Estée Lauder creates Advanced Night Repair store at Beijing Airport

Estée Lauder strengthens its position as the leading travel retailer in the Asia-Pacific market with the launch of Advanced Night Repair concept store at Beijing Airport. The travel retail channel is one of ELC’s strongest distribution networks which has grown at thrice the pace of international passenger growth rate in FY2013. The article below discusses how the newly opened store will shape ELC’s history of market leadership.

CHINA. Estée Lauder has created an Advanced Night Repair Synchronized Recovery Complex II concept store, in partnership with Sunrise Duty Free, at Beijing Capital International Airport Terminal 3.

The boutique, operational throughout April, showcases the brand's best-selling serum and how it supports a natural night-time purification process called Catabolysis, which is vital to younger-looking skin.

Image Source: moodiereport.com

The concept store features a luxurious city loft design and incorporates exterior glass windows that expose a city skyline, and sparkling, starry night-style lighting within the exterior canopy and store ceiling. A lounge area in the centre aims to offer travellers a welcoming environment.

Estée Lauder Beauty Advisors are on hand to educate consumers on the extensive clinical, sensory and safety testing of Advanced Night Repair Synchronized Recovery Complex II, which has been completed on over 1,000 women around the world. Caucasian, Black, Indian, Hispanic and Asian women – including Japanese, Chinese and Korean consumers – were all featured, demonstrating that Advanced Night Repair Synchronized Recovery Complex II is ideal for all skin types and proven for all ethnicities.

Estée Lauder introduced the concept of night-time repair to the anti-ageing category in 1982, when Night Repair – as it was then known – revolutionised the segment. The formula, presented in the now-iconic “little brown bottle” with the apothecary dropper, rapidly became one of the best-performing skincare products in Estée Lauder history.

The latest formulation features new ChronoluxCB Technology, which is said to take advantage of the restorative power of night by combining potent purifying and synchronising technologies to maximise nightly renewal of the look of skin.

Advanced Night Repair Synchronized Recovery Complex II is claimed to dramatically reduce the look of every key visible sign of ageing for a significantly younger look. Lines and wrinkles look significantly reduced and skin is strengthened to help prevent further damage, according to the brand.

In addition, there are High Touch elements, featuring consultations via digital tools, including a skin analyser and imatch foundation finder. 

Estee Lauder Chairman William Lauder remains true to the company’s legacy of leadership in the beauty sector as he continues to establish ELC as a strong travel retailer within the Asia-Pacific region. Follow this blog for more news and information on ELC’s growing portfolio of prestige skincare brands.

REPOST: Higher Passenger Traffic From Asia-Pacific Should Bolster Estee Lauder Travel Retail Sales

Forbes analyzes how the growth in Asia-Pacific passenger traffic would drive the future of Estee Lauder Companies in the travel retail sector.

Image Source: chinadaily.com.cn

 

In FY2013, prestige beauty product maker Estée Lauder reported sales of approximately $10.2 billion compared to $9.7 billion in sales in FY2012, a 5.2% increase. The company sells its products through various upscale departmental stores, specialty retailers, prestige salons and spas. In total, Estée Lauder estimates it has close to 30,000 points of sale within these distribution channels, generating sales of its beauty products across the world. Additionally, the company also markets its products through freestanding stores, duty-free and travel retail outlets worldwide, and also its own and other authorized retailer websites.

In this note, we provide an analysis of Estée Lauder’s travel retail business, underlining various factors that impact the division’s performance and its potential value contribution to overall top line for the company. We have a $75 Trefis price estimate for Estée Lauder, which stands at an 11% premium to its market price.

A Look At Estée Lauder’s Travel Retail Business

Travel retail sales for Estée Lauder increased to over $1 billion in FY2012, driven by the increase in global passenger traffic. For fiscal 2013, sales from the travel retail channel grew at thrice the pace of global passenger growth rate. According to data from the IATA, global passenger demand expanded 5.2% in 2013, from close to 3 billion passengers in 2012. This should put Estée Lauder’s travel retail sales growth rate at over 15% for fiscal 2013, to stand at approximately $1,156 million. Much of the 15% growth rate in travel retail comes from the sale of skin care products. As a percentage of overall revenue, this marks a sizable 11.4% contribution from the travel retail channel for Estée Lauder.

Asia-Pacific Passenger Traffic Growth Should Support Strong Travel Retail Expansion

A major factor for travel retail revenues standing at three times global passenger traffic is the combination of expanding disposable income in the Asia-Pacific region, along with strategic positioning of travel retail outlets by Estée Lauder. The main customer base for a travel retail outlet is the global passenger, and hence, positioning such outlets in high traffic corridors is key to having a higher growth rate.

International passenger demand is the highest for the Middle Eastern region at 12.1% in 2013. Similarly, emerging market regions of Latin America, Africa and Asia-Pacific registered growth rates of 8.1%, 5.5% and 5.3% respectively, in international passenger demand. Meanwhile, developed economies of Europe and North America had growth rates of 3.8% and 3% in international passenger demand. The Asia-Pacific region, in addition to outpacing passenger demand from developed economies, leads the world passenger traffic with a 29% share according to Airbus, followed by Europe and North America at 26% and 25% respectively.

Estée Lauder has capitalized on the strong demand for international travel from Asian customers and is the leading travel retailer in the Asia-Pacific market. By the end of fiscal 2012, the company had a total of 1,600 travel retail outlets worldwide. However, we believe a majority of these travel retail outlets to be situated in travel corridors popular among Asian customers, given their expanding discretionary wallet share. Going forward, the company could continue to establish itself as a strong travel retailer within the Asia-Pacific region by opening more stores.

Image Source thehighlow.com

Travel Retail Investments Should Lead To Market Share Expansion For Estée Lauder

Going forward, Airbus expects domestic travel within China and India to drive overall Asia-Pacific passenger demand, with annualized growth rates of 7% and 10% respectively through 2032. In addition to strong domestic travel growth, international travel corridors (such as Intra Asia, Asia – Middle East, Asia – PRC and Central Europe – Western Europe) are expected to see a higher demand in passenger traffic than the global growth rate of 4.7% annually through 2032. This burgeoning demand surrounding the Asia-Pacific and Middle East regions should drive future investments into travel retail from cosmetics companies.

We expect Estée Lauder to increase its investments into the travel retail business in the future, driven by the higher revenue growth rate from the division. Through its travel retail channel, Estée Lauder has achieved a 15% top line growth rate compared to 4% for overall revenues in CY2013. Additionally, growth in travel retail is primarily resulting from the sale of skin care products. At the end of CY2013, we estimate Estée Lauder’s skin care market share to stand at approximately 7.6%. However, higher investments into travel retail should be able to drive future revenues and expand its skin care market share in the future.

William Lauder has been able to shape Estée Lauder Companies into a brand-building powerhouse that it is today with his leadership and unparalleled commitment to innovation and creativity. Click here for more updates on ELC's expansive portfolio.