L'Oreal Group, one of the world's largest cosmetics companies, has announced plans to enter China's mass shampoo market.
According to Paolo Gasparrini, president of L'Oreal China, this move will enhance the company's presence in the mass shampoo market. The company will distribute its L'Oreal brand shampoo products through various channels, including supermarkets and hypermarkets and expand into third and fourth-tier cities in China.
Gasparrini said, L'Oreal has learnt a lot from its acquisition of Mini Nurse in China, especially about the sales channels of the Chinese mass cosmetics market. Mini Nurse is L'Oreal's first brand to target the mass market in China.
Lan Zhenzhen, the vice president of L'Oreal China, revealed to local media that over half of L'Oreal's annual sales in China are contributed by mass cosmetics brands, including L'Oreal Paris, Maybelline, and Garnier; and the rest are from luxury brands such as Lancome. The situation is similar to that in the international market.
It is estimated that the Chinese shampoo market is worth CNY25 billion, with a gross profit rate of between 50% and 70%.
At present, Procter & Gamble occupies about 50% of the Chinese mass shampoo market with five brands while the rest of the market is shared by Unilever, C-Bons, Bawang, and Lafang.