L’Oréal outpaces rivals with 12.3% growth via acquisitions, innovation doubles 2014 turnover

L’Oréal has maintained its dominance in the global beauty market despite disruptive competition from digital-native and celebrity-backed brands over the past decade. By leveraging strategic acquisitions, heavy investment in innovation, and a long-term ownership structure, the French cosmetics giant has outperformed the $450 billion industry, achieving nearly double its 2014 turnover of $47 billion and consistently outpacing rivals like Estée Lauder. The company’s success lies in its ability to adapt to evolving consumer demands while preserving the distinct identities of its 37 brands, which span mass-market, prestige, and dermatological skincare categories.

L’Oréal’s deputy CEO Barbara Lavernos emphasizes innovation as the core of its strategy. The company invested €1.3 billion in research and innovation in 2024—exceeding the combined budgets of its three largest competitors—while prioritizing hard science and AI-driven technologies. Examples include BETiq, a system optimizing marketing spend to improve ROI by 10–15%, and the use of 14.5-terabyte datasets to create digital twins for curly and Afro-textured hair, accelerating product development. These efforts resulted in 3,636 new formulas launched in 2024 alone. L’Oréal’s focus on science and technology is rooted in its 116-year history, with 4,200 global researchers dedicated to innovations like reconstructed human skin for ethical testing.

Strategic acquisitions since 2014, including NYX, CeraVe, and Dr. G, have allowed L’Oréal to tap into emerging trends like Korean beauty without subsuming the acquired brands’ identities. Analysts note that these partnerships leverage L’Oréal’s global supply chain and marketing expertise while allowing smaller brands to scale. For instance, Dr. G’s integration provided access to the booming Korean beauty market, while Medik8’s 2024 majority acquisition by L’Oréal highlights collaborative R&D opportunities. The company’s licensing deals with luxury brands such as Prada and Armani further amplify its reach, contributing to the Luxe division’s global prestige beauty leadership.

L’Oréal’s diverse portfolio mitigates risks from market-specific downturns, such as China’s slower growth for global brands. Its strength in both mass and prestige segments ensures stability: when mass-market sales dip, prestige customers often trade down. Geographic diversification also drives growth, with like-for-like sales rising 12.3% in Africa and Asia (excluding China, Japan, and Korea) in 2024. Analyst Fon Udomsilpa credits L’Oréal’s ability to identify and capitalize on trends, like its leadership in face masks—a category originating from Korean beauty.

Family ownership and a long-term vision underpin L’Oréal’s resilience. The company is majority-owned by the Bettencourt Meyers family and Nestlé, enabling sustained investment in R&D and M&A. Lavernos describes this structure as “the best of both worlds,” combining the agility of family governance with the discipline of public markets. This approach ensures consistency in strategy, with CEO Nicolas Hieronimus emphasizing a culture of “healthy concern” to stay ahead of disruptive innovations.

Despite challenges in U.S. mass-market makeup and evolving consumer demographics, L’Oréal remains confident. Its 2024 “beauty stimulus” plan includes intensified product launches targeting Gen Z and social media users. Lavernos attributes the company’s success to its “confrontational spirit,” where competition drives internal innovation. By staying agile and prioritizing long-term value, L’Oréal aims to maintain its leadership in a rapidly changing industry.

Source: [1] [“Whenever we see a small company with a good idea, we’re on fire”: How M&A and innovation keep L’Oréal ahead in global beauty] [https://fortune.com/europe/2025/07/24/m-a-innovation-loreal-global-beauty-health-science-barbara-lavernos/]