Total ecommerce spending in the United States on cosmetics and skincare last year added up to $14.5 billion. Of the 116 million people that made beauty purchases online, 6.3 million were from Los Angeles, Riverside and Orange counties, up 27% compared to 2019.
Local buyers collectively spent $917 million in 2020, or 32% more than in 2019, according to Rakuten Advertising, a San Mateo-based market researcher.
On the brick-and-mortar side, the U.S. prestige beauty industry generated $16.1 billion in sales last year, a 16% dip compared to 2019, according to the NPD Group Inc. in Port Washington, NY.
Skincare and cosmetics companies based in L.A. County accounted for a considerable share of the beauty market, posting more than $4 billion in total sales last year, based on Business Journal estimates.
L.A. County-based beauty brands include several household names, as well as up-and-coming digital natives. Most of the businesses have taken investments from private equity firms or are still owned by their founders.
The group includes Playa Vista-based Honest Co.; Counter Brands, doing business as Beautycounter, in Santa Monica; and Anastasia Beverly Hills, whose founder Anastasia Soare started out as an aesthetician and opened a brow studio in Beverly Hills in 1997.
Soare in 2018 sold a minority stake in the business to Texas-based TPG Capital, which valued the company at about $2.5 billion.
Honest Co.’s next step will likely be going public, according to industry sources. Some local companies — such as Guthy-Renker in El Segundo, American International Industries in Commerce and Markwins Beauty Brands Inc. in City of Industry — also focus on nail and hair care or fragrance products.
AII, founded by Zvi Ryzman in 1971, has 41 brands under its umbrella, including 11 dedicated to skincare. Guthy-Renker, meanwhile, markets cosmetic lines endorsed by celebrities, such as Meaningful Beauty by model Cindy Crawford, JLo Beauty from singer and actress Jennifer Lopez and Principal Secret by actress Victoria Principal.
A half-dozen skincare and cosmetics companies whose roots can be traced back to L.A. County are now part of major conglomerates. Four brands — Dermalogica, Hourglass Cosmetics, Kate Somerville Skincare and Murad — are owned by London-based Unilever Prestige.
Kate Somerville and Dermalogica came into the fold in 2015, the latter generating $240 million in revenue prior to the acquisition. Murad joined the mix in 2015, after posting $115 million in sales for 2014.
Hourglass, acquired in 2017, piqued Unilever’s interest for its “high growth rates, driven by social media content, channel diversity and democratization of professional makeup techniques,” the company said at the time.
Johnson & Johnson acquired Westchester-based Neutrogena in 1994 for $924 million, and NYX Professional Makeup founder Toni Ko in 2014 sold the El Segundo-based brand to L’Oréal for $500 million.
Neutrogena, which sells more than 650 products in the face, body, acne, sun protection, makeup, men’s care and anti-wrinkle categories, this month added sisters Chloe and Halle Bailey — known widely as Grammy-nominated duo Chloe x Halle — to its roster of brand ambassadors.
“As Neutrogena aims to put the power of skin health
A majority of cosmetics and skincare brands that have sprouted up in L.A. County in the last decade are focusing on clean beauty and nontoxic ingredients. Driven by the rise of social shopping, they include West Hollywood-based Offspring Beauty Co., doing business as Versed and Kosas Cosmetics in Westwood.
Others promote inclusive beauty products that cater to a variety of skin tones, such as Westchester-based Uoma Beauty Inc.’s 51 shades of foundation.
Youth to the People, meanwhile, works with “consciously sourced, nutrient-dense premium superfood blends and pairs them with clinical, pro-grade vegan actives, all made in California,” according to the company, which was founded in 2015 by cousins Joe Cloyes and Greg Gonzalez.
With clinics closed and elective surgeries on hold, most of the skincare industry’s growth last year stemmed from products such as body creams, lotions, exfoliators, cleansers, serums and devices, according to NDP Group.
Makeup remained the largest beauty category for 2020, though the sales were down 34%.
Online sales “grew across all categories as brick-and-mortar drove declines, (but) the latter still remains beauty’s largest sales channel and a key factor in its recovery,” NPD’s beauty industry adviser Larissa Jensen said in a statement. “Leveraging the strength of each channel, recognizing the opportunities of the changed beauty consumer, and owning this transformation are important action items for retailers, brands, and manufacturers as we enter the recovery phase.”