Focus on China

China, L’Oréal’s number two country

In 2015, China became the group’s No. 2 market in sales terms, behind the United States and before France. In a country undergoing far-reaching and rapid change, L’Oréal is adapting and taking full advantage of the market’s transformations. A prime example of the Universalisation strategy.
L’Oréal China is reinventing and adapting itself to the great shifts of the beauty market in China
Alexis Perakis-Valat
Executive Vice-President Asia, Pacific Zone,
Managing Director L’Oréal China
+3.2% like-for-like sales growth of L’Oréalin China in 2015

Meeting new generations’ expectations

The Chinese cosmetics market is changing quickly and the choices of young Chinese women are quite different from those of the previous generation. They wear make-up and eagerly track the latest trends, like those from South Korea. These Internet-savvy connected consumers do many things online, including their cosmetics purchases. And since they are always on the lookout for new brands, constantly attracting and holding their attention is essential.
  • Young woman with make-up crossing a street in a big Chinese metropolis.
  • Advertising campaign for Pop Water by Yves Saint Laurent with Cara Delevingne.
  • Miracle Cushion by Lancôme.
  • The younger generation follows the latest make-up trends.
  • The lipstick category has the wind in its sails.
  • A Korean-inspired innovation.
Thanks to its close relationship with consumers, L’Oréal China is taking full advantage of the boom in the make-up market, particularly in the lipstick category with the success of Rouge Pur Couture by YVES SAINT LAURENT. In foundations, L’Oréal China is surfing on the cushion trend, an all-in-one liquid foundation delivered through a cushion applicator, a Korean technology. In this hot new segment, the group is innovating with products like Gwang Cushion by L’ORÉAL PARIS and Miracle Cushion by LANCÔME.

E-commerce and social commerce

Screenshot of L’Oréal Paris store on the Chinese TMall e-commerce site.
China is one of the giants of global e-commerce, with highly influential social networks, such as WeChat, and very powerful online sales websites. The L’Oréal brands have moved quickly to take up positions on the platforms that really count. L’ORÉAL PARIS was the first great international beauty brand to open a store on Tmall in 2010. In 2015, L’ORÉAL PARIS was the first e-commerce beauty brand(1), while MAYBELLINE NEW YORK was No. 1 in mass-market make-up(2), MAGIC was No. 1 in skincare masks(3) and Men’s Expert was No.1 in men cosmetics(4). For the L’Oréal Luxe brands, the challenge is recreating an exclusive consumer experience online, with initiatives such as My Beauty Box.
More than 20% of the Consumer Products Division salesvia e-commerce in China(5)

Adapting to the rise of local brands

Chinese advertising campaign for Hydrafresh Water by L’Oréal Paris.
The growth of Chinese brands is having a huge impact on the market. L’Oréal took this development on board by acquiring in 2014, MAGIC, a Chinese brand known for its expertise in skincare masks, which are a very popular beauty ritual in China. But L’Oréal also innovates locally, by investing in its Research et Innovation hub in Shanghai. One significant example is Hydrafresh Genius Water by L’ORÉAL PARIS, which appeals to young consumers by precisely targeting their needs.

To be a committed player in society

Group photo at the Chinese Yichang plant, which has reached carbon neutrality at the end of 2015.
The L’Oréal group’s Social and Environmental Responsibility commitments – now grouped together in the “Sharing Beauty With All” programme – are an integral part of L’Oréal China’s road map, and the Yichang factory has been innovating for several years to reduce its energy footprint. In 2015, it became L’Oréal’s first carbon-neutral plant in the Asia, Pacific Zone, thanks to the use of hydraulic power.
For more than ten years now, L’Oréal China has partnered with the China Youth Development Foundation to develop a programme to help disadvantaged students. Ten of the top Chinese universities sell cosmetics products on their campuses to finance scholarships. Students are adding to the buzz about the programme by sharing information on social networks.
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(1) Source: Smart Path, China, market share value 2015.
(2) Source: Color segment, Euromonitor, China, market share value 2015.
(3) Source: Facial skincare mask segment, Euromonitor, China, market share value 2015.
(4) Source: Mass-market men’s skincare, Smart Path, China, market share value 2015.
(5) Including distributor feedback and L’Oréal estimates.