BW Confidential - Issue #14 - May/June 2013 - (Page 26)

Interview Clarins Group ceo Philip Shearer Asian ambitions Clarins Group is out to boost its presence beyond Europe and especially in Asia. Group ceo Philip Shearer talks strategy and gives a frank view on the state of today’s retail and skincare market by Oonagh Phillips L ike many other companies in today’s beauty market, expanding in Asia is a priority for Clarins Group. And like many other companies the attraction lies in the region’s high growth rates, the expanding base of Chinese consumers and their importance to travel retail. But unlike some of its rivals, the Clarins Group is well positioned to develop in this region, given its strong skincare franchise—the Clarins brand. However, the majority of the group’s business—around 60%—is still concentrated in Europe, which Clarins Group ceo Philip Shearer admits is too much. In addition, analysts question whether the group may be coming a little too late to the Asian party to gain a strong foothold in countries like China, where in the main cities, the beauty category is already dominated by the major multinationals. Shearer says that the group has its own set of tools for doing business in these markets (and at home) and will not go head-to-head with the big hitters by playing by their rules, which center predominantly on massive advertising. Instead, his tools include an emphasis on sampling, spas, CRM and more focus on service. Asia’s high growth rates are not the only reason for prioritizing this region. The state of the market in Europe is also a major motivating factor. Although Clarins enjoys a market share of 26% in skincare in countries like France, Shearer states that the skincare market in Europe is suffering, mainly at the hands of the retailers who are doing little to push the category forward. Given this situation, finding growth elsewhere is looking less like a choice and more like an obligation. What is your outlook for 2013? The year 2012 was pretty good. Asia is doing very well, Europe is difficult, the US is recovering strongly and Latin America is small, but has potential. We are going to see more of the same this year. In Europe, Clarins has gained market share everywhere—we have a 16% market share in skincare, ranging from a low of 8% or 9% to a high of 26%. Last year, we had our highest market share ever with Clarins in France, at 26%. In Europe, the big question is France. There 26 and in most of continental Europe, skincare is going nowhere, as the market is far too dependent on fragrance. Skincare in France has been suffering for years and we are losing units to the point where the market is becoming small. Why is skincare suffering so much in Europe? Retailers have not pushed the category forward enough. You just have to walk around stores to see that skincare isn’t well taken care of. Our solutions are simple: consumers require unbiased service; they want to sample brands and they want to navigate stores easily. Today this is challenging, which is why we came up with digital tools, where consumers can scan a barcode and see what the product is about. We have also added people in the stores, which was supposed to be the retailer’s responsibility. We have solutions, but not all retailers are embracing them and there is no sense of urgency to do so. So in that case, if they’re not going to do it, I’m going to spend my money somewhere else. Where else will you spend your money? In Asia. We will never give up on France, as it is our base, and you can’t be strong anywhere unless you’re strong at home. However, it is more effort than it needs to be. Retailers say brands raising their prices are contributing to a shrinking market. Is this the case and are private-label products also damaging the market? Are retailers also telling you that the cost of operating with them is increasing? As for private label, it is, in a way, contributing [to the shrinking market], but this is competition. If the consumer buys private label and thinks she is getting the same stuff as she gets from me, that’s her right and it is because I have not done my job to convince her that she should buy my products. Private label is part of it, as is the way the sales girls operate, and the way retailers buy the merchandise. May-June 2013 - N°14 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #14 - May/June 2013

Cover
Comment
Contents
Update
- Brand & retail news recap
- Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Clarins Group ceo Philip Shearer
Insight: Skincare
- Category overview
- Skincare devices
- Retail case studies
- The latest trends
Retail
- Amazon
- Store concepts
Digital Facebook
Market watch: China
- Country overview
- Industry viewpoint
- National domestic airports
- Department stores
- Third- & fourth-tier cities
Travel retail
- Emerging Asia analysis
- Passenger profiles
- Interview: King Power Group Duty Free & Travel Retail Hong Kong managing director Sunil Tuli
Radar Up-and-coming brands
Emerging markets Company profile: VLCC
Packaging
- Industry outlook
- Differentiation techniques
Last word Brand Keys founder and president Robert Passikoff

BW Confidential - Issue #14 - May/June 2013