Amazon recently unveiled a debut collection of makeup products under its private label “find,” which also sells apparel basics. Available only from Amazon’s UK site for now, the products—for the eyes, brows, face, lips, and nails—are sold in “bundles” rather than individually. All are Prime eligible and priced under $20, comparable to drugstore offerings.
Historically, an announcement from Amazon that it’s expanding into a new market has caused fear and anxiety: In 2017, grocery chains lost nearly $12 billion in market capitalization in a single day after Amazon said it would lower prices at Whole Foods. Last year, Amazon shared its vision for an independent healthcare service, causing the market value of the 10 largest listed health-insurance and pharmacy stocks to fall by a combined $30 billion in a few hours.
Seven major conglomerates control the beauty industry and nearly 200 of its brands. So far, Amazon’s quiet move onto their turf hasn’t set off alarm bells. That said, the company has successfully disrupted everything from books to furniture without much fanfare, and an unassuming move into the beauty space could signal the beginning of a more aggressive campaign. Indeed, Amazon’s private-label business (which includes over 80 of its own brands) is expanding at the expense of big brands, and is on track to generate $25 billion by 2022.
Amazon is also already a premier destination for cosmetic products. In 2016, A.T. Kearney surveyed American women who shop online for beauty products. It found that 69% searched for and purchased beauty and personal products on Amazon, beating out Sephora (41%) and Ulta (37%). What’s more, beauty and personal care products are the second-most-shopped categories on Amazon. A report from One Click Retail showed that sales of health and personal care items on the platform totaled $1.9 billion in the second quarter of 2018 (a 23% increase from a year earlier), while sales for beauty products were up 26% at $950 million.
The e-commerce behemoth is already a major beauty channel. It boasts three differentiated categories on its site: luxury beauty, where it sells prestige brands you’d find at a department store (this category ballooned 57% in the second quarter of last year, per One Click); professional beauty, with products you’d find in salons and spas; and indie beauty, which sells independently owned brands not found at retailers like Target, Sephora, or Ulta. More