According to the FT, “Estée Lauder has agreed to pay $1bn to take a majority stake in the owner (DECIEM) of the cult skincare brand.” A $2.2bn valuation then for The Ordinary’s does-exactly-what-it-says-on-the-tube brand strategy based on three key components:
Brand Transparency The Ordinary clearly labels key product ingredients like retinol and hyaluronic acid so its consumers understand exactly what they are paying for.
Consumer Chemistry With names like Niacinamide 10% + Zinc 1%, as retail blog Indigo 9Digital points out, they use product names that sound “Like something out of a chemistry book.” And their packaging follows suit.
Perfect Pricing Like beauty, value is often in the eye of the beholder but with D2C prices at less than £5 for a moisturiser The Ordinary’s pricing strategy is exceptionally competitive.
All are major factors in The Ordinary’s extraordinary valuation.
Extract from Human Capital – Drayton’s business magazine.