Back to the beauty business. Globally the beauty market is growing at a tremendous clip — 5.5% last year, the fastest rate in two decades — and, far from being disintermediated, big beauty brands have, in fact, been boosted by digital. Kylie Jenner built that business on Instagram.
Ordinary investors should consider L’Oréal shares. L’Oréal’s eight biggest brands together grew 8.4%, which, again, is the best growth in two decades. Barriers to entry are now lower so it’s easier for people to start small beauty brands, but it is still difficult for them to scale up, and there is a rapid churn. In a fragmented world, consumers still seek out trusted names, and digital algorithms, blogs, reviews, and influencers can increase big-brand exposure as never before. Oh, and don’t forget to buy Facebook shares. It owns Instagram, remember?
• Theron is CEO of asset manager Vestact.