Retailing, Franchising, and Consumerism Business Intelligence in China

L'Oreal's Sales In China Over CNY12 Billion In 2012

L'Oreal published its financial report for 2012 in Shanghai, stating that its sales in China reached CNY12.05 billion in 2012, a year-on-year increase of 12.4%.

Alexis Perakis-Valat, chief executive officer for L'Oreal China, said that for L'Oreal China, market share is currently the most important part of its development. Meanwhile, development opportunities in the second- and third-tier Chinese cities and the acceleration of digital sales are the strategic focuses for 2013.

At present, L'Oreal operates 20 brands in China, including Lancome, Kiehl's, Yue Sai, L'Oreal Paris, Maybelline, Garnier, Vichy, La Roche-Posay, and Kerastase. In 2012, the company's sales in China achieved double-digit growth for 12 years in a row; however, the growth slowed compared with the 18% growth rate in 2011. Commenting on this, Perakis-Valat said on one hand, the global economic situation was not so optimistic in 2012; on the other hand, the number of their sales was large and it is not that easy to achieve a large growth rate.

Paolo Gasparrini, president for L'Oreal China, also said that they were concerned about growth rate and sales. After achieving the market share of 14%, the most important goal is how to gain more share.

In regards to attention to acquire new brands, Perakis-Valat said L'Oreal's current brand portfolio scale is very good. Though diversified brands are needed, the brand portfolio cannot be too big or too decentralized. If there are new demands in the market which cannot be satisfied by their current brands, they will consider introducing new brands.

Prior to this, L'Oreal announced its global financial statistics, which showed that its total sales were EUR22.46 billion, representing a year-on-year increase of 5.5%. Meanwhile, its operating profit increased by 12.5%. By region, emerging markets saw the fastest growth, accounting for 39.4% of total sales; the Western European market accounted for 35.6%. As one of the largest emerging markets, China contributed 6.56% of the total sales of L'Oreal in 2012.

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