L’Oréal posts double-digit growth in mainland market in 2017

L’Oréal Group, a France-based beauty group, said it achieved double-digit growth in the Chinese mainland in 2017, strengthening its leading position in the industry.

“The Chinese mainland is the No.2 market for L’Oréal Group in the world [after the US],” Stephane Rinderknech, CEO of L’Oréal China, said at a press conference in Shanghai on Wednesday.

“L’Oréal has gained the position of being the No.1 beauty group in China,” he said.

According to the company, it has served more than 100 million consumers and brought to them at least one new product every day in 2017 in China.

So far, the group has 23 brands in the mainland.

Rinderknech attributed the growth to China’s rising middle class and young consumers, who have been the driving force for the gains.

The Luxe division still leads the beauty market, such as products by YSL and Lancôme, and the consumer product division also achieved faster growth thanks to brands such as L’Oréal Paris, makeup brand Maybelline, and Magic, he noted.

The positions of new markets such as India, the Chinese mainland and Russia have strengthened, as sales of the new markets breached 10 billion euros ($12.2 billion) in 2017, an increase of 8.9 percent from the previous year, according to the company’s fiscal report for the year ended December 2017.

Tokyo-based Shiseido logged more than 1 trillion yen ($9.19 billion) in consolidated sales in the same year, hitting a target that had been set for 2020, according to Nikkei.

Cosmetics maker Estee Lauder Cos Inc said sales for the quarter ended in December rose 16.7 percent to $3.74 billion, beating analysts’ estimate of $3.68 billion, said Reuters.

As the structure of China’s consumer market is constantly upgrading and urbanization continues, consumers’ demand for beauty products and services is increasing.

Rinderknech said the input of online activity is higher than that of physical stores, and the company will expand its footprint on e-commerce by further collaborating with key market players, including Tmall, JD.com Inc and vip.com.

Cosmetics sales in China are expected to exceed $40 billion by 2021, surpassing the US, which has been the world’s biggest market for makeup and skin care for years, said Euromonitor International.

As to the Chinese market, it’s predicted to expand at an average rate of 9 percent per year until 2020, Euromonitor said.