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Earlier this week, beauty brand Coty made headlines when it paid $600 million to gain 51% share in Kylie Cosmetics. On the same day, The Estée Lauder Companies acquired Korea-based Have & Be Co. Ltd., the company behind Dr. Jart+. Mintel beauty experts, Lauren Goodsitt and Sarah Jindal discuss what these investments and acquisitions mean for the brand and industry’s future:

Mintel Global Beauty & Personal Care Analyst, Lauren Goodsitt

When Coty invested in Kylie Cosmetics, Coty not only bought into the brand, but also invested in Kylie’s persona. Kylie established the brand by generating followers on social media, cultivating a community where she gained the trust of her audience. Kylie’s final step was to launch a brand authentic to her image and in-demand from her followers. The investment in Kylie Cosmetics broadens Coty’s reach to a new consumer base, specifically younger consumers. Along with this new partnership, expect Coty to assist in the global expansion of Kylie Cosmetics. Coty has access to retailers around the world and will certainly be able to help grow the brand.

Mergers and acquisitions are hot topics in today’s beauty world. It seems that almost daily, smaller indie brands are being scooped up by large established beauty brands. A key difference in Coty’s investment in Kylie Cosmetics as opposed to Estee Lauder’s acquisition of Dr. Jart is just that, it is an investment rather than a total acquisition. In this type of business model, Kylie can stay involved in the brand, allowing Coty to capitalize on her reach. Expect Coty to fully acquire Kylie Cosmetics within the next five years. With that said, will the average consumer realize that Coty acquired a majority stake in the company? Similar to other acquisitions and investments in the beauty industry, as long as the brand remains true to its roots, it is likely that the average consumer will not notice a difference.

As the beauty landscape continues to shift, it will be interesting to see how the partnership grows. From accusations surrounding Kylie’s lip fillers to owning a cosmetic business valued at over $1 billion, Kylie Jenner certainly has made her mark on the beauty industry. Her Holiday ’19 collection dropped this past Tuesday, and by Wednesday was nearly sold-out. The demand remains intact and young consumers continue to support Kylie even in the face of Coty’s investment.

Mintel Senior Global Analyst, Beauty & Personal Care, Sarah Jindal

Estée Lauder’s major investment into K-beauty with its purchase of Have & Be Co. Ltd, the Seoul-based skincare company behind the cult brand Dr Jart+, marks Lauder’s first acquisition of an Asian-based business, but not its first investment. In 2015, Lauder made a minority investment in Have & Be and will now pick up the remaining two-thirds of the business. Both companies have declined to disclose the exact amount but it is estimated to be around $1.1 billion.

Dr Jart+ has gained quite a following in the Western markets with high-performance, dermatological skincare that focuses on interesting active ingredient stories, such as cica and ceramides, building easy-to-understand, streamlined skincare regimens that address key consumer concerns such as dryness and sensitivity. The interesting thing about Dr Jart+ is that they never played up the K-beauty angle in their marketing during a time when it seemed that being from Korea was enough to guarantee a brand’s success. They were still successful in attracting a devoted fan-base, particularly among millennial beauty consumers in the US and Asia, due to functionality and unique product formats.

This acquisition not only strengthens Lauder’s position in prestige skincare, but also opens up key Asian markets to the Estée Lauder stable of brands, facilitating rapid global expansion. Access to South Korea and China will be key for the company moving forward. Travel retail is also a strong outlet for both Dr Jart+ and Estee Lauder and has been identified not only as a high growth channel for beauty but often, for travelers from emerging markets, their first exposure to global brands.

Global companies have realized that Korean beauty brands are marketable outside of Asia and we’ve seen this play out in previous acquisitions with Unilever acquiring Carver Korea in 2017 and L’Oreal’s purchase of Nanda, parent company of 3CE, last year.