohich oas recentlq acimired bq D’Gr†al, became a big plus new e-commerce models are appearing, not brand in the US by simply leveraging a community of unlike what is happening in the fashion industry with Digital beauty services YouTube creators. Sigma Beauty, another digital e-commerce sites Farfetch and Lyst. The future is here for digital beauty services. native, sells its makeup brushes and accessories Consumers access these services via laptops and thromgh an affiliation program ohere beamtq Innovation labs and subcontractors desktops, at home and in the street, on e-commerce vloggers receive a commission on every product that Innovation in beauty is absolutely critical, yet not all sites and in brick-and-mortar stores. Users may is sold after viewing one of their videos. companies can afford to pay an army of researchers discover new products, try a hair color, locate a or for sophisticated laboratories and all the product beauty professional (e.g., Uala in Italy and Style Seat Digital platforms, innovative business models development costs. The same is true for in the US — both online platforms to locate and Of comrse, there are big fish in the digital beamtq manufacturing, which is both capital and people reserve a stylist), receive recommendations or simply market too, namely Amazon and Sephora. Amazon is intensive. make a purchase — all online. Consumers may also try on track to becoming the online beauty generalist Even the large beamtq companies sometimes find it virtual makeup application, which enables them to retailer, with its amazing offers, competitive prices more convenient to outsource part of their innovation virtually try a brand’s products and colors on their and outstanding logistics. Meanwhile, Sephora is seeking and manufacturing to achieve speed to face, with a very realistic and dynamic result. establishing itself as the digital genius among beauty marcet and Öexibilitq. Lhis trend tooard Éopen retailers, by mastering social networks, in-store innovation” and subcontracting is stimulating the digital services and e-commerce. development of smaller, more focused and more Öexible companies that complement traditional beauty companies as well as start-ups. The luxury and cosmetics financial factbook 2016