L’Oréal hot on the heels, but Olay still most valuable cosmetics brand

By Andrew MCDOUGALL contact

- Last updated on GMT

L’Oréal hot on the heels, but Olay still most valuable cosmetics brand

Related tags: Cosmetics, Brand

Olay maintains its dominant position at the top of the BrandFinance Cosmetics 50 table, but a slight value fall coupled with a surge in competitor growth has seen L’Oréal eat away at that lead.

According to valuation consultancy BrandFinance, Olay has a value of $11.7 billion but its lead at the top has shrunk from $4 billion to $3 billion following the growth of L’Oréal; which has continued its progression moving up one spot, just as it did the year previous.

The French brand has seen its value growth beat everyone else taking its total brand value to $8.7 billion.

Highs and lows

L’Oréal is followed in the BrandFinance Cosmetics 50 by Neutrogena, Nivea and Lancôme which have all recovered well from brand value falls last year.

The story is not so positive, understandably, for Avon, who despite sitting in sixth, has been the year’s biggest casualty, having been second placed last year.

According to the consultant’s analysis, Avon has lost $2.7 billion of brand value this year coupled with the $2.3 billion lost last year, meaning its brand value is down $5 billion on 2011 and now stands at just $5.2 billion.

The particularly dramatic brand value falls suggest low levels of investor confidence following a turbulent time for the company over the last 12-18 months.

Resilient beauty

Commenting on the results, Mary-Ellen Field, chairman of Brand Finance Australia states that in general, the global beauty industry continues to do well.

“With the increasing wealth of women in developing economies we have not surprisingly seen the sales of beauty products in these countries growing,”​ she says.

“Cosmetic halls in department stores throughout the world continue to be exciting places despite growing competition from Internet sales.”

Brand strength

BrandFinance calculates brand value using the Royalty Relief approach, and is essentially the cost that a third party would have to pay to license the use of a brand.

Brand strength analysis benchmarks the strength, risk and future potential of a brand relative to its competitors.  This takes into account financial metrics such as net margins, average revenue per customer, marketing and advertising spend as well as qualitative measures such as brand affection and loyalty.

The full list of the Cosmetics 50 can be seen here.

Related topics: Market Trends

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