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Beauty of a business

By Jiang Jingjing (China Daily)
Updated: 2008-05-19 09:25

No big parties, no shining stars.

With a low-profiled marketing approach, cosmetic giant Estee Lauder Companies chose to recently hold a tasteful, glitz-free appreciation dinner for local partners to mark its sixth anniversary in China.

The US firm's eight brands have become a force in China within those six years, with the market share standing between 25 to 30 percent in the high end cosmetic sector. That's compared to a market share between 18 to 40 percent in other Asian markets and Fabrice Weber, president of Estee Lauder Companies Asia Pacific, expresses his satisfaction and hopes for the future. "The market here is contributing to the Asian average, but it is still far from the biggest share," says Weber.

Weber says that Estee Lauder is growing 20 to 30 percent faster than the overall market, which stands at 28 to 35 percent annually. "In three years' time the sales in the mainland market will overtake South Korea, and in five years' time it will surpass Japan, becoming the largest single market in the region for us."

In the prestige beauty world, Estee Lauder is the largest by far in North America, with its 27 brands. China, the third largest luxury market, has given the firm confidence to maintain its leadership.

To achieve the target, in 18 months, Estee Lauder will launch two to three new skincare brands in China, Weber says while declining to name them.

According to the company's figures, skincare products take the biggest market share in the local top end cosmetics market. It is usual for treatment products to lead the market in emerging markets, since people normally first go for performance, quality and assurance, Weber says.

Its core brands Estee Lauder and Clinique have performed successfully with its skincare products, and top-end brand La Mer, which was launched in the market four years ago, also has increased its market share.

For makeup, consumers usually start with mass-market products, to play with, or for many color choices. But with experience, customers seek additional service, expertise and quality. Weber cites its brands Bobbi Brown and M.A.C as examples.

"Makeup is an object that women take out of their handbag on frequent basis every day. There is social element showing that 'I use an international makeup brand instead of a regional or domestic brand'. That's when makeup catches up quickly," Weber explains.

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