Amazon and Luxury Cosmetics

choi

Stephanie Wong, Will Amazon Give Cosmetics a Makeover? Bloomberg BusinessWeek, Jan 15, 2018.
https://www.bloomberg.com/news/a ... -an-amazon-makeover

Quote:

(a) "For beauty companies, image is everything. For Amazon.com Inc—which made a name for itself based on assortment, price, and speedy delivery—not so much.

(b) "Amazon has quietly become the largest online beauty retailer in the US, with 36 percent of the market, according to analysis company Amazon has quietly become the largest online beauty retailer in the U.S., with 36 percent of the market, according to analysis company 1010Data. Its expansion has encroached on specialty retailers, but most of the products sold are still mass-market brands, such as Clairol or CoverGirl, as well as young independent labels, rather than pricier premium goods. That’s largely because many cosmetics companies are concerned that putting their upscale lines on Amazon would lessen their cachet.

"Brands have fought hard to keep their sales channels limited. The European Union's top court ruled last month that luxury-goods companies, including Coty, aren’t violating antitrust rules by restricting where their products can be sold. 'The quality of luxury goods is not simply the result of their material characteristics but also of the allure and prestigious image which bestow on them an aura of luxury,' the EU judges said in the case.. Its expansion has encroached on specialty retailers, but most of the products sold are still mass-market brands, such as Clairol or CoverGirl, as well as young independent labels, rather than pricier premium goods. That's largely because many cosmetics companies are concerned that putting their upscale lines on Amazon would lessen their cachet.

"Brands have fought hard to keep their sales channels limited. The European Union’s top court ruled last month that luxury-goods companies, including Coty, aren’t violating antitrust rules by restricting where their products can be sold. 'The quality of luxury goods is not simply the result of their material characteristics but also of the allure and prestigious image which bestow on them an aura of luxury,' the EU judges said in the case.

Note:
(a) summary underneath the title in print: It's become the biggest seller of beauty products online. But upscale brands worry about its lack of cachet
(b) The print and online versions are the same, EXCEPT in the first sentence of quotation (b), it is "36 percent" online and "21 percent" in print. I do not know which is correct,
(i) because the online version supplies a link by clicking "1010Data." but the link to 1010Data, inc's website does not work; and
(ii) because 1010Data has not published the statistics for 2017. For that of 2016, see April Berthene, Amazon Nabs the Top Spot for Online Cosmetics Sales. Digital Commerce 360, Feb 23, 2017
https://www.digitalcommerce360.c ... ne-cosmetics-sales/
("Amazon.com Inc's marketplace is responsible for 21.1% of online beauty sales in 2016, the largest of any other online retailer, according to a new report by 1010data")

(c) There is no need to read the rest of either report (BusinessWeek, 360).
(d) Maker of Noxzema skin cream, Noxzema Chemical Co of Baltimore, Maryland, diversified and formed a beauty product line CoverGirl in 1958. Procter & Gamble acquired CoverGirl in 1989, and sold it to Coty, Inc in 2016. CoverGirl remains based in Maryland.  François Coty founded Coty, Inc in 1904 in Paris, whose headquarters has been moved to New York City.