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The World’s Next Beauty Capital

Question: How are western beauty brands expanding into the \r\ndeveloping world? 

Geoffrey Jones:
As Russia and China\r\n and now India really opened up to global capitalism, to foreign firms, \r\nthe very first reaction of consumers was a great hunger for western \r\nbrands. Local products, if they were made at all were poor quality, \r\ndangerous, and absolutely lacking in aspirational value whatsoever. So, \r\nthese new markets, these so-called "BRICs," have proved incredibly \r\nattractive to beauty companies and have grown incredibly quickly. China \r\nin 1980 didn’t have a beauty industry. Mao Tse-Tung had abolished it, as\r\n a matter of fact; it was regarded as a sign of bourgeois decadence. \r\nIt’s now the fourth beauty market in the world. Let’s see, it’s the \r\nthird biggest, Russia is eighth biggest. 

So all of these markets\r\n have seen this in-pouring of western brands. The interesting thing is \r\nthat over time we’ve seen, particularly in the case of China, growing \r\nconfidence among consumers in traditional beauty ideals and practices, \r\nand this has increasingly obliged companies to consider and implement \r\nwhat we call local customization of various kinds. 

So, in China \r\ntoday, there’s a huge demand for local ingredients, you know, ginseng \r\nskin cream, or whatever. And so even if a brand is a global brand, like \r\nOlay, or L’Oreal Paris, actually the ingredients often reflect a sort of\r\n local content. But it’s more than that. Companies have shifted, again \r\nin China in particular, from using western models—which a brand like \r\nL’Oreal Paris always did—to using local models. But it’s more than this,\r\n because they increasingly, or no pretty much always use local \r\nphotographers, local agencies to do all the shots because they are very,\r\n very anxious to capture local feelings. 

So, we live in a, I \r\nthink, in an interesting period where globalization and tribalization \r\nare sort of dramatically interacting in the global industry. And I think\r\n nobody is quite sure about the exact balance and consumers are kind of \r\nsaying different things. They’re saying, "Yeah, we want these fabulous \r\nParis and New York brands because they are aspirational." But they are \r\nalso saying, "We want them to be locally relevant."

Question:\r\n Will Paris and New York continue to be considered global centers for \r\nbeauty? 

Geoffrey Jones: If we go back again to the \r\nearly 19th century, no one place was associated with being especially \r\nbeautiful. If you look at the perfume industry, which some would regard \r\nis at the center of the industry, Britain was a bigger producer of \r\nfragrance and perfume for much of the first half of the 19th century; \r\nbigger than France. But, by the middle of the 19th century, in Paris you\r\n have the development of fashion, of Paris as a kind of a spectacle with\r\n the rebuilding of the city with wide boulevards. And the growth of the \r\nperfume industry becomes closely associated with this cluster of \r\nfashionable and luxurious industries. 

So by the end of the 19th \r\ncentury, Paris is regarded as THE benchmark of all that’s chic and \r\nfashionable throughout the world. And fragrances and the beauty industry\r\n is part of that. And this process is self-reinforcing. Certainly the \r\nbenchmark of aspiration is self-reinforcing, but because Paris is so \r\naspirational, so talented entrepreneurs, artists, and other people, the \r\nsuppliers of the beauty industry all cluster around Paris as well. So \r\nyou both have a... what economists would call a agglomeration effect and\r\n reputation effects. And that proves incredibly strong and persistent \r\nthroughout the next century. Paris is a symbol of chicness and style and\r\n aspiration and femininity. 

New York is a slightly different \r\nstory. By the early 20th century, the United States is the world’s \r\nbiggest economy, the world’s richest economy; New York is the major \r\ncommercial center. Entrepreneurs and others are attracted to New York. \r\nIt’s a giant port for which ingredients of the industry come in. And so \r\nit starts to develop, again, a cluster of entrepreneurs. But then the \r\ngrowth of Hollywood, of the American film industry, to which New York is\r\n quite closely tied as the center of finance and the center of a lot of \r\ntalent I think is really important in taking the division of America \r\naround the world. 

And then in the inter-war years, and after-war\r\n years, a group of entrepreneurs like Elizabeth Arden, Helena \r\nRubenstein, Estée Lauder develop expensive luxury brands of cosmetics, \r\nskin care, and fragrances which provide also New York and the United \r\nStates with a range of not only mass brands, but also prestigious \r\nbrands. And so New York and the United States come to represent a \r\ndifferent vision of beauty. It’s a vision that’s more accessible, more \r\ndemocratic view of beauty, less complex, less chic, more hip, more \r\nexciting. Just like New York itself. 

And it’s an interesting \r\nquestion why these two cities have continued that role. It’s partly \r\nbecause there is so much talent clustered if you reach a certain role, a\r\n certain size. But it’s also about the cities themselves. Both cities \r\nhave emotional associations in people’s heads; Paris of cafés and the \r\nLeft Bank, New York of skyscrapers and energy. And those images, the \r\ncities today are – you could say the cities today are still having those\r\n features. So, there’s no disconnect between people’s imaginations of \r\nthose cities and those cities today even though they are two of the most\r\n fast-changing, cosmopolitan, evolving cities you could want in the \r\nworld. 

So I think the brand image of those cities, which is very\r\n important in the beauty industry, is persistent and realistic. You can \r\nget on a plane, go to those cities and you actually see what you imagine\r\n it to be. 

Now, it’s a very interesting question if other cities\r\n can catch up, and I thought about that quite a lot. For example, Milan,\r\n after the Second World War, develops as a major global fashion center, \r\nbut it doesn’t develop as a beauty capital. London has always been on \r\nthe fringes of the beauty industry and at various times has become hip \r\nand exciting. The 1960’s swinging London, The Beatles, Twiggy, all the \r\nrest of it, but never quite sort of made it as a beauty capital. 

Now\r\n one can think of Tokyo, or Shanghai, or Rio as potentials. 

Recorded\r\n on April 21, 2010

Will Paris and New York continue to be the standard-bearing cities of global fashion?

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