Nation attractive market for L'Oreal
L'Oreal, the world's largest beauty company by revenue, said it remains deeply committed to the Chinese market, one of its most strategic growth drivers, fueled by the country's dynamic consumer landscape, rapid technological advancements and growing middle-income consumers.
The French company, which has been operating in China for 28 years, said it has seen a huge increase in demand for beauty products and a wider opening of the business environment over the period. By 2030, about 150 million new beauty consumers are expected to emerge in the middle-income consumer group in China, it projects.
"Chinese consumers are well informed and discerning, embracing a more refined and diverse approach to beauty. We remain confident in the long-term potential of the Chinese market and its beauty ecosystem. L'Oreal will continue to invest in China, as investing in China is investing in the future," said Nicolas Hieronimus, CEO of L'Oreal Group.
"As we look to the future, we see three potential areas for growth, which are increasing our presence in lower-tier cities; winning with new consumer clusters such as Gen Z consumers (those born in the late 1990s to early this century) alongside men and boomers; and leveraging our innovation power," Hieronimus said.
LeadLeo Research Institute, a market research provider based in Shanghai, said China's consumer groups for beauty products tend to be younger, with a predominance of females though with an increasing proportion of males.
"It is noteworthy that the men's cosmetics market is steadily expanding, as Chinese male consumers are paying more attention to personal care and appearance, and their demand for beauty products is growing," said Dong Siyu, an analyst at LeadLeo.
By 2030, more than two-thirds of the global middle-income group will be concentrated in the Asia-Pacific region, and China will become the core driving force of this trend, said a report by accounting firm Ernst & Young.
L'Oreal said it has seen remarkable resilience from second-tier, third-tier and even smaller cities. Second- and third-tier cities, as well as tourist destinations, have indicated robust growth trends of beauty products, according to the National Bureau of Statistics in July last year.
"Smaller cities in China represent the greatest growth potential. This is fueling a demand for higher-quality goods and services, including global brands, and new shopping experiences," Hieronimus said.
Eyeing growing demand from China, its second-largest market, L'Oreal plans to launch a Beauty Stimulus Plan in China this year — a portfolio of investments to lay the foundations for the future of beauty. For instance, the group plans to introduce more aspirational brands including Miu Miu Beauty and Dr G, and put more effort into integrating online and offline experiences.
Meanwhile, L'Oreal has been focusing on local research and development.
"We are committed to accelerating innovation, and leveraging global expertise and local insights to co-create tailored beauty solutions for the Chinese market. We will also accelerate partnerships in sustainability," Hieronimus said.
zhuwenqian@chinadaily.com.cn
