(BFM Bourse) – In the current context – and worldwide – of anti-racist demonstrations, L’Oréal announced Saturday that it would remove certain words – “white”, “whitening”, “clear” – from the description of its cosmetic products on its packaging. The decision caused an uproar, many Internet users calling for a boycott of the brand, deemed “racialist”. If the group is now trying to clear the controversy, the title ebbed Monday morning on the stock market.
An expert in epidermal reactions, L’Oréal had probably not seen it coming. Its announcement, late Saturday morning, the withdrawal of the words “white”, “whitening”, “clear” or “lightening” from the packaging of its products intended to standardize the complexion of the skin, in a global context of anti demonstrations -racists following the death of George Floyd killed by a police officer, is indeed clearly not to everyone’s taste and caused the conflagration of social networks.
In fact, shortly after this announcement, a brand boycott campaign via #BoycottLoreal (on Twitter) was launched. The social media monitoring tool Visibrain observes that “the recent news around the L’Oréal group has generated 157,835 tweets (since the announcement, Editor’s note), or 9 times more messages than normal. Among these messages, 72,195 call directly for a boycott of the brand “.
Sunday morning, the hashtag even ranked at the top of the “trending topics”, that is to say the most commented subjects on the social network. Many internet users have thus expressed their misunderstanding and especially their dissatisfaction, explaining that they would no longer buy any product of the brand. Communication consultant at Apco Worldwide, Fabrice Pelosi counted “55,000 tweets with #JarreteLoreal, which is still significant because if we compare it to the big subject of the weekend, municipal elections, that represents about 30% of the volume of tweets “.
The announcement reacted to certain political leaders, such as Marine Le Pen who judged “very disappointing” that the French group L’Oréal followed “racialist demands”. “If this French flagship makes its customers weigh the shame of their skin color in the name of this delusional ideology, I ask all the refractory Gauls to stop L’Oréal” said ex-minister Philippe de Villiers.
L’Oréal is now trying to put an end to the controversy
The decision of the French cosmetics giant does not apply to France, but only to Asia, where “skincare products whose function is to standardize the skin, protect from UV rays and reduce stains brunettes are traditionally designated by the name “whitening” “, recalls a L’Oréal executive interviewed by Le Figaro, which specifies that these ranges are the most popular with Chinese and Indian customers. L’Oréal does not intend to remove these products from the shelves, the cosmetic change only concerning “communication campaigns and packaging”.
“We have, it seems, misunderstood things,” nevertheless recognizes the leader at Figaro, this ensuring that this development “engaged for long months” has nothing to do with the runaway brands react (the announcement of L’Oréal came just after that of another giant in the sector, Unilever, which has chosen to rename the lightening cream “Fair & Lovely” from its Indian subsidiary – criticized to promote negative stereotypes around dark skin tones (after two separate petitions signed by more than 18,000 people asked the group to stop its production “You mustn’t mix things that have nothing to do with it and this amalgam is completely ridiculous” he concluded. Previously, the American giant “Johnson & Johnson” had decided to go further, by prohibiting the sale of lightening substances designed for Asia and the Middle East.
The outcry provoked on social networks however seems to go away by itself, as Fabrice Pelosi observes: “At the height of the” bad buzz “, there were around 3,400 tweets per hour with #JarreteLoreal against 250″ only ” Monday morning”. The expert in strategic communication considers that it is certainly a “bad communication timing which makes pass a long-term marketing evolution for reactive communication”, but that this will only have one “very limited impact on business”. Especially since the controversy remained contained in France while this change concerns the Asia-Pacific zone, “which has become the first geographic zone for L’Oréal in terms of income in 2019”, he underlines.
All over the world, brands have been under pressure since the death of George Floyd, Facebook (-8% on Wall Street Friday), Twitter and Instagram being notably the target of the #StopHateForProfit campaign for their laxity regarding the publication of content hateful or racist. Unilever, Patagonia, Verizon and Cola-Cola have announced in recent days that they will suspend their advertising on its platforms. To preserve their image, the big brands have no choice but to act. Like Apple, which launched a $ 100 million “racial equity and justice” initiative, or PepsiCo, which announced a $ 400 million, 5-year plan “to support communities.” and increase their representation “within the group. Even if it means sometimes being accused of opportunism.
L’Oréal’s approach does not, however, seem to be urgent, according to the manager interviewed by Le Figaro which underlines that the group “constantly adapts the name of its ranges, advertisements and product promises”. “In India and Asia, we have been observing a societal movement for several months,” he says, adding that the new generations of consumers are less comfortable with the name “whitening” “.
Strong recovery in post-containment cosmetics purchases
If the group has been in turmoil since this weekend, it had achieved a particularly solid start to the exercise in a degraded context. Through the voice of its chief executive officer Jean-Paul Agon questioned by Reuters last Thursday, L’Oréal had also announced that purchases of cosmetics had gone up sharply since the gradual lifting of containment measures. After having observed this phenomenon in April in China, the group whose range ranges from Maybelline make-up to Lancôme skincare has noticed a similar rebound in other countries, notably in Europe. “Things are going as we had anticipated. I have always said that so far this crisis has been for us more a supply crisis rather than a demand crisis,” said the leader.
In the first three months of the year, L’Oréal also managed to limit breakage, recording only a 4.8% drop in sales in published data. The second capitalization of the CAC 40 (158 billion euros) behind LVMH had thus outperformed both the global cosmetics market, down 8.0% over the period, and its own estimates which forecast a decline of 5% .
In this context, and after a good progression on Friday (+ 1.46%), the title of the cosmetics giant recorded this Monday around 1:15 p.m. a rather limited decline at 0.88% to 282.6 euros, while the CAC 40 progresses 0.28% at the same time. A decline which therefore seems both linked to profit taking and the “bad buzz” on lightening products. Since January 1, the L’Oréal share has slightly reduced its gain but still posts one of the best stock market performances of the flagship index: + 7% all the same, when the CAC dropped nearly 18% over the same period .
Quentin Soubranne – ©2020 BFM Bourse
