Is it just me, or does it seem like luxury skincare brands have multiplied like rabbits over the last few years? Augustinus Bader, Clé de Peau Beauté, The Ginza, MBR, La Mer, La Prairie, 111SKIN, Sisley Paris, and the list goes on. Walk into the skincare section of an upscale department store and you’re surrounded by them. Or just pass through the duty-free store at any international airport in the developed world.

I’m not talking about the merely expensive skincare products here; I’m talking about the hyper-expensive, where a single 50 ml (1.7 oz) bottle of a product can cost over 1 000 € ($1,157).

The question I have is this: What do you get for the prices the luxury skincare brands charge? What do they claim they do, what evidence do they provide for their claims, and how do they justify what they charge? This is fascinating on multiple levels: not just the obvious question, “what if luxury skincare products are meaningfully better than cheaper alternatives and so better skin is just a purchase away?” but also, “is the luxury skincare market a nearly pure example of Veblen goods¹ in action?”

Let’s start with pricing, because honestly, it may shock you. It did me.

Start with a well-regarded mass-market skin cream: say, CeraVe Moisturizing Cream. At $17.99 for 16 fl oz, that’s $1.12 per fl oz or 0,033 € per ml. Now let’s take a well-known luxury skin cream: say, La Prairie Skin Caviar Luxe Cream Sheer. It’s $610 for 1.7 fl oz, or 10,68 € per ml. That’s a price ratio of 321:1. By volume, you’re paying 321 times as much for La Prairie as you are for CeraVe.

But wait—we’re not done yet.

Let’s start with a cheaper but still well-regarded mass market skin cream, in this case, Cetaphil Moisturizing Body Cream. It sells for $13.49 for 16 fl oz, which is $0.84 per fl oz or 0,025 € per ml. Now let’s take an extremely high-end luxury skin cream, 111SKIN Black Diamond Cream, which sells for $995 for 1.7 fl oz, or 17,42 € per ml. That’s a price ratio of 686:1.

In other words, 111SKIN is charging not one order of magnitude (10x), not two orders of magnitude (100x), but nearly three orders of magnitude (1,000x) as much as a mass-market skincare product.²

How do La Prairie and 111SKIN justify their pricing?