L'Oreal aims for major expansion in China
L'Oreal says it aims to expand its product range and geographic cover across the country to reach as many as 500 million domestic consumers, compared with its current 100 million customer base, to strengthen its foothold in the evolving and challenging beauty market.
Fabrice Megarbane, L'Oreal China's new chief executive officer, says that understanding the personalized preferences and demands of different types of local consumers would be a huge challenge in the future.
China is already the French cosmetics and personal care company's second-largest market and one of its future focuses in China will be investment in new technology and beauty tech offerings for a better consumer experience.
Megarbane, who will officially take office on July 1, says he believes it's important to drive the integration of both online and offline channels in order to stay closer to consumers and to make decisions based on their preferences and needs.
Last year, China sales surged 33 percent, the highest annual increase for the past 14 years. E-commerce accounted for more than 35 percent of its total sales in China, rising from about 10 percent in 2014 — of the 23 brands L'Oreal now sells in China, 22 have an online presence.
Local players are catching up fast and are among the fastest growing companies in the skincare and makeup sector in terms of consumer penetration and purchasing frequency, the latest study by Kantar Worldpanel shows.
Last year spending on skincare products and cosmetics in China rose 13 percent and 17 percent, down from 17 percent and 29 percent in 2017.
L'Oreal China Vice President of Research & Innovation Maxime De Boni added that the Shanghai facility, which is the third-biggest of the six research hubs around the globe, could lead in areas such as anti-aging research and hair and scalp and skin tone management.
One of the group's latest offerings would be Lancome's flagship serum which uses the latest research on skin microbiome to better target different skin issues and rebalance skin condition.
It is expected to be available in China later this year.