L'Oreal Expands NYX Brand with Affordable Fragrances for Gen Z Market
Expansion into Mass-Market Fragrances
By Alexander Marrow and Dominique Patton
VIENNA, June 29 (Reuters) - French cosmetics giant L'Oreal is expanding into mass-market mists, a senior executive told Reuters, as the group taps strong demand from younger consumers for affordable fragrances with an eye to K-Beauty trends.
Fragrance brand owners from Estee Lauder to Coty have been seeking to cash in on growing demand for scents from Gen Z shoppers, and L'Oreal, which already leads in luxury fragrances, has now rolled out new products under its NYX makeup brand to catch that trend.
Accessible and Fun Approach to Fragrance
"It's the first attempt to go to fragrance in a more accessible way, a more fun way," Fabrice Megarbane, president of L'Oreal's consumer products unit, told Reuters on the sidelines of the Consumer Goods Forum in Vienna.
The NYX hair and body mists, which cost around $15 for an 80-millilitre tube, are currently available in Europe and the U.S., and could be followed by other brands in L'Oreal's portfolio, said Megarbane, who runs the group's largest business unit, with sales of €16.09 billion last year.
Market Trends and Competitive Landscape
Mass-Market Perfume Sales Growing Faster Than Luxury Brands
L'Oreal CEO Nicolas Hieronimus is looking to accelerate growth at the group, launching a "beauty stimulus plan" last year to spur innovation after the Paris-based company posted its slowest growth rate in several years.
Gen Z Preferences and K-Beauty Influence
A wave of independent brands, particularly those from South Korea, are taking market share from established players with quality but affordable products with "good storytelling" that appeal to Gen Zs, said Clotilde Drape, associate director for beauty & personal care at Mintel.
And while L'Oreal is seeing double-digit growth in luxury fragrances, the market for mass-market perfume is growing even faster, according to research firm Circana, with U.S. retail sales up 15% in dollar terms last year, compared to 5% in the prestige category.
Challenges for Luxury Fragrances
Luxury fragrances have been one of the fastest-growing categories in the beauty market, but ever higher prices — which have seen the cost of a 50 ml bottle of Lancome's 'La Vie est Belle' reach £97 ($128) in London's Harrods — have curbed growth.
That has prompted several brands including L'Oreal's Lancome to offer cheaper 'mists'. Korean brands are "very big on mists", especially for hair, said Drape.
Performance and Consumer Response
New Line Selling Well on TikTok
L'Oreal's first offering in the mass market segment will undercut existing players, such as L'Occitane Group's Sol de Janeiro and PHLUR, on price.
The new bodycare range could also help to offset weak growth in makeup, NYX's core product, with makeup the softest-performing beauty category in the U.S. in the first quarter, according to Circana.
"I think for NYX, they went into this bodycare segment because makeup is stagnating at the moment. It's maybe a way to diversify the portfolio but still keep people engaged with the brand," said Drape.
Megarbane said the new line was selling particularly well on platforms like TikTok, highlighting the "huge appeal" from Gen Z for fragrance demand.
"NYX was the first one to go, but I'm sure it will not be the only one," he said.
($1 = 0.7557 pounds)
(Reporting by Alexander Marrow in Vienna and Dominique Patton in Paris; Editing by Jan Harvey)
