L’Oreal creates new division to focus on booming travel retail
French cosmetics giant L’Oreal has created a new travel retail division to make the most of a 17-billion-euro (14 billion pounds) market that is booming as a new, moneyed middle class emerges from China to Brazil. L’Oreal said the democratisation of travel had created a new “sixth continent” of consumers ready to buy items such as high-end cosmetics during their journeys.
ales of goods in airports, cruise ships and duty-free shops grew 9 percent last year to 55.8 billion euros and are set to reach more than 100 billion euros in the next ten years, according to market research firm Institut Generation. Cosmetics such as perfume, skincare and make-up were the biggest category, accounting for around 30 percent of travel retail revenue last year, or 17 billion euros.
L’Oreal dominated the travel retail market in 2012, with a market share of 21.6 percent, Institut Generation said. The new division will oversee the sale to travellers of L’Oreal’s luxury products such as Lancome creams and Yves Saint Laurent make-up as well as brands such as La Roche Posay and L’Oreal creams and Kerastase shampoo.
Rivals are pushing hard to compete. The travel retail arm of luxury giant LVMH, whose Dior, Guerlain and Givenchy cosmetics products vie with L’Oreal’s luxury brands, has been the fastest growing of all the group’s businesses.