“Buy small to become big.” These few words outline the commercial strategy of Univeler. According to the 2015 Nasdaq report, skin & hair care made up 27% of Univeler’s revenue, making it the biggest division of the company.
According to Trefis estimates, Unilever holds around 9-10% share in the skin & hair care market.
Recent years have seen the emergence of a middle class with higher disposable incomes in developing countries. This development means that the global, premium products market is expected to grow faster than the mass market. In order to ensure that the company benefits from this change in the global market, Univeler has acquired 10 brands including: Camay & Zest, REN, Kate Sommerville, Dermalogica, Murad, Seventh Generation, Dollar Shave Club. These brands are all related to the cosmetics industry and wellbeing and so will prove a profitable purchase for the company if the premium products market grows as predicted.
Univeler became the second largest company in the Cosmetics industry after L’Oréal.
Its expansion strategy is very simple; they purchase small, little known brands with a yearly income falling short of the €1billion mark. After, they expand these companies and increase their profits. Univeler has implemented this strategy across 190 different countries, developing various companies and harnessing the profits.
However, Univeler has also acquired well-known companies to consolidate its strength in the cosmetics market and show its economic potential to competitors. In 2017, Univeler purchased the South Korean cosmetics group, Carver Korea for €2.27 billion. This purchase is the largest in the Anglo-Dutch group since 2010. In the wake of such a grand acquisition, Univeler has now revealed its plans to focus more on the rapidly growing beauty products market, at the expense of its historical activities in food and cleaning products.
It has also detected the trend in the market for natural beauty products and were quick off the mark in buying the Equilibra brand, a few months ago. As a result of this action, this brand has control of a significant section of the market for hygiene-beauty products based on vegetable ingredients.
The last trend for Univeler and the biggest companies in the cosmetic industry is to appeal women in emerging countries. Texture, colour, packaging … Multinational cosmetics adapt their ranges with local tastes. A fast profitable investment in a country like Brazil where women use five beauty products a day. For L’Oréal, Unilever and others Procter & Gamble, they need an adapter for products in Europe or North America, “especially in terms of colours and textures to meet the needs and expectations of these new consumers.
Univeler is rapidly expanding, and this is due to the company’s uncanny ability to spot trends in the market and move quickly. They hope to continue their expansion, buying companies large and small while also promoting an environmentally conscious image and reducing their carbon footprint. In moving away from sectors that once held their attention and focusing on the cosmetics industry with more strength, Univeler has become one of the most dominant players in the beauty and health sector.
References :
Trefis Team (December 30, 2016) : “Unilever’s Acquisition Spree In 2015 And 2016 Could Help Boost Its Revenues and Profits”, retrieved from
Scheherazade Daneshkhu (June 4, 2018) : “Unilever looks to be stepping up its beauty regime”, retrieved from
https://www.ft.com/content/c9278e4c-58f6-11e8-bdb7-f6677d2e1ce8
Cos' we care ! 