L’Oreal eyes huge China po­ten­tial

China Daily (USA) - - BUSINESS - ByWANG YING in Hangzhou wang_y­ing@ chi­nadaily.com.cn

Global cos­metic gi­ant L’Oreal is set­ting its sights on cash­ing in on China’s ex­pand­ing con­sumer mar­ket, cur­rently the world’s sec­ond-largest with a to­tal vol­ume of 30 tril­lion yuan ($4.49 bil­lion), to de­velop the na­tion into the group’s big­gest source of busi­ness, ac­cord­ing to a se­nior ex­ec­u­tive.

As the sec­ond-largest mar­ket af­ter the US for the French com­pany, L’Oreal China gen­er­ated about 15 bil­lion yuan in rev­enue in 2015, and is ex­pected to keep the mo­men­tum in the com­ing years as younger gen­er­a­tions spend more than their par­ents on beauty prod­ucts.

“This is nor­mal con­cern­ing the huge China mar­ket……the po­ten­tial is un­lim­ited,” said Loic Ar­mand, pres­i­dent of L’Oreal France, the French sub­sidiary of L’Oreal Group as well the group se­nior vice-pres­i­dent for in­sti­tu­tional af­fairs.

L’Oreal sells sev­eral bil­lion prod­ucts a year to 1 bil­lion con­sumers, and the group ex­pects to sell to 2 bil­lion con­sumers in 15 years, with the ex­tra 1 bil­lion mainly mid­dle­class cus­tomers from emerg­ing coun­tries in­clud­ing China.

China is the world’s sec­ond-largest con­sumer prod­ucts mar­ket, with a mar­ket size of 30 tril­lion yuan in 2015, ac­cord­ing to a Se­cu­ri­ties Times re­port. Con­sumer prod­uct de­mand has seen an an­nual growth rate of 12 per­cent be­tween 2013 and 2015.

“Cos­met­ics are no longer the ex­clu­sive prod­ucts of young women, and a broader pop­u­la­tion in­clud­ing male and se­nior peo­ple as well as ba­bies and kids re­quire skin­care prod­ucts,” said Qi Xiaozhai, di­rec­tor of the Shang­hai Com­mer­cial Eco­nomic Re­search Cen­ter.

Ac­cord­ing to him, China’s on­go­ing ur­ban­iza­tion has cre­ated a huge mar­ket for con­sumer prod­ucts across the na­tion.

China is the sec­ond-largest sales con­trib­u­tor for L’Oreal Group af­ter theUS, fol­lowed by France and Ger­many. About 7,000 peo­ple work di­rectly for the group in China.

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