Aiming to widen the reach and broaden the product range of Kylie Cosmetics and Kylie Skin, Coty, a global cosmetic brand, will buy a 51 per cent majority stake in social media mogul Kylie Jenner's brand.
Kylie's brand equity and wide reach among Generation Z are some of the main reasons for the USD 600 million price tag for Coty Cosmetics. According to reports, the partnership is expected to close in the third fiscal quarter of 2020.
Here's why Coty has decided on this expensive partnership:
Kylie brand equity: The youngest of the Kardashian clan is a megabrand worth USD 1.2 billion with as many as 270 million followers. If you didn't know how big that is, the population of the third most populous country in the world (the United States) is around 329 million.
Her Instagram page is the second most followed account, adding up to 6000 followers daily. Forbes magazine hailed her as the youngest self-made billionaire early this year. When her famous lip kits launched in Ulta stores (makeup stores in the US, like Sephora), they were gone in hours -- a situation similar to when her website crashed.
Potential of brand categorization: Products of her relatively new brand Kylie Skin sold out online in as little as 10 hours. After starting out with just a lip kit in November 2015, the brand introduced limited edition festive makeup sets that included eye shadow palettes, blush palettes, lip kits, highlighters, and now a whole new skincare brand.
Coty hopes to cash in on the trust of millions of her followers to diversify the product range in makeup, fragrance and skincare.
Why would the two brands come together?
As Coty is a global brand, with means of manufacturing, supply chain and logistics already spread out across the globe in Russia, China and Western Europe besides parts of the US, Kylie Cosmetics will finally be available to fans outside the US.
This will help Kylie Cosmetics and Coty capitalise on the latter's R&D, supply chain and logistics facilities around the world to cater to a more global audience. More than half of Kylie's followers online are from outside the US, according to Coty.
One thing people can be apprehensive about is whether attaching themselves to a celebrity brand would render long term benefits since her brand is sometimes referred to as a fad in the media and by other beauty influencers.
Whether the brand will just pass by as a Gen Z fad in the coming years, or if Indians may be able to walk into a store to get a lip kit, only time will tell.