|CEO||Stefan De Loecker|
|Revenues||7.03 billion euros|
|Profit||821 million euros|
|Competitors||Ponds, Clinique, Vaseline, Johnson and Johnson, Olay, Dove, Garnier|
Nivea was invented by the pharmacist and visionary entrepreneur Dr. Oscar Troplowitz in 1911 with the vision of high-quality yet affordable modern skincare to be enjoyed by millions of people with different types of skin. Through extensive research, Nivea created and innovated numerous skincare products over the years. Nivea is the first stable oil-and-water-based cream in the world. Its product portfolio includes deodorant, face creams, sun protection, and skincare for men. Nivea ranked 92nd in Forbes’ World’s Most Valuable Brands in 2019 (Forbes, 2019). Nivea is the largest brand under Beiersdorf. The other products under Beiersdorf are Eucerin, La Prairie, Labello, and Coppertone. Beiersdorf announced the decline in sales in FY 2020 due to the COVID-19 pandemic. The sales decline 8.2 percent at 9.03 billion euros revenue and 821 million euros global profit before tax. The company’s organic sales fell 3.4 percent, with Nivea down 5.4 percent. They are looking at recovery in 2021 and onwards (Miles, 2021).
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Table of Contents
Nivea Strengths 2021:
- Global presence.
Beiersdorf is a global company with 20,000 employees in over 160 affiliates worldwide. They have a large skin research center in Hamburg, Germany, and two other innovation centers in Shanghai and US. Nivea has a good household penetration in Europe, but they also gained transactions in Africa, the Middle East, Asia, and Latin America. The brand’s global overall growth increases 0.2% in 2019 and stood 24.5% household penetration in 2020. (Culliney, 2020).
- Strong brand equity.
According to Kantar Worldpanel’s 2020 Brand Footprint report, Nivea is the most chosen beauty and personal care brand in Europe. It was bought by more than 50% of households more than any other beauty and personal care brand. It is also one of the four fast-moving consumer goods (FMCG) brands worldwide (Culliney, 2020). In 2021, Nivea was valued at approximately $6.19 billion but was previously valued at approximately $7.4 billion in 2020 (Statista, 2021).
- Research and development.
The success of the Nivea as an effective product can be attributed to the extensive research of first, the founders and their research team. Beiersdorf’s Research and Development Department spent 246 million euros in 2020 (Statista, 2021). In 2020, Beiersdorf announced its investment of 60 million euros to complete its state-of-the-art technology center at its headquarters in Hamburg. It is scheduled to open in 2024 and will be the space of their researchers, packaging, and marketing team to collaborate and fast-track innovation (Hamburg News, 2020).
- Climate-neutralized products.
Beiersdorf consistently implements its Sustainability Agenda Care Beyond Skin action plans. In 2021, they announced that its first climate-neutralized product called the NIVEA Naturally Good face care will be marketed in over 30 countries. They are working towards greater sustainability and a reduced environmental footprint (Beiersdorf, 2021).
Nivea Weaknesses 2021:
- Pandemic impact.
Beiersdorf also experienced the impact of the global health crisis. In 2020, sales were down to 7.025 billion euros from 2019. Nivea was able to gain more than half of its operating countries, but still a decline from the previous year. The company is said to be anticipating a rebound growth in 2021 (Bargh, 2021).
- Limited brand portfolio.
Nivea products are face care, body shower and lotions, deodorants, sun protection, and products for men. Their most popular product is the Nivea cream. Nivea needs to create additional products that establish as a leading personal care brand, which will also lead them to expand in more countries.
- Strategic marketing.
Some consumers are familiar only with Nivea cream and Nivea lotion, which are promoted consistently by the company. Its other products need to be marketed as well to be profitable. Besides Nivea can create marketing strategies that will emphasize their brand as a complete personal care brand.
Nivea Opportunities 2021:
- Increase market share.
Given its long history and strong brand equity, Nivea has all the opportunities to dominate the market. When Nivea adapts to our current situation and recognizes the market trends, they can adjust their product planning and marketing strategies accordingly.
- Online market.
E-commerce will be the trend in the coming years, especially due to the new normal effect brought by the pandemic where online shopping is favored more than traditional shopping. According to studies, the e-commerce share of retail sales globally has been on the rise for the past five years and is expected to continue (Big Commerce, 2020). Nivea may not be able to expand its locations around the globe immediately, but it can partner with different e-commerce platforms or sellers.
- Target men’s segment.
Men’s grooming and wellness are expected to grow in the coming years as brands aim to change the way men are marketed. This segment is forecasted to reach $166 billion by 2022 (Chiquione, 2021). Nivea can use this opportunity to create more products for men and advertise them efficiently.
Nivea Threats 2021:
- Saturated market.
The personal care or skincare industry is an intensely competitive market. Although there is a big population of consumers actively participating in this industry, there are also numerous brands and products to choose from. A lot of big and small players target this industry as more people are concerned about proper self-care. Nivea should continue to innovate and expand their product portfolio and create strategic marketing to stay as one of the top brands in the market.
- Racism accusation.
In this day and age, brands work on advertising their products as racial and culturally sensitive, otherwise, they will receive backlash from the community. In 2017, Nivea received such treatment for their deodorant ad campaign, featuring the words “White is purity”. People were quick to condemn the ad. Nivea pulled the ad campaign and apologized for the racially insensitive advertisement (Adams, 2017). Nivea should be careful about how they project their brand.
Nivea SWOT Analysis Conclusion:
Nivea has a strong vision of what modern skin should be. Its long history and extensive research make them reputable as a leading brand in the industry. Even though they were impacted by the pandemic in 2020, they are slowly getting back and earning sales. Nivea should continue researching and experimenting until they polish their brand portfolio to contain products that are competitive in the market. With strategic marketing and creative advertising, they can lead the saturated market of personal care. Not many brands focus on men’s personal care; Nivea should grab that opportunity and expand its portfolio. They should also work on their online presence by establishing connections with e-commerce platforms.
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- Miles, L. (2021). BEIERSDORF FY20 SALES FALL; EXPECTS SALES RECOVERY IN 2021. [online]. Global Cosmetics News.
- Forbes, (2019). The World’s Most Valuable Brands. [online]. Forbes.
- Hamburg News, (2019). Beiersdorf to invest EUR 60 million in headquarters in Hamburg. [online]. Hamburg News.
- Culliney, K. (2020). Nivea no. 1 ‘most chosen’ beauty and personal care brand in Europe: Kantar. [online]. Cosmetics design-europe.com.
- Adams, C. (2020). Nivea pulls “white purity” ad after backlash and racism claims. [online]. CBS News.
- Beiersdorf. New milestone reached: Beiersdorf launches first climate-neutralized NIVEA products and strengthens climate engagement. [online]. Beiersdorf.
- Bargh, B. (2020). Beiersdorf reports full effects of ‘landmark’ year in 2020 review. [online]. Cosmetics business.
- Big Commerce, (2019). The Future of Ecommerce is Frictionless, Experiential, and Everywhere. [online]. Big Commerce.
- Chiquoine, J. (2021). Men’s ‘Beauty’ Market Presents Big Opportunities for Businesses. [online]. Cosmetics business.