L’Oreal Stays Fiercely Competitive in China

on April 4 2013 | in Beauty Digital | by | with No Comments


Cosmetics and beauty company L’Oreal announced its 12th consecutive year of double-digit growth in China. The company’s revenue grew by 12.4 percent in 2012 to reach 12.05 billion RMB (US$1.91 billion), as reported by China Daily. “We are very happy to close 2012 with a year of solid and healthy growth,” said Alexis Perakis-Valat, CEO of L’Oreal China. “And we are very confident and ambitious of continuing to grow faster than the market.”

Such growth is impressive considering the Chinese government is introducing policies to support and protect local cosmetic and beauty product makers from foreign competition. According to statistics from market research firm Nielsen, the market share of international cosmetics and beauty companies in China dropped from 60 percent in 2009 to less than 45 percent in 2012. L’Oreal currently holds 14 percent of the market share in China.

Although competition is fierce, China remains a favorable environment for expansion for beauty and cosmetic companies.  A global beauty survey by Elle magazine published in January found that Asian women, especially those between ages of 25 – 34, spend the most on cosmetics. For example, 46 percent of Chinese mainland women user moisture masks several times a week, more than any of their counterparts in the rest of the world.

Many brands are finding ways to cater to these zealous customers. Procter & Gamble has launched four new brands in China recently. Estee Lauder has developed the Osiao brand for China, made exclusively for Asian skins.

“L’Oreal was able to grow faster than the market and to gain market share again,” said Perakis-Valat. L’Oreal’s main growth strategy involves focus on lower-tier cities, men’s skin care, and e-commerce. The company, which already operates a portfolio of 20 brands in China, including LancomeKiehl’s and Yue-Sai, is also looking to introduce more brands to the Chinese market.

According to Morning Whistle, online sales were 3 to 4 percent of L’Oreal China’s total sales currently. The company plans to double e-commerce sales in 2013.


photo credit: l’oreal

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