Sephora turns to Nike exec to overhaul China business

Sephora tapped Nike Inc’s Asia e-commerce chief to lead its China operations, as the cosmetics retailer faces the challenge of turning around its ailing mainland business.

Ding Xia, who spent the past five years as Nike’s vice president and general manager of e-commerce for Asia Pacific and Latin America, will take Sephora “into its next phase of growth” as managing director for Greater China, Asia President Alia Gogi said in a statement yesterday.

LVMH’s second-largest brand by sales after Louis Vuitton, Sephora has struggled to replicate its US and European business success in China, amid intense competition in the country’s cosmetics sector and the dominance of major e-commerce platforms including Alibaba Group Holding Ltd’s Tmall. The brand faces a unique challenge in the mainland, where consumers’ desire to shop for everything online — from daily groceries to luxury items — means Sephora’s focus on expanding and improving its networks of physical stores may not work as well as it does elsewhere.

Investors have raised concerns about Sephora’s performance in the mainland, heightened by last month’s announcement it would withdraw from neighbouring South Korea — where it failed to take market share from local retail giants.

Sephora has expanded to some 300 stores since entering China in 2005. The market is seen as key to hitting a target of €20 billion ($21.3 billion) in about five years, Bloomberg has reported. However, it’s incurred losses since 2022, following strict Covid lockdowns that left people largely unable to shop in person and an ensuing economic slowdown, according to annual reports from skincare manufacturer Shanghai Jahwa United Co Ltd, which holds 19% of Sephora’s mainland business.

Ding — who previously headed Hanes-Brands Inc’s China expansion and is a former president of local e-commerce giant JD.com Inc’s fashion arm — will need to coax increasingly cautious shoppers into splashing out on face masks and cream blushes that can be found elsewhere, for less.

Sephora’s relatively expensive product line may put it at a disadvantage among the mainland’s increasingly price-conscious middle class. Also, a price war has broken out among beauty brands.

Bloomberg first reported in July that Sephora was looking for a new China head.