Amazon’s Play for Black Beauty Dollars
By Christopher Pitts
Amazon launched Belei a private skin care product line
African Americans spent $465M on skin care preparations product
E-commerce giant Amazon (AMZN +0.54%) charted new territory by entering into the billion dollar beauty industry with the launch of Belei, a new skin care product line. This move can give them a bigger stake with African Americans, as market research has shown they contribute millions of dollars to the overall spending in the beauty and skincare sector.
Why This Matters: Data from The NPD Group shows this could be a well calculated move for Amazon, as the U.S. beauty market brought in $5.6 billion for skin care products alone in 2018. When it comes to personal appearance products, Black shoppers made significant investments in grooming aids to the tune of $127 million and spent $465 million on skin care preparations products, according to Nielsen.
Amazon currently has 138 private labels, and it makes sense to expand because customers are moving toward these products, as they are low cost alternatives to national brands. Black consumer spending habits have a great impact on a company’s ability to generate revenue across several different industries. Thus, brands can't afford to lose favor with these consumers without a potential negative impact on their bottom line.
This exclusive Belei collection includes 12 products, each under the price of $40, including everything from retinol moisturizers to vitamin C serums. Of course brands like Sephora and Ulta (ULTA +1.85%) that sell similar products could be heavily impacted due to Amazon vast online reach.
Situational Awareness: Once again Amazon is diving deeper into the frenemy space as its Belei products perhaps threaten other brands currently sold on the platform. The company has continued to add its own private label brands, for things like clothing, shoes and mattresses that they give top placement on the website.
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