BEIJING: L'Oréal, the beauty group, is taking an increasingly targeted approach to serving Chinese consumers, reflecting the fact that a "one size fits all" model is now largely outdated.
"Beauty is less and less one size fits all," Alexis Perakis-Valat, L'Oréal's chief executive in China, told BloombergBusinessWeek. "You have to have an answer for very different needs."
To achieve this aim, the French organisation is pursuing tactics such as targeting male shoppers - where total category sales have been registering double-digit growth - and rolling out lines based on Chinese herbal remedies.
It also acquired local operator Yue-Sai Cosmetics in 2004, and saw sales in this area of its business climb by over 20% in 2012, buoyed by popular products like the Youth Preserving Moisturiser including ganoderma fungi.
To build on this trend, many Yue-Sai products are also being made available online via platforms including Tmall, Alibaba's market-leading ecommerce site. Innovation and in-store service are further priorities for the brand.
Paul French, China market strategist at Mintel, the research company, added that L'Oréal's decision to launch Kiehl's in China in 2009 helped it tap the burgeoning number of customers looking for mid-priced products.
"In China, for a long time you just had your high and low end," he said. "Kiehl's, along with Korea's Face Shop group and L'Occitane, really opened up the mid-market range."
L'Oréal predicts its sales in China will increase by more than 10% in 2013, based on the revenues of RMB12.1bn ($1.9bn) it generated locally in 2012.
Euromonitor International, the insights provider, believes sales of beauty and personal care products across China as a whole should hit $34bn in 2013, indicating the size of the opportunity presented by the country.
The company also stated that Procter & Gamble, the US conglomerate, held 15.8% of the market in 2011, which are the most recent figures available. It added that P&G's share had fallen by 1.6 percentage points from 2008.
L'Oréal, by contrast, posted a gain of two percentage points in this period, taking 11% of industry sales overall. It also now leads the skincare segment with a 15% share, beating the 11% logged by Procter & Gamble.
"Not just has L'Oréal approached China from various angles, including pricing and retail coverage, it also strived to make the brands more customized and effective," said Oru Mohiuddin, a senior analyst at Euromonitor.
"Beauty is less and less one size fits all," Alexis Perakis-Valat, L'Oréal's chief executive in China, told BloombergBusinessWeek. "You have to have an answer for very different needs."
To achieve this aim, the French organisation is pursuing tactics such as targeting male shoppers - where total category sales have been registering double-digit growth - and rolling out lines based on Chinese herbal remedies.
It also acquired local operator Yue-Sai Cosmetics in 2004, and saw sales in this area of its business climb by over 20% in 2012, buoyed by popular products like the Youth Preserving Moisturiser including ganoderma fungi.
To build on this trend, many Yue-Sai products are also being made available online via platforms including Tmall, Alibaba's market-leading ecommerce site. Innovation and in-store service are further priorities for the brand.
Paul French, China market strategist at Mintel, the research company, added that L'Oréal's decision to launch Kiehl's in China in 2009 helped it tap the burgeoning number of customers looking for mid-priced products.
"In China, for a long time you just had your high and low end," he said. "Kiehl's, along with Korea's Face Shop group and L'Occitane, really opened up the mid-market range."
L'Oréal predicts its sales in China will increase by more than 10% in 2013, based on the revenues of RMB12.1bn ($1.9bn) it generated locally in 2012.
Euromonitor International, the insights provider, believes sales of beauty and personal care products across China as a whole should hit $34bn in 2013, indicating the size of the opportunity presented by the country.
The company also stated that Procter & Gamble, the US conglomerate, held 15.8% of the market in 2011, which are the most recent figures available. It added that P&G's share had fallen by 1.6 percentage points from 2008.
L'Oréal, by contrast, posted a gain of two percentage points in this period, taking 11% of industry sales overall. It also now leads the skincare segment with a 15% share, beating the 11% logged by Procter & Gamble.
"Not just has L'Oréal approached China from various angles, including pricing and retail coverage, it also strived to make the brands more customized and effective," said Oru Mohiuddin, a senior analyst at Euromonitor.
Data sourced from BloombergBusinessWeek; additional content by Warc staff
