L'Oreal China to focus more on e-commerce

Fully embracing the increasingly digitalized Chinese consumer market will be the focus for the world's largest cosmetics group L'Oreal in China in 2018.

With an extensive portfolio of brands, L'Oreal China will reach into more e-commerce platforms in China this year. Its luxury beauty brand Helena Rubinstein and skincare brand Biotherm will launch their official stores on JD next month. During the same month, high-end cosmetics brand Yves Saint Laurent will also launch its flagship store on Alibaba's Tmall. All these efforts are happening shortly after the group launched a store for the luxury beauty brand Armani on Jan 16.

According to Stephane Rinderknech, CEO of L'Oreal China, the company has already taken the lion's share of China's online cosmetics sales. They have already spent more on online channels for distribution and marketing over the past few years. The target is to make all its digital campaigns more precise in the future.

"We do not do digital for the sake of digital, but rather to stay in line with consumers' demand," he said.

L'Oreal group registered a turnover of about 26 billion euros ($32 billion) globally for the fiscal year 2017, up 4.8 percent year-on-year. Propelled by robust growth in the Asia-Pacific market, sales revenue in emerging markets exceeded 10 billion euros for the first time in 2017.

While the exact number for China has not been disclosed, Rinderknech said that they managed to attain double-digit growth in the country last year. Meanwhile, China remained the second largest market for L'Oreal group, just below the United States.

With a research and development center established in Shanghai 13 years ago, the largest of its kind in Asia-Pacific, L'Oreal China has sped up to meet the demands of local consumers, introducing at least one new product to the domestic market per day last year.

The momentum is expected to carry on this year. L'Oreal China will introduce to the market a new facial mask product under its acquired local brand MG this year by combining the latest advances in technology. At the same time, it will repackage and upgrade the retail image of the domestic high-end beauty brand Yue Sai this year to make it the "No 1 Chinese luxury beauty brand".

According to Rinderknech, it is the "new golden era" for the beauty industry in China given the consumption upgrade, ongoing urbanization and the rise of the middle class.

While cosmetics brands from Japan and South Korea are booming in China, Rinderknech said that L'Oreal is not intimidated by the possible competition. On the contrary, he showed a welcoming attitude by saying that it will give more choices to consumers. The plethora of choices in the market is also in line with the improvements in consumption.

"I am excited about China's growth potential. The market here is not saturated but rather at its very beginning days," he said.