On the upside for its Chinese business, L’Oreal China highlights “joint creation” in future plans
L’Oreal China said it will focus on joint efforts with partners for brand and product development, beauty technology and green protection as it celebrates its 25th anniversary in the country by unveiling a range of strategies for the coming years. .
The action plan, emphasizing the importance of joint creation with the local ecosystem, was released on the basis that China has become the beauty giant’s second largest market as it has experienced an average growth of 20% on annual basis for the past two years despite the shock of the COVID-19 pandemic.
“The Chinese economy has as always demonstrated strong resilience and potential, injecting momentum and vitality into the development of foreign companies in China and into the global economic recovery,” said Fabrice Megarbane, president of L’Oreal North Asia and CEO of L ‘ Oreal China in a celebratory event last Friday in Shanghai.
“L’Oreal’s success in China has always assisted, benefited and contributed to the Chinese strategy of a strong expansion of domestic demand and the decision to open”.
L’Oreal has unveiled a five-pronged strategy, calling it “co-create, co-empower, co-develop, co-protect and co-invent”.
Highlights include encouraging more inclusive, agile and creative beauty technology, inspiring product and brand innovation with partners and employees, and contributing to a green system with the efforts of all parties.
In the quarter ending December, L’Oreal China achieved year-over-year growth of more than 50% compared to 2019 in the pre-COVID days, its latest earnings report says.
L’Oreal’s North Asia zone, which is headquartered in Shanghai and also includes markets such as Japan and South Korea, experienced a 17.6% year-over-year increase in 2021, which slightly outpaced the increase in 16.1% registered by the entire group.
Although growth in the second half of 2021 declined in China, it still represented significant growth in absolute terms given the already sizable Chinese market, Megarbane told China Daily in an online interview.
“We still believe the market fundamentals are there and the beauty market is very resilient,” she said. “If you take it in the medium to long term, we still see a market that is expected to continue growing at a high single digit, which for the size of the Chinese market is still very good growth for the future.”
The company spared no effort to advance China as one of its key growth engines. Having recognized Shanghai in May as a North Asian headquarters, it also aims to form a unique beauty triangle with skincare highlights in China, Japan and South Korea, leveraging the beauty trends and synergies of those markets.
The company has a long track record of infusing technology into skin care products and solutions, hosting a number of local campaigns to attract scientific talent and promote joint innovation, such as the creation of the L’Oreal Academician Working Station in Shanghai.
By reducing its carbon footprint, the company has promised to manage the carbon emissions of supply chains to fight climate change, disseminate the environmental and social impact of L’Oreal products to help consumers make sustainable choices and participate. at the China Carbon Neutrality Expo 2022.
The COVID pandemic is likely to bring radical changes in the cosmetics industry, from selective choice of tinted cosmetics to increased body cleansing care, a study by Kantar Worldpanel said.
People’s awareness and passion for green products are clearly on the rise, said Jason Yu, general manager of Kantar Worldpanel China.
“This, coupled with ongoing media and brand education on sustainability, means products with environmentally friendly elements will gain greater consumer preference, which is likely to inspire the beauty industry to integrate sustainability into the strategy. of the brand and will focus more on products with ‘nature’ and ‘healthy’ concepts, “he said.