L’Oréal is the world’s most valuable beauty brand. Here is its story.
L’Oréal was founded in 1909 by Eugène Schueller, an innovative French chemist and ambitious entrepreneur
Women have been colouring their hair since ancient times. Egyptians used henna to turn their grey hair to red. The Greeks and Romans used saffron, gold dust, blended flowers and other plant and animal products to embellish their hair with various colour tints. The combinations used were natural but the results were short-lived. Chemicals would soon enter common practice: lead for dark-coloured hair and sulfuric acid for light-coloured hair. They produced better results but they were dangerous to the health of people using them and often even lethal.
Everything changed when French chemist and pharmacist Eugène Schueller invented the first synthetic risk-free hair dye for women in 1907. He used para-phenylenediamine (PPD), a chemical discovered in the previous century and named his innovation “Oréal.”
Two years later, he founded the Société Française de Teintures Inoffensives pour Cheveux (the “French Company of Inoffensive Hair Dyes”), the company that was to become the L’Oréal Group.
Eugène Schueller set out to conquer the international market and established a network of sales reps around the globe. His innovative hair dyes were sold to hairdressers and later, pharmacies.
In the following years, he developed new products: Dop, the first modern shampoo without soap (1934) and Ambre Solaire, the first tanning oil containing a sun filter (1935).
Schueller’s success was powered by his ability to understand the needs and anticipate the expectations of customers. L’Oréal revolutionized the market for women’s hair dyes allowing women greater opportunities for self-expression. Today 75% of American women and 60% of European women dye their hair compared to only 7% in the 1950s.
Schueller understood early on that technology-driven innovation was the answer to solving customers’ needs effectively and efficiently. Being the first helped build the L’Oréal brand and establish a strong relationship with the customers.
“Schueller was a man of action and a creative spirit. He was the first to build a beauty industry on a bedrock of science. For half a century, he lay the groundwork for a company that would offer unparalleled quality and safety innovations to meet the full range of beauty needs and trends. That credo holds true today: L’Oréal has gone from strength for more than 110 years and continues to cement its position as the global leader in the beauty industry.”
2021 L’Oréal Company Statistics & Financials
- Founded 114 years ago
- 4 product categories: skincare, haircare & hair colour, makeup, fragrance
- portfolio of 35 international brands (Yves Saint Laurent, Biotherm, Garnier, Maybelline, Cacharel, Armani, Lancome, Kerastase, Vichy, La Roche Posay and more)
- 85,400 employees worldwide
- 20 research centres across 11 countries around the world
- Research and Innovation team of over 4,000 scientists and 3,000 tech professionals
- Research & innovation investment: 1 billion euros (3.2% of 2021 sales)
- Generated sales: 32.28 billion euros
- 27% of L’Oréal’s sales are generated by e-commerce
- Operating profit: 5,2 billion euros (19% of sales)
- Gross profit: 23 billion euros
- Advertising & Promotion investment: 10 billion euros (32% of 2021 sales)
- L’Oréal’s annual growth (16%) is 3x higher than the average annual growth of the global beauty market (4%-5%)
- L’Oréal’s share of the global beauty market: 14%
- L’Oréal’s most profitable division is L’Oréal’s Luxury (12 billion euros); its fastest-growing division is Active Cosmetics (+30%) comprised of La Roche Posay, Vichy, CeraVe, SkinCeuticals, Decleor
- L’Oréal’s most profitable market is Europe (10 billion euros); its fastest-growing market is Latin America (+20%)
L’Oréal – A Beauty Tech Powerhouse
L’Oréal is a science-driven beauty brand innovating through products since its founding in 1909.
The amazing advancements in machine learning and Artificial Intelligence over the past decade have found practical applications in many industries including IT, computers, e-commerce, aviation, telecommunications, healthcare …and last, but not least – beauty.
‘Seize new opportunities’ is a motto L’Oréal lives by and strongly believes in. The beauty powerhouse saw how these new technologies are changing the world and they have quickly included them in the brand’s product development and business growth strategy.
In only 5 years, L’Oréal has become a true tech powerhouse in the service of beauty for all, personalized and sustainable.
L’Oréal’s latest innovations have received numerous awards at CES and have been included in TIME’s Best Inventions list
YSL Scent-Sation, the First In-store experience leveraging neuroscience to provide personalized fragrance advice (2021)
A system where a neuro-connected headset that uses EEG (electroencephalography) for the first time in the beauty industry captures 5 different feel-good emotions triggered by 14 different accords, representing 27 YSL fragrances. And then translates them into a unique, personalized selection of 3 YSL scents.
YSL Rouge Sur Mesure: Personalized Lipstick, a beauty tech innovation by Perso (2020)
2020 TIME’s Best Inventions
With this smart device, home consumers can create their very own versions of the iconic YSL’s iconic Velvet Cream Matte Finish lipstick. The lid of the device functions as a compact luxury case, so you can take your personalized product along with you when you go out.
Colorsonic, reinventing the consumer hair colouring experience through user-design breakthroughs at home and in the salon
2022 TIME’s Best Inventions
CES® 2022 Innovation Awards Honoree
Colorsonic is a lightweight, handheld device that uses an innovative, mess-free process to mix hair colour and apply it evenly, delivering consistent hair colour results for consumers at home.
HAPTA, the first handheld, ultra-precise computerized makeup applicator designed to advance the beauty needs of people with limited hand and arm mobility
CES® 2023 innovation award-winner
L’Oréal Brow Magic, a first-of-its-kind smart eyebrow makeup applicator that gives users bespoke brows for their face shape in seconds
CES® 2023 Innovation Award-Winner
L’Oréal Water Saver, a groundbreaking showerhead that uses rocket engine technology to reduce water consumption by 61% compared to standard methods
2021 TIME Best Inventions
Designed for the professional salon industry, L’Oréal Water Saver has the potential to help save billions of litres of water annually.
UVMune 400, L’Oréal’s breakthrough sun filtering technology
After 10 years of research, L’Oréal introduces UVMune 400, its breakthrough sun filtering technology that effectively protects the skin against insidious ultra-long UVA rays.
L’Oréal’s current and future success lies in the brand’s strong investments in research & development and the company’s strategic acquisitions, investments and partnerships.
2021 – 2023 Acquisitions & Investments & Strategic Partnerships:
- Digital Village, a metaverse-as-a-service platform and NFT marketplace for brands, creators, and communities;
- Prinker Korea, a micro-printing startup whose temporary tattoo products have won multiple CES Best of Innovation awards and the prestigious global iF Design award;
- Microphyt, a biotech that has developed a revolutionary process with a low carbon impact to produce microalgae used in cosmetics, among other fields, for their active properties and functional qualities;
- Skinbetter Science, a physician-dispensed skincare brand backed by cutting-edge, dermatological science, combining patented efficacious ingredients with luxurious sensorial textures;
- SPARTY, a startup that has successfully created a D2C business model grounded in personalized beauty, with brands such as Medulla in haircare and Hotaru in skincare;
- Youth to the People, a skincare company that develops and markets high-performance skincare products known for formulas that combine premium vegan blends of superfood extracts and science;
- Verily, an Alphabet precision health company advancing skin health;
- Emotiv, a global neurotech leader that helped L’Oreal launch YSL Scent-Sation;
- BreezoMeter, a climate tech company uncovering insights around exposome and skin.
What are L’Oréal’s business strengths driving the brand further?
- Setting (and achieving) the goal of outperforming the market;
- High quality of teams and their extraordinary level of commitment;
- Investment in research and new technologies, like Artificial Intelligence;
- Portfolio of complementary brands enabling the company to meet all beauty expectations;
- Balanced geographic footprint;
- Strategic vision and shareholder stability (the founding family is the company’s main shareholder);
- Ability to seize new opportunities: the shift towards digital (virtual try-on, e-commerce), personalized product; recommendations. The next step in L’Oréal’s digital development may well be the metaverse;
- Agility: the company trained employees on digital, e-commerce, the internet, and high tech;
- Emerging countries represent a tremendous source of growth;
- A unique point of view on the business: financial performance and environmental and social performance are now inextricably linked (read The Story behind the Brand: Patagonia);
- Having a single line of business: L’Oréal focuses only on beauty but they cover all of beauty;
- Leveraging the power of data.
Source: L’Oréal websites