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How L'Oréal is Going to Take More Market Share Through 2020

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L'Oréal's e-commerce sales rose 33% in the first half of the year, now accounting for some 6% of total sales.

While there are clearly advantages to being a smaller, nimble brand, a new analysis shows that multinational beauty companies have an edge in growth, both in mature and emerging markets.

The analysis from MarketLine notes that L'Oréal's scale in Europe and the United States has given it a significant chunk of the global makeup market, which was valued at $43.6 billion in 2015.

L'Oréal recenlty boosted its offerings by acquiring IT Cosmetics and purchasing the Société des Thermes de Saint-Gervais-les-Bains and Saint-Gervais Mont-Blanc license.

"L'Oréal's mass-market brands means it can continue to thrive despite the threat of private labels..."

Because the U.S. and European markets combined comprise 27% of the total market revenues, this gives L'Oréal an edge over even a massive player such as Estée Lauder Companies, the report explains.

L'Oréal's scale allows it to sell products with added benefits (anti-aging, skin repair, etc.) at an affordable price. This has allowed it to take possession of about 20% of the global market, according to MarketLine.

In fact, L'Oréal is the top brand in Asia and owns more than 31% of the Chinese makeup market. Its value/benefit advantage positions it well for capturing the region's rising middle class.

Simultaneously, mature market consumers have become price-conscious, so cost efficiencies make L'Oréal a strong player there as well.

As the report notes, "With consumers in traditional markets becoming increasingly price-conscious, the pricing of L'Oréal's mass-market brands means it can continue to thrive despite the threat of private labels like Superdrug's Zoella Beauty line."

With these trends in place, it is possible that L'Oréal will take even more market share through 2020.