Ultraluxe skincare brands are beginning to feel the slip of the Lipstick Index.
Cosmetics are usually more resilient than fashion or jewellery, but they haven’t been immune to the greater luxury downturn. Even top spenders have not protected brands from slowdowns, and markets that drove growth three years ago — especially China — have shifted dramatically.
Swiss luxury skincare brand La Prairie, once a major growth engine for owner Beiersdorf, illustrated that volatility. “Between 2018 and 2019, China likely accounted for roughly two-thirds of La Prairie’s sales growth,” said Celine Pannuti, Head of European Staples & Beverages at JP Morgan. Then Covid hit, travel retail collapsed, and demand softened. The brand saw three consecutive years of decline before stabilising in 2024.
Now under new chief executive Estelle Létang, La Prairie entered a renewal phase — modernising its image, emphasising transparency around science and softening its rarefied retail environments. “Heritage is not about looking back with nostalgia, it’s about giving meaning and credibility to the future,” Létang told The Business of Beauty in an e-mail.
Heritage can only take a brand so far. Luxury skincare has to adapt to new geographies, new experiences and new customers, casting a wider net than ever before. “In the case of beauty, luxury brands need entry-level access points that invite aspirational buyers,” Pannuti added.
Augustinus Bader’s chief executive Charles Rosier echoed that sentiment. “Our DNA isn’t to cater only to the one percent — we want aspirational consumers who believe in results.”
Asia’s Limited Appetite
One tried-and-true strategy for accessing new, young consumers is already off the table for luxury beauty brands: Discounting.
“Discounted e-commerce undermines trust,” said Celine Talabaza, the CEO of Noble Panacea. 30 single-serving sachets of the brand’s The Absolute Intense Renewal System sell for about $547. “The goal isn’t to democratise luxury entirely, but to expand reach without eroding the exclusivity that makes it desirable in the first place.”
Feedback for new launches like Augustinus Bader’s Elixir serum ($580) have been “surprisingly positive,” Rosier said. Especially in markets like China, where the brand is a newer entry, it is thriving precisely because of its novelty factor.
For brands with longstanding footholds in Asia — and strong comparison bases as a consequence thereof — achieving growth is trickier. South Korea and Japan continue to over-index on products above $200, naturally skewing toward the luxury end of the market, but local competition is fierce and macroeconomic factors like a weak Japanese yen have dampened inland spending for luxury goods.
Pannuti warns about continued dependence on Asia. “Brands relying too heavily on APAC have to manage fluctuations and regulatory uncertainty,” she said. “Travel retail disruptions, price volatility, and changing consumer expectations can quickly impact sales.”
One way brands can fend off these headwinds is by investing in experiences, which for skincare means treatments. “Upper-end consumers continue to highly value tactile, in-person experiences,” said Magali Leroux Parksuwan, La Mer’s Senior Vice President and Global General Manager, especially in the APAC region. “The Asian customer integrates professional treatments into their beauty routines, which is why those in-store beauty services are so important.”
The rise of medical aesthetic treatments, including everything from injectables to chemical peels, has outpaced traditional skincare. In order for luxury brands to compete with Botox or Hydrafacial — whose price points are comparable to $600 moisturiser but offer instant results — they need to convince their customers of the efficacy of their products, and fast.
Proof Over Promise
Despite doubling down on what Asian and, in particular, Chinese consumers value, geographic diversification will become increasingly important for high-end skincare – as all luxury categories learned the hard way post Covid.
“We see considerable untapped potential in Europe and in North America where we already have strong distribution but room for much deeper growth,” said La Prairie’s Létang, noting that India is also a growing market for the brand, which launched in the country exclusively through Nykaa in Sept.
The European ultra-luxury skincare market remains smaller as a whole, shaped by cautious buyers who require stronger proof of value. Customers around the globe are becoming more discerning in their high price-point purchases, leading brands to demonstrate beyond a shadow of a doubt that they’re worth it.
“Consumers are increasingly shopping for ingredients and demonstrable results,” Pannuti said. “Science can’t just be marketing fluff anymore — it has to differentiate the product from derm-focused or medicated offerings.”
For years, luxe skincare players leaned on storytelling and mystique without necessarily having to divulge the nitty-gritty behind their formulae. La Mer’s “Miracle Broth”, La Prairie’s caviar extracts and Augustinus Bader’s stem cell research sound impressive, but need to back themselves with thorough, communicable evidence. The era of blind faith is over — especially for Gen-Z. La Mer has given scientific messaging a more prominent position by creating a social-first content series where in-house experts and research collaborators in lab coats explain the science behind the Miracle Broth. The fast-paced reels feature shots from laboratories, syringes and all, as well as aesthetic clips of various oceanic elements.
To drive growth, these brands have to master a delicate balancing act. “The brands that demonstrated real efficacy —- while maintaining aspiration —– will win,” Pannuti said.
Or, as Parksuwon put it, “both romance and receipts.”
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