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L'Oreal China sales rise 17.7% in 2009

By Zhou Yan (China Daily)
Updated: 2010-03-06 10:59

SHANGHAI - L'Oreal SA, the world's largest cosmetics maker, reported 17.7 percent growth in full-year sales to 8.18 billion yuan in China, a double-digit gain for the ninth consecutive year in the nation.

The strong figures driven by Chinese customers' growing appetite for cosmetics made China the fifth largest market for L'Oreal in 2009, up from seventh place in the previous year.

"We're very satisfied with our performance last year, which was quite difficult because of the financial crisis and we achieved the biggest gain in market share among the top 10 players in the country, mainly depending on successful innovations, intensive new product launches and the deepening of our sales distribution," said Paolo Gasparrini, president of L'Oreal China, at a press conference in Shanghai on Friday.

According to Gasparrini, the company accounted for 11.7 percent of China's cosmetics market share in terms of sales volume in 2009, up 0.7 percentage points from a year earlier. Overall market growth in the nation was around 10 percent on average.

Worldwide, sales of the Paris-based L'Oreal Group, at 17.47 billion euros, remained largely flat in 2009 from a year earlier, as customers in United States and Europe tightened their belts during the recession and shifted to cheaper brands.

However, bucking the global downtrend in its luxury products division which includes Lancome and Kiehl's, the world's largest beauty firm last year experienced double-digit growth in China, thanks to the country's strong purchasing power buoyed by the government's stimulus measures, said Gasparrini.

He added that L'Oreal expects its customer portfolio to increase by around 10 million in China in 2010, in line with the firm's worldwide strategy to add 1 billion consumers across the globe within five years.

According to figures from industry research firm China Investment Consulting, China's annual cosmetics sales will reach 80 billion in 2010 and 110 billion yuan in 2015.

"To us, 2010 is a year of both challenges and expectations. We have bigger ambitions and higher targets, though market uncertainties continue," said Gasparrini, adding that the company may consider further acquisitions, but failed to identify any potential targets.