The Body Shop, a leading brand in the clean beauty sector, announced in January that it had become the first global beauty brand to use 100% vegan formulas across all of its skincare, body care, haircare, cosmetics and fragrance product lines, with all of its product formula portfolios certified by the Vegan Association.
It is reported that in late January this year, it was reported that Aurelius Investment, the parent company of The Body Shop, had ** most of the brand's physical and e-commerce businesses in Europe and Asia, accounting for about 14% of its brand's global sales.
On February 13, local time, Aurelius Investment has appointed three personnel from the business consulting firm FRP as joint managers to deal with the bankruptcy and restructuring of the brand's UK business. On 14 February, The Body Shop Germany also filed for bankruptcy with the Düsseldorf District Court. According to the British Guardian, the brand's Belgian and other parts of its European business will also be closed.
From being the first to develop cruelty-free cosmetics and sustainable development concepts, to becoming a smash hit with very avant-garde concepts and products, to changing hands three times and not hiding the decline in performance, and now facing bankruptcy and reorganization, as a benchmark in the field of pure beauty, why did The Body Shop "fall to this"?
Image from The Body Shop's official website.
And can a hot trend in China, which has been around for decades and is on the rise in China, have a longer story to tell?
Changed hands three times, from the peak to the fall
According to the official website of The Body Shop, the brand began in 1976 in Brighton, England, and was founded by Anita Roddick (Anita Roddick) with the concept of "business is a beautiful, positive driving force".
Image from The Body Shop's official website.
At that time, The Body Shop, with its advocacy and practice of leading concepts such as natural ingredients, environmental protection, and cruelty-free, as well as its active expression and support for public welfare activities related to community fairness** and women's rights, formed a completely different attitude towards beauty from other brands in the beauty industry, and attracted a large number of consumers with its unique avant-garde style.
In 1985, the brand, which was established less than ten years ago, was successfully listed, and after the listing, it soared to become one of the most well-known high street brands. Subsequently, its development territory continued to expand outward, until 2005, it had 2000+ stores around the world.
In 2006, The Body Shop was selected by L'Oréal for 9400 million euros of ** "into the bag", this is not only its highlight moment, but also its "turning point in fate". Although it is backed by international giants, The Body Shop has not ushered in the expected higher performance, but has continued to be sluggish. According to L'Oréal's financial report, the body shop's revenue in 2016 was 9200 million euros, a year-on-year increase of **48%, and has lost money for six consecutive quarters, making it the worst performing brand among L'Oréal's four business units.
In 2017, L'Oréal chose the "hot potato", and The Body Shop was selected by the Brazilian beauty group Natura &Co** acquisition for €1 billion. However, the "new owner" still failed to recover its development decline, coupled with the impact of the global epidemic, the body shop's revenue continued to decline, and continued to close stores, from 3000+ stores in 2017 all the way to 2300+ stores at the end of the third quarter of 2023.
In November 2023, the day after the disclosure of the latest group financial report at that time, Natura &CoJust take 20.7 billion pounds **, the body shop** was given to the international private equity group Aurelius Investment, compared to its original purchase**, the brand value of the body shop was greatly reduced, Natura &CoAlso lost nearly 7600 million euros.
And The Body Shop, which has changed hands three times, is still inevitably going "bankrupt". According to the Financial Times, a person close to Aurelius Investment revealed that at the time of the acquisition, The Body Shop had 2,500 stores in more than 70 countries, but some of the market businesses were not profitable. And, shortly after the acquisition was announced, Natura &CoThe Body Shop's revenue was much worse than expected during the key holiday period that still controlled the brand, and it continued to stick to heavily discounted transformation measures that hurt margins.
As mentioned earlier, the Body Shop's UK and German operations have now filed for receivership, and FRP, which handles the bankruptcy restructuring of the brand's UK operations, said that the brand's 199 stores and services in the UK will remain open.
While it's unclear where The Body Shop will ultimately go, it's clear that the fall of this benchmark in clean beauty is almost a foregone conclusion.
The advantages are no longer there, and it is difficult to return
Combing through the development history of The Body Shop, it is not difficult to find that its development from obscurity to glory, and then from the highlight to the bottom, is closely related to the development of its pure beauty concept.
In the era when the brand was founded, the concepts of pure beauty and vegan beauty did not appear at that time, and the concepts of natural ingredients, cruelty-free, non-animal testing, and environmental protection were extremely transformative and breakthrough, not only opening up a new track, but also taking the lead in corporate social responsibility and sustainable development with a pioneering attitude, giving the brand a very unique brand value.
Image from The Body Shop's official website.
The Body Shop, which has enjoyed the dividends of the "originator" of pure beauty, has quickly reached its peak under the pursuit of consumers, and it is understood that it once had more than 4,000 stores in more than 70 countries and regions around the world.
However, with the further development of the concepts of natural beauty, pure beauty and ESG sustainability, and the further deepening of consumer education, more and more entrants in this track, related more innovative and competitive concept trends and products are also becoming more and more popular, and the "uniqueness" of The Body Shop is gradually being replaced by latecomers.
For example, conceptually, there are organic beauty that emphasizes plant extraction, vegan beauty that focuses on the use of animal** ingredients, and pure beauty that is now recognized by more people as safe, non-toxic, free of harmful chemicals, transparent ingredients, and environmentally friendly.
In terms of participants, a number of raw material manufacturers have launched eco-friendly and sustainable pure raw materials, related brands have launched different concepts and products, international brands have either built or acquired clean beauty brands, and capital hot money has also poured into this track.
goop、drunk elephant、montagne jeunesse、e.l.f、hourglass、lush、aesop、orveda……More and more great brands are cutting the pie of the market that once belonged to The Body Shop.
In the era of drastic changes in the market environment, consumer trends and competitive landscape, the body shop's own accumulated problems have further exacerbated the difficult situation of the brand.
For example, there is no corresponding response strategy for market changes, and no more new stories and new concepts have emerged; The old-fashioned product innovation cannot attract the new generation of young consumers who have higher requirements for appearance and product functions; ** In the context of the rapid development of the channel and the reshaping of the global retail environment, it has not actively expanded into emerging channels, according to its former owner Natura &CoAccording to the 2023 semi-annual report, during the financial reporting period, The Body Shop's digital channel revenue accounted for only 12% of the total revenue, while the proportion of offline retail continued to increase to 81%.
In addition, in the Chinese market, where many major international brands are focusing on development, The Body Shop has not achieved breakthrough development.
On the one hand, its insistence on the concept of not using animals for testing conflicts with China's regulations requiring animal testing for imported ordinary cosmetics, which makes it unable to officially enter the Chinese mainland market for a long time. Although in May 2021, China's relevant regulatory regulations were adjusted, and imported ordinary cosmetics can be exempted from animal testing, The Body Shop has not carried out localized operations like other international brands, and only has a single channel for Tmall International's cross-border operation, and it is rare to see it in brand marketing, concept popularization, and consumer education.
On the other hand, during its absence of the Chinese market, the rapid rise of pure beauty concepts and brands in the local market, as well as the in-depth consumer education of national brands, made Chinese people more recognizable of national brands and domestic products. For example, a survey from Meixiu Big Data shows that consumers' recognition of domestic pure beauty brands is higher than that of European, American, Japanese and Korean brands in terms of ingredient safety, natural ingredients, environmentally friendly packaging, streamlined and efficient formulas, and no animal testing.
From the big data of beauty practice "Functional Pure Beauty Market Insights".
With a concept but no new story and no effective communication channels, the body shop's presence in the Chinese market is becoming weaker and weaker, and it is unable to make more new breakthroughs.
What is the prospect?
No matter what kind of endgame The Body Shop is heading towards, it is a wake-up call for the development of pure beauty, especially the pure beauty market in China.
As we all know, the concept of clean beauty has been around for a long time, and it has gradually become one of the important forces driving the global beauty industry as consumers pay more attention to product safety, efficacy and ecological sustainability. According to the "Clean Beauty Industry***", from 2020 to 2027, the global clean beauty market size is expected to grow at 1207% CAGR, from $5.4 billion to $11.6 billion.
The foreign pure beauty market started earlier, as early as the 70s of the last century, there was a "shadow" of pure beauty, and the development has now had mature technology and industry standards, with a detailed and specific definition of pure beauty, and related concepts have also been deeply rooted in the hearts of the people, and are particularly popular in the European and American markets.
However, in the Chinese market, it was not until 2011, when it was positioned as an organic care brand and is now a "Oriental Pure Skin Care" brand, that it officially brought pure beauty into the Chinese public's vision. Although it started late, it is developing rapidly, and the relevant technologies and regulations are gradually becoming standardized.
For example, in addition to Hua Wankou, there are also brands such as Light **, Yiyezi, Lanlan, and Shunyi have entered the pure beauty track. According to the data of the Beauty Industry Research Institute**, from 2021 to 2024, the compound annual growth rate of China's pure beauty market will reach 10%+, of which the compound annual growth rate of Tmall's pure beauty market will reach 18%+.
In addition, these leading brands have taken active actions in the industry green paper, the release of the industry, and the establishment of industry standards, bringing reference standards and norms for the operation of upstream, midstream and downstream enterprises in the industry. For example, the company released the world's first "Green Book of Pure Beauty", cooperated with the Guangdong Cosmetics Society and 14 industry research institutions to release China's first "Clean Beauty Group Standard", and took the lead in formulating the "General Principles of Pure Beauty in Cosmetics", which greatly filled the gap in the relevant norms and standards of pure beauty in China.
In terms of consumer characteristics, under the education of the more mature pure beauty market, foreign consumers pay more attention to the brand's friendliness to the environment, not to experiment on animals, and to have a sense of corporate social responsibility. In China, on the one hand, consumers do not have a comprehensive understanding of pure beauty, and on the other hand, they pay more attention to product efficacy and safety, while environmental friendliness, animal friendliness and sustainability are the "icing on the cake" in product functionality.
According to a survey from Meixiu Big Data, only two local consumers have a relatively good understanding or very good understanding of pure beauty, but four out of ten consumers are willing to know about pure beauty. In addition, the ingredients are natural, safe, non-toxic and harmless, and the formula is streamlined and efficient, which is the main perception of pure beauty by most local consumers. More than 80% of consumers care about the efficacy of products when choosing clean beauty. When it comes to the pain points of clean beauty products, it is difficult to distinguish whether it is a clean beauty product or not, and the gimmick is greater than the actual and the efficacy is insufficient, which is also the main concern of consumers.
From the big data of beauty practice "Functional Pure Beauty Market Insights".
Compared with foreign markets, China's clean beauty market is very different in terms of industrial development, maturity of regulations, and consumer characteristics. This also means that the development path or concept of an international clean beauty brand is not suitable for the Chinese market and consumers.
In fact, some local brands are also aware of these differences and are actively moving out of Chinese pure beauty. For example, the above-mentioned Flower Blossom Common took the lead in proposing the concept of "Oriental Pure Beauty", combining Chinese characteristic plant resources to independently develop and create Chinese functional ingredients to meet the dual needs of Chinese consumers for efficacy and purity.
In addition, it is still necessary to note that the concept of pure beauty is permeating all aspects of the industry, but relatively speaking, it is more concentrated in skin care, and there are fewer related practices in categories such as makeup and perfume. The main reason is that it is difficult to find ideal pure alternatives for many makeup ingredients for the time being, and once an ingredient in makeup is changed, the entire formula structure needs to be restructured, which is not only a challenge, but also an opportunity and entry point for brands exploring clean beauty.
In the future, with the deepening of the concepts of ESG sustainability, green environmental protection, and animal friendliness, and the further improvement of relevant laws and regulations, pure beauty is bound to release greater development potential, and brands that know how to follow the trend and adapt measures to local conditions can go further.