At the other end of the market, we’re expanding The Ordinary. It’s hugely successful domestically, particularly with younger consumers, but historically wasn’t widely available in travel retail. We’ve launched with a couple of European partners, seen extremely strong initial sales, and are expanding distribution. It was one of the most requested brands from our retail partners at the recent Tax Free World Exhibition in Cannes.
So there’s this interesting bifurcation: younger consumers looking for accessible brands, and then these very expensive, artisanal fragrance brands are doing incredibly well.
Where do you see the biggest opportunities for growth?
China remains incredibly important. We’re seeing increasingly good numbers from Hainan and have just opened a new distribution center there. But we’re diversifying so we’re never overly reliant on one brand, consumer, or channel.
Japan has been one of the fastest-growing duty-free markets over the past five years, helped by tourism. In South Korea, we’re seeing strong retail growth again at Incheon Airport, although downtown duty-free is recovering more slowly.
The West is a significant opportunity because we’ve historically had lower market share and haven’t deployed our full fragrance portfolio. We’re expanding across Central Europe, the Middle East and North America, including new locations in Miami and Washington Dulles. India also offers tremendous potential, with significant investment in airport infrastructure. It’s a different category mix, with strong makeup and fragrance opportunities alongside more entry-level skincare.
When you combine the locations with the brands we haven’t yet fully deployed, it becomes a real multiplier for growth.
K-beauty and local challenger brands are attracting growing attention from international travelers. How is that changing the competitive landscape for Estée Lauder?
Korea is probably one of the most interesting beauty markets right now. You’ve got this whole phenomenon around K-beauty, K-pop, and K-drama. We’re seeing a huge influx of tourism from across Asia, as well as growing interest from Western travelers. And K-beauty brands bring a tremendous amount of innovation to the market, very rapidly. It’s actually good competition because it gets people excited about beauty. We have Dr.Jart+ in our portfolio, and The Ordinary is also doing well in Korea, alongside our luxury brands.
