Introduction: During the recent TFWA Asia Pacific Exhibition in Singapore, The Moodie Davitt Report Brands Director Hannah Tan-Gillies caught up with Coty Senior Vice President Global Travel Retail Guilhem Souche to discuss the beauty giant’s big Asia push. They also discussed Coty’s ongoing reinvention of its traditionally fragrance-dominated offer into a multi-category, multi-faceted portfolio with fragrance, beauty and skincare capabilities.
Coty’s third-quarter results published last month revealed encouraging momentum in travel retail with revenues surging +30% year-on-year and the channel accounting for a healthy 8% of group sales.
That performance came despite well-documented inventory issues in the key Hainan duty free market which have affected most leading beauty brands. However, April sales in China generally, and Hainan specifically, increased both versus last year and 2021, auguring well for the balance of 2023.
The much-awaited and accelerating return of Chinese outbound travellers is a further boost, says Coty Senior Vice President Global Travel Retail & Managing Director China Guilhem Souche.
Over the past three pandemic-ravaged years Coty, in common with its peers, shifted its strategic focus to other travelling nationalities. Now that the Chinese are returning, it is important to maintain a balance between demographics, he notes.
“Pre-pandemic we were heavily focused on China in Asia Pacific,” Souche comments. “During the pandemic, we had the opportunity to grow other regions and connect with our other consumers in Asia. Today, we’re seeing the first results behind our investments in APAC regions such as Southeast Asia and India.
“While the return of Chinese travellers does mean a revamped focus, we want to keep building the market share, we’ve built in the rest of Asia.
“This is especially true in countries where there has been a boom in fragrances, no slowdown in makeup and skincare is growing exponentially. Our approach is to be multi-regional, as we continue to build equity for our triple-axis brands.
“We’re strong in iconic fragrance brands and very strong in collections like Chloé Atelier des Fleurs which was the number four fragrance brand in China travel retail in 2022, based on Beauty Research data).
Makeup performs well and our skincare portfolio continues to be one of the most exciting growth areas in our business. This is what we want to keep on building.
“We’re very happy to see the progressive return of Chinese shoppers,” Souche continues. “We see a lot of individual travelling from China and are waiting for group travels to pick up again, too.”
The Chinese beauty consumer evolution
“The Chinese traveller of today is very different from three years ago and we’re prepared for that. We can see that there has been a huge boom in fragrances, driven by the Chinese. This boom has led to a new sophistication in terms of their fragrance knowledge and expertise. Before, they used to only go for light floral fragrances, but now they know the difference between oud, citrus top notes, oak, etc.
“That’s very good news for Coty because we are among the global leaders in fragrances. So, it’s great to know that the Chinese are coming back with a new love and knowledge for fragrances.
“There is also a huge middle class accessing the luxury world every year in China,” Souche adds. “Young customers who are savvy and sophisticated and that’s very good news. Our customers are very happy to travel. After being unable to these last three years, the Chinese shoppers are very excited to travel again.
“Our job is to help them indulge and give them a great shopping experience in travel retail, an experience which should be just as good as in the mainland.
“While the borders were closed, the China local market and Hainan kept on developing and so we need to match this abroad. We welcome them with memorable experiences, excellent retail design and of course, an impeccable portfolio. We now have a wonderful niche fragrance offering and Asian-focused shades in makeup such as our weatherproof Burberry Beyond Wear [which is known as ‘trench foundation’ in China -Ed]. We’re also going big on skincare and that is something we didn’t have pre-pandemic.”
Multiple pillars
Coty has invested heavily in diversifying its portfolio, boosting the critical skincare sector and broadening established brands such as Gucci and Burberry to include makeup and skincare.
“The biggest innovation this year is that we’ve significantly accelerated our skincare offering. In travel retail, Hainan was the first location where we launched our breakthrough Ligne Princière skincare line, pushing it as a skincare and not sun care brand. This has been well received in the China local market and we’re expanding in South Korea travel retail too.
“On 17 March, we launched TMall, Douyin and four local department stores and boutiques. In Hainan we launched one standalone Lancaster store with Wangfujing Duty Free – boosting our skincare visibility.
“Across the board, our collections are getting wider. Burberry Signature and Chloé Atelier des Fleurs are big parts of our sales. In makeup we’ve added categories we previously didn’t have. We have a lot of opportunities in our offer because we only launched makeup in 2019. So there’s a lot of incremental growth.
“We are expanding our portfolio to cater to all needs. That’s in conjunction with boosting brand awareness, implementing beautiful retail concepts and offering complete experiences which are different from each other.”
A key Coty focus is to develop products specifically focusing on Asian consumers. “The needs of Asian skin and Asian people are very different from the West,” Souche explains.
“They includes shades, textures and formulas that cater to different weather and temperature conditions. In skincare it’s all about routines. Asian consumers have longer skincare routines that incorporate essences and lotions. The successes we have in our fragrance portfolio in Asia differ region per region, which is also very interesting.”
Niche fragrances and the ‘skinification’ of beauty
The so-called ‘skinification’ of beauty is one of the sector’s key trends to emerge from the pandemic as consumers dedicate more attention to the health and wellbeing of their skin. “One of the reasons foundation has been resistant to COVID is that it has skincare ingredients,” Souche comments.
“Adding skincare ingredients to our formulas is something we’ve actively been working on. And I’m not just talking about travel retail and prestige brands, our consumer beauty brands are pushing the boat in skinification too.”
The rise of niche fragrances across Asia Pacific is another trend that Coty’s powerful fragrance portfolio is well-placed to leverage. “If you look at what we’re displaying here [at the Singapore show], you’ll see we have many collections such as Chloé Atelier des Fleurs, Gucci The Alchemist Garden, Burberry Signature and Boss The Collection that highlight the power of our fragrance portfolio.
“People are responding very well to niche fragrances because they enable consumers to differentiate themselves through strong storytelling and quality of the ingredients. This goes hand-in-hand with strong retail expression, particularly in travel retail.”
Fly With Me
Coty has invested heavily in blockbuster multi-brand pop-ups in Asia Pacific, including its recent ‘Fly With Me’ pop-up in Changi Airport and last year’s successful ‘Around The World’ animation at GDF Plaza in Haikou, Hainan province.
The omnichannel animation, which ran from 15 April to 24 May, reinforced themes of travel and discovery from Coty’s signature fragrance brands. It offered a curated scent assortment bolstered by interactive digital and retailtainment elements. A ‘Fly With Me’ airplane served as the centrepiece while a gamepad invited travellers to embark on an olfactive discovery experience by diffusing different scents using a joystick.
A Flight Simulator offered an interactive gaming experience whereby consumers could fly their own plane and aim to attain the best score while a multi-scented tablet allowed shoppers to choose their bespoke perfumes.
Integral to the promotion was a new partnership milestone with Alipay+, the global cross-border mobile payments and marketing solutions app. Thanks to the alliance, Singapore became the first destination outside of China to introduce Alipay Super Brand Day.
“We are developing this animation in other cities too and we can adjust the Sense of Place elements depending on the retailer and location,” Souche says.
“The pop-up attracts travellers because of its many playful elements. It’s a very memorable experience that you can only have in travel retail. On top of that, the animation debuted our partnership with Alipay+.
“We can activate cross-border payments and collaborate with Alipay+ on marketing solutions that reach Chinese travellers throughout their journey. In terms of the activation of this partnership, we need to look at where the Chinese shoppers are travelling. So, we’re rolling out in APAC but potentially it could go global too.”
Coty’s big skincare bets
As noted, Coty has mounted a big push in evolving Lancaster from a sun care brand into a full-fledged skincare proposition. The brand launched the travel retail-exclusive, super-premium range Ligne Princière, which pays homage to Lancaster’s royal roots in the principality of Monaco.
“Lancaster and Ligne Princière are enjoying more and more buzz in China. We’ve also partnered with Lotte Duty Free for some livestreaming sessions to boost awareness for the range in South Korea,” Souche comments.
“When you launch a new range like this, you need to communicate it in a major way. We’ve got great feedback already, but it is a significant investment for us so we’re going to focus on this long term.”
Orveda, Coty’s super-premium skincare brand, is another key focus. The brand revealed its innovative Orveda OmniPotent Concentrate serum and Infiniment Coty Parison 13 May at the Villa Botanica in Grasse, France, a spectacular event which was attended by The Moodie Davitt Report Founder & Chairman Martin Moodie. The brand was co-founded by Coty CEO Sue Y. Nabi and Nicolas Vu in 2014 with the aim of ‘reinventing high-end skincare’.
“Orveda is inspired by Ayurvedaism and was created with Asia in mind,” Souche says. “We’ve launched in November in China and in Hainan. Now, we’re starting to have a good visibility for the brand in other regions and it’s been well received.
“It’s ultra premium so we’re going to take the time that we need to develop it and attract the savviest customers. The fact that it is made with biotechnology with high concentrations of active ingredients is very appealing to customers. The routine is very appealing to Asian consumers and so far it has been welcomed by the travel retail community.”
That welcome has clearly been extended across a powerful and now healthily diverse portfolio that sees Coty gaining rapid traction within an intensely competitive travel retail beauty sector. ✈
