Looking to capture a larger share of the world’s third-largest cosmetics market, New York-based beauty giant, Estee Lauder Companies plans to add more Chinese cities and e-commerce channels.
Estee Lauder owns brands such as Clinique, Origins, Bobbi Brown, La Mer and Sean John in China in 38 cities. The company plans to add five more cities and introduce more luxury brands through department stores, free-standing stores and cosmetics chain, Sephora, over the next three years. Plans are also under way to launch new e-commerce channels for Origins and Bobbi Brown in China.
Lauder has delivered impressive sales growth this year, up 13% to US$8.81 billion, largely on its China success.
The company entered China in 1993 and has been crafting selected products for local needs. Reinforcing its strong commitment to local consumers, Estee Lauder set up its Asia Innovation Center in Shanghai this past June to research and develop products tailored to the specific needs of Chinese and Asian skin.
“Skin care represents two-thirds of prestige beauty in China. To have a facility right in the heart of this very important region – a region particularly focused on high-performance products and safety – will drive our creativity on all levels,” said Carol Shen. “We are committed to our efforts in China and believe the region will continue to be a major growth opportunity for the Company as well as providing world-class products to Chinese consumers.”
The company estimated that Chinese women around the world account for about US$1 billion of its sales this past year.
In the past, wealthy Chinese traveled overseas to buy cosmetics, now they have ample choices in country as leading international cosmetic companies have set up shop throughout China.
China is the second largest market for Procter & Gamble and L’Oreal has seen a strong 25 percent sales increases for the past two years.
Meanwhile, for Estee Lauder, its goal is to reach Chinese “wherever they live and travel.”
photo credit: estee lauder